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How is the money disbursed???

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    How is the money disbursed???

    When a secured debt is paid, does that money move to other secured debt or just spread out across the creditors?

    #2
    Truthfully, trustees don't use one formula fits all. Every trustee has their own method of how/when creditors get paid. So although one could guess, it won't necessarily be the right answer.
    Filed Chapter 13 - 07/20/12
    Discharged 8/2/16

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      #3
      In my case, I had about 9 payments to the trustee pre-confirmation that were not disbursed until after confirmation. The first post-confirmation disbursement paid my tax debt to the IRS and state/local governments in full, so they are the first creditor to get paid in full. The remaining $$ in that disbursement went to my secureds (pre-petition mortgage arrearage, HELOC arrerage, credit union personal loan) pro-rata. For the next 15 months, nothing but the secureds were paid. When the secureds were paid off, then the unsecureds got the rest of the payments for the next three years.
      Filed Ch 13 Fall 2013, 60 month plan, awaiting discharge (Trustee Final Report and Notice of Discharge is filed)

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        #4
        Originally posted by switch625 View Post
        In my case, I had about 9 payments to the trustee pre-confirmation that were not disbursed until after confirmation. The first post-confirmation disbursement paid my tax debt to the IRS and state/local governments in full, so they are the first creditor to get paid in full. The remaining $$ in that disbursement went to my secureds (pre-petition mortgage arrearage, HELOC arrerage, credit union personal loan) pro-rata. For the next 15 months, nothing but the secureds were paid. When the secureds were paid off, then the unsecureds got the rest of the payments for the next three years.
        Interesting, Sophieanne is right, I wish my Trustee paid all secured first. This trustee seems to be spreading out my money all across the board. I prefer to have the secured paid first and the unsecured get whats left. Since I'm in a 100% plan I guess everyone gets all they're owed.

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          #5
          TM0101....that's the right way to think. In a 100% plan since everyone is getting paid, it doesn't matter how the disbursements get made; just as long as they do. Good luck as your plan continues.
          Filed Chapter 13 - 07/20/12
          Discharged 8/2/16

          Comment


            #6
            We pay the mortgage and two cars outside the plan. The payments were broken down. Once we pay the mortgage that money does not go to the trustee. Our plan, which is not written in our bankruptcy paperwork, is our intent to pay off the HEL and set money aside to pay the property taxes (that is what the amount we pay for the mortgage will be used for). When one of our cars is paid off the money that use to be the car payment (paid outside the plan) will go to the trustee, our money that is deducted from paycheck will increase by that amount for the remainder of the 5 yrs (it will be about 18 months left at that point) The other car will not be paid off so we will continue to pay outside the plan.

            I would think most of it will be written down into the bankruptcy paperwork in the amount of money you are paying back over the 3 or 5 yrs that you make payments.

            It is my understanding, at least in my county/state, that the IRS is paid off first before anyone. We had money to pay to the IRS when we filed and it was paid first before any creditor from the plan.

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              #7
              Even at 100% it would be better for the tax authorities and secureds to be paid off first. Things can happen over the course of the plan that can impede your ability to make payments.
              Filed Ch 13 Fall 2013, 60 month plan, awaiting discharge (Trustee Final Report and Notice of Discharge is filed)

              Comment


                #8
                switch625 - even if what you're saying is correct...is it really right to say that when the person has no control over what the trustee does? What we would like to see and what actually happens may be out of our control (as in this case)...not every trustee does things the way your trustee did and you can't ask a trustee to change how they do business.
                Filed Chapter 13 - 07/20/12
                Discharged 8/2/16

                Comment


                  #9
                  carmella13 - how the TRUSTEE disburses funds is NOT written on the confirmation. If you have a special agreement, like in your own situation, it may be written but everyone else's debts are being paid at the trustee's discretion.
                  Filed Chapter 13 - 07/20/12
                  Discharged 8/2/16

                  Comment


                    #10
                    our trustee paid all secured first. Once these were paid off he moved to distributing an equal percentage to all of the remaining unsecured debt. it was kind of nice to see our vehicles paid off already, with one bank sending us the title (the other holds until discharge evidently). our lawyer was paid off first, of course.

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                      #11
                      Originally posted by fiveyear View Post
                      our trustee paid all secured first. Once these were paid off he moved to distributing an equal percentage to all of the remaining unsecured debt. it was kind of nice to see our vehicles paid off already, with one bank sending us the title (the other holds until discharge evidently). our lawyer was paid off first, of course.
                      I wish my trustee paid all the secured first. My arrears are paid, only secured left is the two cars. If she paid secured first the cars would be paid off in three years

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                        #12
                        @tm010.. if you watch the payments (which is more just of interest), your trustee may change payment strategy. There is no rhyme or reason and you just never know.
                        Filed Chapter 13 - 07/20/12
                        Discharged 8/2/16

                        Comment


                          #13
                          Originally posted by sophieanne View Post
                          carmella13 - how the TRUSTEE disburses funds is NOT written on the confirmation. If you have a special agreement, like in your own situation, it may be written but everyone else's debts are being paid at the trustee's discretion.
                          I understand what you are saying. I always try to post this what happened in my situation/talk to your attorney. I may not have been clear in what I was saying. That the amount of the payments are written down and if there is any change expected during the duration of the 60 months it's written down, in my case. I was aware it's not written how the trustee pays out the money for example which creditor gets how much each month, etc. Sorry, If I wasn't clear and thanks for clarifying.

                          Comment


                            #14
                            @Carmella -thanks for clarifying...it's not a problem at all; we all have experiences to share. What you just wrote makes perfect sense
                            Filed Chapter 13 - 07/20/12
                            Discharged 8/2/16

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