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Finally received the confirmation order and now some questions

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  • Finally received the confirmation order and now some questions

    The court confirmed my Ch 13 BK about a week or so after my confirmation hearing, so I'm glad (a relative term) to be finally under the order! Here's a synopsis of what unsecured debt was filed by me and claimed by creditors:

    Total unsecured debt in the petition: $127K
    Total unsecured debt for which proofs of claim were filed: $64K (50% of the total)
    Total unsecured debt for which proofs of claim were filed by original creditors: $23K (about 1/3 of the 64K)
    Total unsecured debt for which proofs of claim were filed by third parties (i.e., debt buyers) $41K (about 2/3 of the 64K)

    One creditor who I had several credit cards with totaling nearly 50K of unsecured debt never filed proofs of claim (they had six months to do so)!!

    So now my questions (I know I should consult my attorney, but curious on your take):

    -Is the above typical of Ch 13 plans? So many third-parties claiming my debt and one creditor blowing off 50K (and another on a lesser 5 figure sum)?

    -My CO was bare-bone (as someone in my district predicted in a post a couple months ago) with no mention of tax refunds or incurring debt over a a specific amount (or any and all debt for that matter) requiring court approval, so what does that mean. More specifically what does this mean to you?
    "...that all property of the estate, including any income, earnings, other property which may become a part of the estate during the administration of the case which property is not proposed, or reasonably contemplated, to be distributable to claimants under the plan shall revest in the debtor(s).."

    -Now that my property "reverts" back to me, can I have that yard sale now or drop off the old clothes at Goodwill or does the trustee still retain control? (all my yard-saleable, donation property was exempt in the petition). Legally, what am I supposed to do with the yard sale proceeds?

    -Trustee made the first payment and just about all of it went to my priority debts, trustee fee, including all of the taxes I owed. If that is the case, what does it mean when taxes are "deferred" for payment under a Ch 13 plan? "Deferred" from payment of the original due date? My interpretation was that "deferred" meant paid later or at the end of the plan.

  • #2
    Originally posted by switch625 View Post

    -Is the above typical of Ch 13 plans? So many third-parties claiming my debt and one creditor blowing off 50K (and another on a lesser 5 figure sum)?
    It is not uncommon for creditors to not bother making claims. It is very common for creditors to sell debt after you file BK and for the new owner to file a claim. I had balances on 3 credit cards when I filed and they were all sold to Ecast Settlement Corp or PRA Receivables Management who filed claims.

    Originally posted by switch625 View Post
    -My CO was bare-bone (as someone in my district predicted in a post a couple months ago) with no mention of tax refunds or incurring debt over a a specific amount (or any and all debt for that matter) requiring court approval, so what does that mean. More specifically what does this mean to you?
    "...that all property of the estate, including any income, earnings, other property which may become a part of the estate during the administration of the case which property is not proposed, or reasonably contemplated, to be distributable to claimants under the plan shall revest in the debtor(s).."
    It seems that not everyone agrees with what that means. The language is from Section 1327 of the BK Code. Here's an article that discusses different interpretations: http://www.abiworld.org/committees/n...heritance.html
    Originally posted by switch625 View Post
    -Now that my property "reverts" back to me, can I have that yard sale now or drop off the old clothes at Goodwill or does the trustee still retain control? (all my yard-saleable, donation property was exempt in the petition). Legally, what am I supposed to do with the yard sale proceeds?
    Check with your attorney, but I think you can sell your exempt property and do whatever you want with the proceeds. I suggest you put the money in savings. It will really help get you through your plan.

    Originally posted by switch625 View Post
    -Trustee made the first payment and just about all of it went to my priority debts, trustee fee, including all of the taxes I owed. If that is the case, what does it mean when taxes are "deferred" for payment under a Ch 13 plan? "Deferred" from payment of the original due date? My interpretation was that "deferred" meant paid later or at the end of the plan.
    Under 11 U.S. Code § 1322(a), a plan "(2) shall provide for the full payment, in deferred cash payments, of all claims entitled to priority under section 507 of this title, unless the holder of a particular claim agrees to a different treatment of such claim". I did a little research and it seems that deferred cash payment means that a fixed amount due is paid in equal payments over a period of time. Don't worry about when the trustee pays things. Just make your plan payment and any payments that you are supposed to make directly. You are protected by the automatic stay, regardless the order in which the trustee pays your creditors.
    Last edited by LadyInTheRed; 08-11-2014, 01:33 AM.
    LadyInTheRed is in the black!
    Filed Chap 13 April 2010. Discharged May 2015.
    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

    Comment


    • #3
      Originally posted by LadyInTheRed View Post
      Under 11 U.S. Code § 1322(a), a plan "(2) shall provide for the full payment, in deferred cash payments, of all claims entitled to priority under section 507 of this title, unless the holder of a particular claim agrees to a different treatment of such claim". I did a little research and it seems that deferred cash payment means that a fixed amount due is paid in equal payments over a period of time. Don't worry about when the trustee pays things. Just make your plan payment and any payments that you are supposed to make directly. You are protected by the automatic stay, regardless the order in which the trustee pays your creditors.
      Thanks LITR! I'm watching this because I'm looking to claim any state/local tax payments made by the trustee to the taxing authorities so I can claim them on my 2014 tax return and get a refund in 2015 or reduce withholding now to free up $$. With state/local presumably paid in full, it will make for a nice deduction.

      Comment


      • #4
        Originally posted by switch625 View Post
        Thanks LITR! I'm watching this because I'm looking to claim any state/local tax payments made by the trustee to the taxing authorities so I can claim them on my 2014 tax return and get a refund in 2015 or reduce withholding now to free up $$. With state/local presumably paid in full, it will make for a nice deduction.
        That's a good reason to pay attention to what the trustee pays!
        LadyInTheRed is in the black!
        Filed Chap 13 April 2010. Discharged May 2015.
        $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

        Comment


        • #5
          An update...I confirmed that my state did receive the back taxes I owed and I paid through the Ch 13 plan, which wasn't alot, but I like knowing I'm no longer a deadbeat, plus being on solid ground in taking the 1040 deduction for the now paid taxes. Now I just want to confirm IRS and my local earned income tax collector got their payments from the trustee.

          Comment


          • #6
            switch, I had asked a similar question about what exactly the confirmation order meant: below is what des told me:

            In "cleaned up" Legalese:

            all property of the estate. . . including. . . after acquired property. . . that is not proposed or contemplated to be distributable. . . under the plan belongs to the debtor. . . However. . . property received by the trustee, such as plan payments and tax refunds (if the Order requires the turnover of refunds). . . remains property of the estate until either the Plan is completed or all allowed claims are paid in full, whichever happens first.

            Hope that clears it up.

            Des.


            I have sold things and donated things, no one cares. The only time I hear from the trustee is for the annual statement, he has never asked for tax returns although my attorney said he could.
            Discharged 5/2015

            Comment


            • #7
              Jange, I saw that post over the summer from Des. We are fortunate to live in a relatively hands-off district, (as long as you keep your end of the deal). Hope the last few months of your 13 go well.

              Comment


              • #8
                Originally posted by switch625 View Post
                We are fortunate to live in a relatively hands-off district, (as long as you keep your end of the deal).
                From what I've read here over the last 5 years, I think that is the norm rather than the exception. Make your plan payments and send in copies of your tax returns if required and the trustee will leave you alone.
                Last edited by LadyInTheRed; 10-22-2014, 11:29 AM.
                LadyInTheRed is in the black!
                Filed Chap 13 April 2010. Discharged May 2015.
                $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                Comment


                • #9
                  LITR I agree, I think it is the norm also.

                  switch, thanks and good luck to you, 5 years is a long time, but it goes by relatively quickly. As long as you make your payments you are not going to hear from our trustee except in January/February when he sends the annual statement. I am so looking forward to being done and not having to make that payment every month. It will be like getting a very nice raise and being able to put that money into savings and my retirement!! I have my 4 remaining envelopes stamped and numbered with my countdown on them...
                  Discharged 5/2015

                  Comment


                  • #10
                    Originally posted by switch625 View Post
                    The court confirmed my Ch 13 BK about a week or so after my confirmation hearing, so I'm glad (a relative term) to be finally under the order! Here's a synopsis of what unsecured debt was filed by me and claimed by creditors:

                    Total unsecured debt in the petition: $127K
                    Total unsecured debt for which proofs of claim were filed: $64K (50% of the total)
                    Total unsecured debt for which proofs of claim were filed by original creditors: $23K (about 1/3 of the 64K)
                    Total unsecured debt for which proofs of claim were filed by third parties (i.e., debt buyers) $41K (about 2/3 of the 64K)

                    One creditor who I had several credit cards with totaling nearly 50K of unsecured debt never filed proofs of claim (they had six months to do so)!!

                    So now my questions (I know I should consult my attorney, but curious on your take):

                    -Is the above typical of Ch 13 plans? So many third-parties claiming my debt and one creditor blowing off 50K (and another on a lesser 5 figure sum)?

                    Since not all the creditors filed a claim, did your planned payment or length of plan get reduced? I'm in a similar boat. $140k of unsecured debt. Thanks

                    Comment


                    • #11
                      Originally posted by Quicke23 View Post
                      Since not all the creditors filed a claim, did your planned payment or length of plan get reduced? I'm in a similar boat. $140k of unsecured debt. Thanks
                      The unfiled claims will not affect the plan payment, because the plan payment is the difference between Schedule I monthly income and Schedule J monthly expenses and since I and J are forward looking, they will not include your unsecured and priority debts as an expense. Your plan payment pays unsecured and priority debt in your petition. If anything, the reduced amount of unsecured debt will nudge me closer to an 100% plan payment, though I'm still a few hundred dollars (per month) away from 100%

                      My Means Test put me in a 5 year plan; don't think the unfiled claims would change that in my situation.

                      Comment


                      • #12
                        Originally posted by switch625 View Post
                        My Means Test put me in a 5 year plan; don't think the unfiled claims would change that in my situation.
                        It doesn't sound like it.

                        Originally posted by Quicke23 View Post
                        I'm in a similar boat. $140k of unsecured debt.
                        It is possible that if enough creditors do not file claims, that your plan could end early. Let's say you are an above-median filer and your plan as confirmed would have paid $90k of your unsecured debt, but the total of approved unsecured claims ends up being only $70k. Once you pay enough into the plan to pay the $70k plus any other amounts that must be paid in your plan, then your plan would end. Your payment would only be lowered if your plan was modified. I don't know if a modification would be approved to lower the payment based on creditors not filing claims. A smart trustee would object to modification because it is better to get more money to creditors early on in case you have a decrease in income that results in modification later or a conversion to a Chap 7. Also, modifying your plan means additional attorney fees that may not be worth it in the long run.
                        LadyInTheRed is in the black!
                        Filed Chap 13 April 2010. Discharged May 2015.
                        $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                        Comment


                        • #13
                          Originally posted by LadyInTheRed View Post
                          It doesn't sound like it.



                          It is possible that if enough creditors do not file claims, that your plan could end early. Let's say you are an above-median filer and your plan as confirmed would have paid $90k of your unsecured debt, but the total of approved unsecured claims ends up being only $70k. Once you pay enough into the plan to pay the $70k plus any other amounts that must be paid in your plan, then your plan would end. Your payment would only be lowered if your plan was modified. I don't know if a modification would be approved to lower the payment based on creditors not filing claims. A smart trustee would object to modification because it is better to get more money to creditors early on in case you have a decrease in income that results in modification later or a conversion to a Chap 7. Also, modifying your plan means additional attorney fees that may not be worth it in the long run.

                          Thanks again LadyInTheRed! My planned payment is at 100%. Your explanation makes perfect sense-that would explain why my attorney said I would be able to modify my plan if all the claims don't come in. Would be nice to pay off the plan early though. Would you happen to know if the trustee fee is a % of the listed debt or a % of the total debt that a claim was made for. The difference between 130k and say 70k is like $6,700.

                          Comment


                          • #14
                            The trustee fee is a percentage of what s\he disperses to creditors.
                            LadyInTheRed is in the black!
                            Filed Chap 13 April 2010. Discharged May 2015.
                            $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                            Comment


                            • #15
                              Originally posted by LadyInTheRed View Post
                              The trustee fee is a percentage of what s\he disperses to creditors.
                              What I don't get with percentage trustee uses is I pay the same amount each month and trustee's take differs by as much as $20. Was wondering if type secure vs unsecure had an inpact.
                              Filed ch 13 03/2012. Final payment made 03/2015. Discharged 8/04/15!!!

                              Comment

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