Trustee Requests

[thomasj]

Well I finally met with my atty and she said the trustee is asking for a letter from my employer saying that we will not be having any over time going forward and another letter with the information why my Shift Differential was taking away?
Has anyone had a request of this nature...

What should or could i do...I read different posts in the site and not one with this type of request

[Flamingo]

Trustees ask for various things and letters from employers are not unusual. The Trustee wants to confirm a few things that are apparently listed in your filing. What you need to do is comply with the request if you want your Chapter 13 to go through.

[wayne-o]

I believe you posted earlier that you were trying to get lower payment based on lower income. The trustee just wants to verify what you are saying is true and that its a permanant situation.

[justplaintired]

Is this normal? My DH O/T goes up and down which is evident from his paystubs. There is never a guarantee of O/T, it's all dependent on how busy his factory is. How could they sign something when no one can predict the future? He lost O/T off and on for a period of 2-3 yrs, now he is getting some back, but we don't know for how long. I mean it's a factory and since no one can see into the future on this crazy economy for him to have his employer sign anything seems bizarre. So what exactly would he ask his employer if the trustee requested this? I mean his employer simply couldn't answer this question, no one can, can they? This one has me puzzled.

If the hope is that this economy will turn around, then we certainly hope he can go back to a 5 hour O/T a week like he had before, but we aren't counting on this and his employer can't say it will or won't happen. Right now we are thankful when he gets 3-4 hours a week, let alone 5.

[Flamingo]

Is this normal? My DH O/T goes up and down which is evident from his paystubs. There is never a guarantee of O/T, it's all dependent on how busy his factory is. How could they sign something when no one can predict the future? He lost O/T off and on for a period of 2-3 yrs, now he is getting some back, but we don't know for how long. I mean it's a factory and since no one can see into the future on this crazy economy for him to have his employer sign anything seems bizarre. So what exactly would he ask his employer if the trustee requested this? I mean his employer simply couldn't answer this question, no one can, can they? This one has me puzzled.

If the hope is that this economy will turn around, then we certainly hope he can go back to a 5 hour O/T a week like he had before, but we aren't counting on this and his employer can't say it will or won't happen. Right now we are thankful when he gets 3-4 hours a week, let alone 5.

It's all normal - the Trustee wants to verify things that one may be stating as to their income fluctuations. The Trustee will probably also monitor the situation by having you send in your tax returns to him for review each year after filing. The Trustee can do all this and request things as he wants because he is in control of your entire financial estate during the Plan. If you don't comply with the requests, you risk plan dismissal.

I hear ya as to overtime and hours being cut. Many are losing their jobs also. Hopefully this market will correct itself soon and things start turning around.

[justplaintired]

Ok is this on C7 or C13? We fall below the median and have forever. Our income has been in the mid to high $30,000. We have yet to top the $40,000 mark. We are hoping that will change, but who knows? So if our income has been about the same over a period of years do you think they will still want all this info? We have collected paycheck stubs for myself (6-8 hr job/week) and DH for a year. Will this be enough? If the cost of living had not gone threw the roof, I am unsure where we would be now. But today gas here went for $3.16 this morning to $3.45 by this afternoon???????? Crazy!

[start-n-over]

My husband works flat rate and his pay fluctuates depending on how busy the shop is. The economy turn down has people not spending money on fixing their cars. Although I can't understand why you would want to burn more 3.00+ gallon gas by not maintaining your car, but some people can't see that. Anyway, he made more money our second year in plan and less this last year. Our trustee knows that expenses are going up. They won't stay the same for 3 years. I was lucky our trustee didn't care she just looked at the prior years earnings and based it on that. I think they adjust for inflation and with the gas prices going up as well as groceries (GEEZ!) That overtime when it returns will be a good thing. Good luck to you.

[thomasj]

Well I got a letter from my employer regarding the reason i lost the Shift Dif, but they will not write a letter about the O/T. My HR rep said they can not provide a letter because with the down turn in my company and Finance Industry they can not see the future. So im still puzzled and now my employer knows that im filing BK 13. We just had 2nd round of lay offs
1)March 17th 218 people
2)April 11th 120 people

Well thank full for still being employed just need to get thru the BK meeting on April 23 my Atty got my payment to $365 from $480 with the new pay reductions. But she also said that she thinks my 401k is going to cause me issues? I read that they can not touch or make you stop paying back 401k loans or contributing to your 401k. Is this true?

[lrprn]

I read that they can not touch or make you stop paying back 401k loans or contributing to your 401k. Is this true?

The court and your trustee cannot touch a retirement account. However, some local courts do not allow you to pay back a 401K loan during bankruptcy while you continue to make contributions. These courts say that you are paying back yourself at the expense of your creditors and deny the repayment on those grounds.

This is a hotly contested area of bk law now, and there's variation between districts depending if they have had a case filed related to this issue that required the bk judge to make a ruling and what the ruling was.

In our district we were the test case for the ability to repay 401K loans during Ch 13 while continuing to make reasonable contributions. Our court judge ruled in our favor (we have a great lawyer! ), so we are allowed to repay several of my husband's 401K loans during our Ch 13.

However this is not necessarily the case everywhere. You need to ask your lawyer if case law decisions have been made regarding this issue in your district yet and what the ruling was.

[thomasj]

lrprn, I provided a document from my company 401k plan. The 401k plan for my company states as long as im working for my company, i have to pay back any loans. but if im termed then must pay it back at that time or take tax penalty. I can not stop paying it back just because I feel like it. Can the judge or trustee make me stop and cancel the pay back. It comes out of my check every payday $1100.00. I currently have 3 years left on the loans. My Atty said that this would help, but she is still unsure.
Is there anyone with 401k loans that are still paying them back in a ch13 Plan? what did the UST claim or how did they take CH 13 plan with loans. Im worried this is where it is going to fall apart.

Cup a noodle,Rice and beans for 5 years is going to be hard to do.

[Flamingo]

lrprn, I provided a document from my company 401k plan. The 401k plan for my company states as long as im working for my company, i have to pay back any loans. but if im termed then must pay it back at that time or take tax penalty. I can not stop paying it back just because I feel like it. Can the judge or trustee make me stop and cancel the pay back. It comes out of my check every payday $1100.00. I currently have 3 years left on the loans. My Atty said that this would help, but she is still unsure.
Is there anyone with 401k loans that are still paying them back in a ch13 Plan? what did the UST claim or how did they take CH 13 plan with loans. Im worried this is where it is going to fall apart.

Cup a noodle,Rice and beans for 5 years is going to be hard to do.

I had a small 401(k) loan ($1,300 for dental work) at the time of our filing and what the Trustee did was list it but that it would be continued to be paid directly by me out of my paycheck bi-weekly and there would be no change. The same applied to our mortgage and second mortgage. However, when I saw the amount of your payment every payday, that could be an issue. That is a large payment every payday - may I ask what the loan was for and when it was taken out? You can extend a 401(k) loan out over a period of five years - I am wondering if they will make you revise it to make the payment lower. The size of your payment is cause for concern because the Trustee wants as much money as possible that is available to pay to your creditors. I'm sure the trustee could order you to stop making those payments and force you to take the balance as a distribution and be responsible for the taxes and penalties.

Your company policy is normal policy and that is the way loans work with a 401(k). If you leave the company, it will be treated as a disbursement and you will be required to pay taxes and penalties on the unpaid balance.

[thomasj]

The Total is a monthly total for $1100 + contribution to the plan. I lowered my contribution to the minimum of 4% to get the company match, sorry for the confusion its $550.00 every pay check. I used the loan to do some remodeling to my condo which i have forfitted because i cant afford it anymore due to loss of income ( spouse left ) and some of the money went to a DUI that i had to pay for the fine and atty fees $10,000 and the DUI classes $1500.00 . It is was a 5 year i only have 3 more years on it and it will be paid off. Im really thinking of just dimissing my case and refiling in 6 months hoping to get a lower payment. Just that i was making alot of money in the end of the year and that what there going buy and now i make basically my base pay no O/T or shif dif.

[Flamingo]

The Total is a monthly total for $1100 + contribution to the plan. I lowered my contribution to the minimum of 4% to get the company match, sorry for the confusion its $550.00 every pay check. I used the loan to do some remodeling to my condo which i have forfitted because i cant afford it anymore due to loss of income ( spouse left ) and some of the money went to a DUI that i had to pay for the fine and atty fees $10,000 and the DUI classes $1500.00 . It is was a 5 year i only have 3 more years on it and it will be paid off. Im really thinking of just dimissing my case and refiling in 6 months hoping to get a lower payment. Just that i was making alot of money in the end of the year and that what there going buy and now i make basically my base pay no O/T or shif dif.

I can tell you now that they will now allow you to contribute that much to your 401(k) plan, if anything at all. I am not certain how they are going to handle the $550 loan payment per month on your 401(k). I am thinking they may either have you redo the loan and spread it out over a longer period to make the payments smaller or have you take it as a distribution freeing up the $550 per month for creditors. I would certainly go over the entire thing with a fine tooth comb with your attorney. I know it's tough but you will get through all this and get it straightened out. Just communicate openly and fully with your attorney.

[thomasj]

Here it is I talked to my atty today and she is leaving the firm on the 25th of this month. 2 days after my conformation hearing at the court house. Well get this she says with the amount I’m making I don’t have and disposable income at all the only I consider income is the 401k loan payment...She said you can just file a chapter 7 but she knows the UST and judge are not going for that with $1100 going to my 401k loan and 200 to get the company match.
This is what she said I can afford a payment of $50 bucks per month for 28 months till my 401k loan is paid off then the payment will jump to $1480.00 per month for the remainder for the 60 months. She said to call the vanguard and see if I can take early with draw on part of the loan and use that as disposable income. If I continue working here I have to pay the loans back...Some one give me so advise should I just dismiss and re file in a few months and try and figure the 401k thing out first and go from there I did not know this was going to such a big issue...

I am so confused now...this is getting to cause me stress and a heart attack...