Chapter 13 Post-Confirmation Amendment of Schedule I and J

[pyxis]

Hello,

I'm in a 3 year 0% plan.

I recently filed a motion to the court in the Eastern District of Michigan to keep our 2011 tax return because unanticipated medical expenses. I filed a motion the year before and no one objected. However, today I checked PACER and apparently the trustee has objected this year based on the fact that there was a $20,000 difference in income on the tax returns.

The increase in income is because I worked extra overtime to pay for my wife's medical expenses. She was diagnosed with cancer and another disease that requires lifelong monthly treatments.

However, the Trustee is mistaken; there really isn't a $20,000 difference. The trustee is basing this on the tax return filed the year we filed for bankruptcy. We did not use that figure in calculating the original Schedule I. The difference between the original Schedule I and last year's tax return is really only about $5000.

I was going to file an amended Schedule I and J based on the increased income to cover the increase in medical expenses after the motion to keep the tax returns, but the trustee beat me to the punch. She is requesting I file an amended Schedule I and documentation of the proof of income. And she said some stuff about good faith in the court filing.

What I have is a procedural question. I'm just wondering what I need to respond to the Trustee's request. I still haven't received anything from the court since this was filed with PACER today. Do I just write a response to the court with the amended schedules attached? I did find a "cover sheet for amendments" on the courts website but I'm not sure if that's for post-confirmation amendments. Or do I need to send a response to the Trustee's filing to the court.

Any assistance is appreciated. And of course I will call the clerks office and ask some questions. Just wanted to know if anyone here has any experience though.

Thanks!!

P.S. I'm in the final year of my Chapter 13! Not nearly as stressful as I thought it would be when I first filed.

[justbroke]

What I have is a procedural question. I'm just wondering what I need to respond to the Trustee's request. I still haven't received anything from the court since this was filed with PACER today. Do I just write a response to the court with the amended schedules attached? I did find a "cover sheet for amendments" on the courts website but I'm not sure if that's for post-confirmation amendments. Or do I need to send a response to the Trustee's filing to the court.

Procedurally, you file amendments by annotating the form (near the top) with the word "AMENDED". If they have a cover sheet, use that. It just helps the Clerk's staff understand what you are sending. Please note, that amending Schedule I/J may require an addendum fee of $26 (you can find out by asking the Clerk of the Court). You should also SERVE the amendment and any opposition or amended motion on the Trustee as well.

As for the Trustee's objection, you are going to need to do a few things. First, you could file the new Form I/J but that's separate. Then you will need to either schedule a hearing if you haven't already scheduled one. If you do respond by filing an OPPOSITION to OBJECTION or an AMENDED MOTION, you can further clarify the request to keep the refund.

The issue is simple and the Trustee is correct. Your income increased significantly (more than 10%) from confirmation, you pledged to contribute all disposable monthly income (DMI), you pledged all tax refunds, and you are trying to deviate from that. This will go to a hearing where you can present evidence of why you should be able to retain the tax refund and why your plan should not be amended to increase your payment to the Trustee. Admissible evidence.

In the end, the Trustee is not mistaken. The Trustee goes by what they see filed in your case. The only way for the Trustee to understand what your DMI should be, is to look at your Schedule I/J and see what your income and expenses are. Hopefully, you have done the math correctly on your Schedule I/J. This will go before the judge for hearing so you need to be prepared by showing that your DMI is still the same.

Why did you enter a Chapter 13? Was it to save property or because you were over the median or found to be able to fund a Chapter 13? Just curious.

[pyxis]

Why did you enter a Chapter 13? Was it to save property or because you were over the median or found to be able to fund a Chapter 13? Just curious.

I believe our original attorney said to enter a Chapter 13 to strip the second mortgage from our house because it was valued significantly less than the mortgage at the time we contemplated filing for bankruptcy. We were under the median at the time we filed for bankruptcy. Currently we are paying enough for the previous attorney's fees, an unpaid property tax, and the trustee fee.

As for the Trustee objection I'm not saying she is wrong. We realize that our income went up. I just wanted to clarify that we did anticipate a higher income when we first filed the original Schedule I. So compared to the original Schedule I, it doesn't seem like it's that big of a jump. I know it was a big increase but it was all overtime that was not available to me during the year I filed for bankruptcy. And the only reason I am working this overtime is to cover my wife's medical expenses. I do have clear evidence (bill and such) to show to the court. If not for the medical expenses I wouldn't even be working this OT.

Some expenses went up a little also. Transportation costs went up bc gas is up and some other bills went up by a little bit.

Is there a chance if I talk to the trustee and explain the increased income and expenses that she will drop the objection? Or does that rarely happen. I really don't want to miss any work to go to court.

Anyways I'm going to go ahead and file the amended Schedule I and J with the court. Then write a response to the Trustee's objection.

Thanks for the reply...much appreciated! I'm probably nuts but I kind of enjoy learning about this process as I go along!

[justbroke]

Is there a chance if I talk to the trustee and explain the increased income and expenses that she will drop the objection? Or does that rarely happen. I really don't want to miss any work to go to court.

This is going to a hearing, so you really don't need to explain it to the Trustee except through, maybe, an Amended Motion to keep the tax refund. (Actually, in some Districts, keeping a tax refund actually requires a Motion to Modify Confirmed Plan so that you can keep it. Your court is probably treating your Motion to Keep refund as a Motion to Modify Confirmed Plan.)

What I have found, when wanting to keep a refund, is to not only motion the court, but write a separate letter to the Trustee explaining the reason why. At least, that is the process in my District. I think your real issue is that the Trustee saw a "substantial" increase in income. From everything in front of them, they can't tell if you received a raise, a new job, or are working overtime. Overtime is generally not considered "regular" income, so you should probably be okay at the hearing. However, a plan which proposes to pay less than 100% to the allowed secured claims must surrender ALL disposable income. That is the bar.

It may work out to write the direct letter and may be the Trustee will drop the objection. Otherwise, it will go to a hearing and you'll be able to explain it before the judge.

[pyxis]

In our district, keeping the tax refund is considered a plan modification. This is the local rule for a plan modification:

Any such proposed plan modification shall:
(1) Be served as required by F.R.Bankr.P. 3015(g);
(2) Comply with LBR 3015-2(b);
(3) State with specificity the impact of the proposed plan modification on each class of
creditors;
(4) Be accompanied by a form “Notice of Deadline to Object to Chapter 13 Plan
Modification,” available on the Courts website.

I've actually done the plan modification to keep the tax refund the first year. No one objected

[tigergem]

I believe our original attorney said to enter a Chapter 13 to strip the second mortgage from our house because it was valued significantly less than the mortgage at the time we contemplated filing for bankruptcy. We were under the median at the time we filed for bankruptcy. Currently we are paying enough for the previous attorney's fees, an unpaid property tax, and the trustee fee.

As for the Trustee objection I'm not saying she is wrong. We realize that our income went up. I just wanted to clarify that we did anticipate a higher income when we first filed the original Schedule I. So compared to the original Schedule I, it doesn't seem like it's that big of a jump. I know it was a big increase but it was all overtime that was not available to me during the year I filed for bankruptcy. And the only reason I am working this overtime is to cover my wife's medical expenses. I do have clear evidence (bill and such) to show to the court. If not for the medical expenses I wouldn't even be working this OT.

Some expenses went up a little also. Transportation costs went up bc gas is up and some other bills went up by a little bit.

Is there a chance if I talk to the trustee and explain the increased income and expenses that she will drop the objection? Or does that rarely happen. I really don't want to miss any work to go to court.

Anyways I'm going to go ahead and file the amended Schedule I and J with the court. Then write a response to the Trustee's objection.

Thanks for the reply...much appreciated! I'm probably nuts but I kind of enjoy learning about this process as I go along!

SO sorry I missed your post. I have filed a bunch of Modifications to my Plan since I started, including for keeping income tax refunds. I always get objections from the trustee's office, but that is no big deal. I merely respond respectfully with the documentation they requested. And yes, the objection (knock on wood) is withdrawn, once I file my response. It never gets so far as a hearing. You should file the Amended I and J as a matter of course when you do a Modification, and use the word "contemporaneously" in your Motion to Modify. They like that word. :-) (kidding)