Our chapter 13 journey has started

[HLS]

I am also in Kansas city. Filed 10/15

[notreallyme]

Update that I should have posted a couple of weeks ago. Lawyer talked to trustee several times pointing out 1) we were in a 100% plan, 2)we had confirmed early on that tax returns were not required and 3) the current payment plan would have us 100% paid well before 60 months. Trustee said tough, keeping tax returns isn't spelled out in confirmed plan, so he can grab them. Lawyer then filed a motion to retain. As soon as that was filed, trustee sent out a letter dated the same date red stamped "update" that said we could retain tax return and bonus. I guess he thought he could just demand anything he wanted and our lawyer wouldn't fight. Up side, we keep the money. Down side, additional legal expenses (maybe - not sure if this is included in the upfront legal fee we paid or if this is additional). If the trustee plays the same game next year, we will probably be in a position where we can say fine and payoff the entire balance - of course that depends on the company having another good year and paying profit share.

[notreallyme]

I am also in Kansas city. Filed 10/15

Kansas side or Missouri side. I am on the Kansas side and my trustee is Griffen.

[HLS]

How many Missouri side I can’t remember my trustee’s name offhand

[notreallyme]

It has been a long time since I posted, things are going smoothly. However, a couple of interesting things with our mortgage payment - want to see how our trustee responds. Like I posted earlier, last winter/spring our mortgage was sold to another bank (second sell in two years after the first one went bankrupt). well, when the mortgage was transferred, the old mortgage holder didn't transfer escrow account correctly (they did a few months later), so the new mortgage holder said we had a deficit so raised our payment 400 or so to make up the shortfall. trustee immediately ran to the court and raised our monthly payment by around $300 - this was even though our old payment amount would have still paid us off early even with the higher mortgage payment. (mortgage payment is inside the plan).

Well our mortgage holder just lowered our escrow payments by $700 per month starting 1/1/2026. I am interested to see if our trustee is in a hurry to scurry to court to lower our payment with the same urgency he had our payment raised. I doubt it but don't really care at this point. In addition, the mortgage company is going to refund over $5,000 from the escrow account as the account is new well above the allowable two months of payments. I am assuming this refund will go to the trustee.

As I said above, don't really care if the trustee lowers our monthly payment. I am going to receive a good size bonus in March. So I am going to talk with my lawyer in January (bonus might change if we have a really bad December so going to hold off until it is confirmed) and have him file a motion to pay off early and get a payment amount from the trustee. Based on the escrow refund amount and the extra $700 going to unsecured instead of mortgage starting in January, we would probably be fully paid in June 2026 rather than in June 2027 which is month 60. If we weren't in a 100% plan, I probably wouldn't ask to pay off early, but since we are in a 100% plan with mortgage inside the plan, this will save us a lot of trustee fees over the remainder of the year.

[justbroke]

Nice to hear from you. If you can swing it, why not payoff early when you're in a 100% plan and have a lump sum available to make that payment. Otherwise I would resist.

[notreallyme]

Yeah, if I was in less than a 100% plan, I wouldn't make an extra payment - the trustee would just raise the payment to the unsecured. Plus in a less than a 100% plan, they trustee fee is actually coming from the available funds to pay creditors. In a 100% plan, the trustee fee is on top of the payment to the creditors. My wife and I looked at it - some cons of paying off earlier is that our parent plus student loans we took out to help our kids with school will come out of abeyance and even paying off early the bankruptcy will still stay on our record for the full seven years. Offsetting that the savings from the trustee fee will be larger than the amount of the student loans, so from that alone we will be slightly ahead. Then with the unsecured fully paid off, that part of our monthly payment will come to us and can go into savings or home repairs. Biggest part of the savings on trustee fees is coming from our first and second mortgage. Trustee is paying those, but basically was tacking on 10% on top of that. (although his fee just reduced to 8% in October).

[notreallyme]

So the trustee filed and got approval from the court to lower our monthly payment by $700 - the amount of the decrease in our mortgage payment. I really wish he would talk with us or our attorney before adjusting payments, especially since 1) we are in a 100% plan and 2) not all creditors filed so the original payment amount would have paid us off well before the 60th month. Still planning on paying off (after we get trustee and court approval) in March, so we will just set aside the extra that shows up in my paycheck into savings and use that as part of the lump sum payment in March.

[justbroke]

The Chapter 13 Trustees tend to be like that. Act first, ask questions after.

[notreallyme]

So, our payoff may be quicker than expected. Our tax return was larger than expected (long explanation below). We voluntarily submitted these to the trustee - filed as early as possible and had federal refund back on 02/04/26. Based on the refund and the two payments that he will record in February (seems to be a 12 day lag between pay date and when it shows up in his ledger - so the payments from 1/30 which showed up 2/11 and the payment from 2/13 which should show up on 2/25) he should have a little more than what is needed to pay the outstanding claims from the NDC claims summary plus the on-going mortgage payments. This includes the amount to pay his 8% trustee fee on top of this.

Thursday we saw on pacer that he filed a "Notice of Plan Approaching Completion". We have been asking our lawyer for over a month to get a solid payoff amount incase my estimate is wrong. We asked our lawyer again yesterday to get this amount. We have also asked when we should resume making direct payments on the mortgage and HELOC as we don't want to fall behind, especially not before the final audit.

Long story on large tax return. I know that is generally a bad idea to intentionally get a large return - you are basically giving an interest free loan to the government. However, for tax years 2022 and 2023, we owed a big payment - my wife's employer always under withheld. We decided we would never owe a tax payment in April again. I changed my w4 to no exemptions, multiple jobs part way through 2024. For the 2024 taxes, withholdings were within $200 of taxes owed. in 2025, my wife left her job to basically become a full time caregiver for her mother who has worsening dementia but I left my w4 as is. This along with the changes in tax law led to an even bigger return than we had originally planned on. Unless interest rates really go up, we are going to leave our withholdings as they are. Then we plan on using the annual refund to partially go into savings each year and to also fund a vacation on our anniversary in March.

Interesting side note - after the trustee had already received the payments, we received a letter stating that he had received our tax returns and was reviewing them and to not spend any funds until he determined if we had to submit them to him. Letter was dated 01/26 but didn't show up in our mailbox until 02/13. On 01/22 our lawyer had already communicated to the trustee that we were voluntarily remitting the refund and had previously forwarded the returns to the trustee. We are in a 100% plan that was actually overpaying the amount so was going to be shorter than 60 months anyways. Our plan has no requirement to provide the refund to the trustee, so we found the timing of letter a bit humorous.