Creditor Claims

[vleisme]

I have a question. I am unclear about the claims by creditors in a ch. 13. When we file they are notified then it is their option to file a claim against us or not? I have about 20 unsecured accts. how will it be determined what they will receive if anything in the 4% payback my attorney is submitting in the plan? Wouldn't all creditors file a claim or do some of them not for some reason?

(Vleisme, I moved your question from the old thread you posted to first into its own thread. It's against our forum rules to post to an old inactive thread because the information in it could be outdated. Thanks! lrprn)

[$$only4ever]

I have a question. I am unclear about the claims by creditors in a ch. 13. When we file they are notified then it is their option to file a claim against us or not? I have about 20 unsecured accts. how will it be determined what they will receive if anything in the 4% payback my attorney is submitting in the plan? Wouldn't all creditors file a claim or do some of them not for some reason?

There is no rhyme or reason as to why some creditors file a claim and others do not. I had 17 creditors; only 7 filed. I owed Citi over 20k and they did not file a claim. I had a department store credit card file a claim and the total balance that I owed was $147. Once the deadline has passed, then the trustee determines how much each will get based on the number of claims and your percentage amount. Obiviously, less creditors that file, more $$ for the ones that did. Many creditors opt not to file a claim and take the write-off. I was just glad that 10 decided to write off the debt. It made my payment so much lower.

[truckerswife]

So, when the creditors are notified of the filing of bankruptcy are they told the % of payback? I am just curious if I am at 100% payback in 40 months, will more creditors file than if i was at 4% in 60 months? Also, one loan was paid directly by the co-signer. (Trustee said it was alright since the money was never in our possession) It was $2500 and that knocks us down to 36 months payback. Well if every creditor does not file will that lower the payments since chapter 13's are 36-60 months?

[HHM]

The notice that creditors receive does not tell them the percent payback. The notice simply tells them you filed BK, which chapter you file, the dates of the 341 meeting and confirmation hearing, and certain deadlines.

However, any creditor, if they wanted to, could look-up the information.

Whether creditors file claims or not is something you should not be worrying about because there is nothing you can do about it. Your chapter 13 plan "assumes" all creditors file claims. If some don't, that is a gift to you. What that will ultimately mean is you will get a refund at the end of the plan or the length of the plan will shorten.

The fact that a creditor does not file a claim DOES NOT lower your payment amount. All it means is that your plan may end sooner. Keep in mind, under chapter 13, you are required to submit ALL your disposable income, thus, the only variable that changes if the total amount owed is less than expected is the amount of time you are in the plan. (when you are in a 100% payoff plan in the first place).

[busbis]

I hear the plan takes normally 36-60 months, but what if you are at a 100% payout and you only owe around 25K to payback (thats if all creditors submit a claim). My disposable income is around $3500 per month. Does the trustee shorten the term or do they allow for any wiggle room and a longer payout over the 36 month period.

[HHM]

A side note, if you are $3500 disposable income and only $25K unsecured, why are you filing chapter 13?

If you can payback all your claims in less than 36 months, you can do a plan that does that. (but that begs the question of why you need to file?)

The payment amount has nothing to do with the claims. Payment amount is only determined by your income/expenses differential.

[krielly]

The way I understand it though....if you are in anything less than a 100% payback, and some creditors fail to file proof of claim, you won't necessarily get a refund, it would just up the percentage that unsecureds get, right????????

[minime]

So, when the creditors are notified of the filing of bankruptcy are they told the % of payback? I am just curious if I am at 100% payback in 40 months, will more creditors file than if i was at 4% in 60 months? Also, one loan was paid directly by the co-signer. (Trustee said it was alright since the money was never in our possession) It was $2500 and that knocks us down to 36 months payback. Well if every creditor does not file will that lower the payments since chapter 13's are 36-60 months?

I was 100% payback several creditors did not file, but that didn't change my monthly payment just the scheduled amount to be paid was different. Finished paying into plan 8 months early because of that. Be careful with citibank, although they don't file a claim when you are done they leave it on your credit report as open revolving acct past due. You have to call and make sure they correct that.

[HHM]

The way I understand it though....if you are in anything less than a 100% payback, and some creditors fail to file proof of claim, you won't necessarily get a refund, it would just up the percentage that unsecured get, right????????

Correct, if you are NOT in a 100% plan to begin with, and some creditors fail to file a claim, the percent payback will be increased to those unsecured creditors that actually file claims.

This is one reason you, as the debtor, should scrutinize the claims that do get filed. You can object to the claim if you think it is inaccurate. Also, you want to be leery of creditors filing duplicate claims. Sometimes the trustee will catch this and object, and sometimes not...so you should always object if you see duplicate claims.

[busbis]

[QUOTE=HHM;119165]A side note, if you are $3500 disposable income and only $25K unsecured, why are you filing chapter 13?




Because I am surrending 2 condos that I can no longer afford with monthly interest arm payments, assocation dues and assessments. These debts alone come to over $4500 per month so by me releasing them will give me more disposible income.

[HHM]

Maybe you have discussed this in another thread (and I don't really want to hijack this thread), but why file chapter 13, if the 2 condo's are rentals (presumably), or even if only 1 condo is a rental, then wouldn't the "majority" of your debt be "non-consumer", if so, you can file a chapter 7 and side step the means test.

It is usually NOT a wise move to file a chapter 13 to get out from under secured debt. But there are exceptions.