Chapter 13 - So far a nightmare, seemingly getting worse.....

[DarkInDebt]

Looking here for some advice on our situation,

We're in a Chapter 13 going into Month 31 and this has been one nightmare of a trial and tribulation for us. Our plan has went from what seemed like a good chunk of change, to something that now is boarder-lining just plain harassment. Understanding we did some of this to get ourselves into this mess, it just seems the system is getting the best of us. We've made all 31 payments ontime, and in full even after they changed the amount 5 times.

We have some secured debt that is getting the lions share of our payments, and the rest is getting a small percentage. The trustee is rough, to put it mildly. Maybe we don't know what others are experiencing, but there seems to be no pleasing this person/s. Also it seems like our attorney is one step behind, ans always playing catch up.

We needed to add some mortgage arrears due to a nasty predatory lender, so the house is now tied to the Chapter 13. This past week they are wanting to pop the interest rate on the property substantially. It now falls outside the federal standard....

Ontop of this after taxes this year the trustee wants to up the plan payment 25%. Only difference is I took a job making the same money but had my vacation paid out when I changed jobs. and our attorney has given us 2 options. Sell the house, and reduce expenses to fed standards or suck it up basically. We only added the house to the BK to save it, why after 30 months of doing everything to save it would we sell it, only to be homeless with no savings because we aren't allowed to save.

I know this is minimal information, but is there any way we can go to the trustee, talk with the trustee or the judge and have them intervene??

My second question is about our attorney. I know the trustee is looking to get the most they can for the creditors, i truly get that, but I would expect my attorney to be looking out for our well being and I just don't feel like they have been doing everything they could for us. Is switching attorneys in the middle of one of these the way to go ? over half way thru this and we just don't want to have thrown all this money away for nothing.

sincerely

DarkInDet.

[justbroke]

You are represented so you would need to pay your attorney to fight the 25% increase on your behalf. Unfortunately for many Chapter 13 debtors that file with an attorney, that representation -- while it does continue to discharge, dismissal or conversion -- ends at confirmation. Any additional work requires you to pay the attorney. They are required to "monitor" and provide some remedial help throughout the plan, but fighting with the trustee will cost $$.

I can't ell you how much your attorney would charge, but it could be $250+ an hour (depending on your local rules). It reads to me as though this isn't the fault of your plan or your Trustee or maybe even your lawyer. I call this the affect of life interfering with a Chapter 13 Plan. Your plan requires that you surrender, to the custody and control of the Trustee, anything that is "disposable income" and that may include bonuses, tax refunds, or even buyouts of vacation from an employer.

The Trustee saw your tax return and saw that you made more money. Typically, that difference needs to be 10% (but don't quote me) before a Trustee will care. The Trustee then just took your existing Schedule I/J and/or your B22-C (Means Test), calculated the difference between your confirmed plan payment and your "new" income, and then wants the rest to be applied to the plan. That's simply the Trustee's job.

The job of your attorney is to re-look at your expenses on Schedule I/J and maybe redo the B22-A/C to determine whether things have changed with respect to the expenses. If you tell your attorney you want to fight, you should ask how much that would cost (it should be disclosed in your fee agreement).

I don't know what to tell you if your home lender is charging "outside the federal standard" rates. If you have been paying your Chapter 13 on time for 31 months, you should qualify for an FHA refinance (or maybe even their streamlined one). That should bring the rate back down to earth, provided that you have the amount of equity required by FHA for a refinance.

[DarkInDebt]

Thank you for the reply. Council for us has always been semi shady, we were just in a bind and used someone that was " recommended " our first mistake.
I guess we will revisit with the attorney if we can get them to respond and see what are available options are. At this point, we loose both with no assistance so I guess you could call that " life interference " I suppose.

[LadyInTheRed]

If your increase in income is due to a one time payment, why not turn that one payment over to the trustee? If you've already spent that money, than the increase in plan payment should be the amount of the vacation pay divided by the payments remaining in your plan. Is the increase more than that?

[LadyInTheRed]

We needed to add some mortgage arrears due to a nasty predatory lender, so the house is now tied to the Chapter 13. This past week they are wanting to pop the interest rate on the property substantially. It now falls outside the federal standard....

I meant to comment on the above. It sounds like your mortgage is an adjustable rate mortgage and the rate increased and/or you were in a no-interest period that came to an end. You then missed payments. Your plan was then amended to include arrears so you could avoid the lender filing for relief from automatic stay and foreclosing (or maybe your lender did file for relief from the stay and your plan was modified in response to that petition). Is that correct? If so, was your increased mortgage payment taken into account when determining the new plan payment? Has the percentage to unsecured creditors been reduced?

The federal standard should not make any difference unless perhaps you are living in a luxury home that does not seem reasonable for your income. But, to avoid foreclosure, your plan payment must pay the arrears on your mortgage and you must keep up on your regular mortgage payment. That is not the fault of your trustee or your attorney. It is the cost of keeping your home.