So what I post here is not a question or even a concern of mine, but just doing some experience sharing (a la 341 meeting stories) about this highly complex (and sometimes not-well-explained) process known as Chapter 13 Bankruptcy. Maybe what I experience in real-time will provide someone with info they are not getting in the books, atty websites, financial advice sites, etc. I feel that no matter how well you prepare yourself for the BK process, you learn something new at nearly every turn in this process. So....
When I researched BK and came upon information to how priority creditors were handled, I had this impression that "priority" meant that the trustee would take your arrearages, divide by 60 and that's the amount each priority creditor got paid each month and the unsecureds get whats left over according to whatever percentage of the leftover plan payment they were entitled based on the Trustee's formula. That includes mortgage, home equity, car, secured loan, taxes. In a previous post, I reported that from my first trustee disbursement, all my tax arrearages were paid in full and all priority creditors were paid whatever was left over. I'm very happy about that, knowing that I'm longer a deadbeat and I got some nice state and local tax amounts to claim on my 2014 1040. However, since my understanding is that tax payments under the plan are "deferred" have to revisit what "deferred" actually means! Or study the BK Code and local rules.
My second disbursement was made this week at around the same time as my first. According to NDC, my second disbursement was all priority creditor arrearages, which is mortgage, home equity, a secured loan and the T's fee. No payments whatsoever to unsecureds. The payments to the home loans were fairly sizable, which makes me happy since I have a shortfall on the escrow from getting behind on payments last year and I have more interest to report on my 2014 1040 than expected. It's looking like in my case, the secureds are truly priority; getting paid first and out of the way.
As for the unsecureds, I'm losing no sleep as to when they get paid. Most of them are debt buyers anyway.
When I researched BK and came upon information to how priority creditors were handled, I had this impression that "priority" meant that the trustee would take your arrearages, divide by 60 and that's the amount each priority creditor got paid each month and the unsecureds get whats left over according to whatever percentage of the leftover plan payment they were entitled based on the Trustee's formula. That includes mortgage, home equity, car, secured loan, taxes. In a previous post, I reported that from my first trustee disbursement, all my tax arrearages were paid in full and all priority creditors were paid whatever was left over. I'm very happy about that, knowing that I'm longer a deadbeat and I got some nice state and local tax amounts to claim on my 2014 1040. However, since my understanding is that tax payments under the plan are "deferred" have to revisit what "deferred" actually means! Or study the BK Code and local rules.
My second disbursement was made this week at around the same time as my first. According to NDC, my second disbursement was all priority creditor arrearages, which is mortgage, home equity, a secured loan and the T's fee. No payments whatsoever to unsecureds. The payments to the home loans were fairly sizable, which makes me happy since I have a shortfall on the escrow from getting behind on payments last year and I have more interest to report on my 2014 1040 than expected. It's looking like in my case, the secureds are truly priority; getting paid first and out of the way.
As for the unsecureds, I'm losing no sleep as to when they get paid. Most of them are debt buyers anyway.
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