In 13 BUT being sued for utility back payments

[Lesa13]

I am about 1/2 way through my Chapter 13 plan with no problems, paying on time, everything is cool. My natural gas provider (whose bills are the subject of this post) is a part of the plan.

After I filed (9/05), I had to put down almost $1,000 as a deposit to them to keep the gas turned on at my house. Somehow, even though I did pay until I left the house in 7/06, I apparently still have a bill of about $1,000 that is outstanding. I paid what I could on the bills and this is reflected. With gas prices as high as they are, I could not pay the extraordinary high monthly bill AND eat AND have gas to get to work, too! I remember coming up with that extremely high deposit was also very difficult and they would not budge on that.

The natural gas company turned this over to a collector who sent me a letter a few weeks ago saying "pay up or we will sue." I wrote back saying that I did not have $1,000 to give them at this point as I was in a Chapter 13 AND the natural gas company creditor was already part of the plan and getting paid under the plan and could they just amend their claim to include this amount

Of course, as I should have known, this is now an "assigned" debt and so the "new" creditor (the collection agency) cannot amend the natural gas claim as they are not part of the plan themselves.

I got in the mail yesterday a pleading with a request for me to sign a consent judgment "in order to avoid further litigation." They want $100 a month plus their interest and attorney's fees beginning 5/20/07.

I am going to send this to my BK atty - but he has so far been next to useless.

My questions:

1. Can I truly be sued and have a judgment entered against me while I am actually involved in the 13? Or will this be judgment be stayed until BK is over?

2. Since this is technically a "new debt", how will trustee see this?

Thanks for any help. My goodness, when will the nightmare end??

Lesa in Missouri

[lrprn]

Lesa, since the money you owe the gas company is from after you filed, you are responsible to pay the bill, even if you are in Ch 13 currently.

I had an emergency hospitalization 10 days after we filed, and we are responsible for paying off all the bills that weren't covered by our insurance (about $2,500). Luckily the hospital set up a payment plan with us so we are able to pay it off a little at a time.

Most utility companies will work with you to arrange a payment plan, but now that the debt has been sent on to collections, you may be more limited in what it may be possible to do at this point to avoid a court judgment. Talk to your lawyer as soon as possible to find out what your options might be. And whatever you do, do NOT miss the court date, even if you have to go by yourself, so that you can explain to the judge all the circumstances involved. Otherwise the collections agency will win and in Missouri can garnish your wages up to 25%, 10% if the person is head of a family and a Missouri resident, or the amount by which the weekly earnings exceed thirty times the federal minimum hourly wage - see http://www.fair-debt-collection.com/...hments.html#26

[Lesa13]

I am not sure why, though, the gas company would have precedence over someone like the IRS? I have 2 years of taxes that I owe (the year I filed BK and last year) and the IRS told me they couldn't even set up a payment plan at this point because of the automatic stay in place by the BK and that after my BK is done, I could set something up with them.

So I am thinking that I could at least ask for a stay? The payments are also on a house that was foreclosed on in the BK...

I have sent this stuff over to my atty but I've pretty much given up on him - he got his payment up front, like all the attys, and as far as he is concerned, every issue that has come up related to the BK is my problem alone - even when I was acting on his advice.

Just doesn't seem right that I'm going to have an extra $100 taken every month for a gas bill when I am barely making it now (I am on my second move to a cheaper residence and my parents bought me a car when my other one died because they really have me down to the penny in this plan) and other, more priority creditors (it seems to me) aren't coming after me.

I am also wondering even if a judgment was entered against me, wouldn't the creditor have to go through the BK court to get the automatic stay lifted in order to enforce the judgment?

Thanks for your input!!

[lrprn]

I am not sure why, though, the gas company would have precedence over someone like the IRS? I have 2 years of taxes that I owe (the year I filed BK and last year) and the IRS told me they couldn't even set up a payment plan at this point because of the automatic stay in place by the BK and that after my BK is done, I could set something up with them.

It's because some of your taxes are pre-filing and were included on your Ch 13, and the gas company debt came after you filed and isn't included on your Ch 13.

So I am thinking that I could at least ask for a stay? The payments are also on a house that was foreclosed on in the BK...

You can ask, but at this point the gas company and the collections company have no legal reason to compel them to grant a stay. It also doesn't matter that the gas you used after filing was used in a house that was foreclosed. I'm sorry to have to say that since the gas bill in question came after you filed Ch 13, you owe it and have to pay it.

I have sent this stuff over to my atty but I've pretty much given up on him - he got his payment up front, like all the attys, and as far as he is concerned, every issue that has come up related to the BK is my problem alone - even when I was acting on his advice.

Your lawyer is compelled to represent you on all matters related to your Ch13 throughout the months that the plan is in place. If you are this unhappy with your lawyer, you can report him to your state's agency for misrepresentation - go to http://www.nbtanet.org/public/discipline/index.shtml and select or scroll down to your state. Call or write and explain your situation and that your lawyer has stopped responding to your requests for help. Also although it's complex to switch lawyers mid-Ch 13, it is possible to do so.

Just doesn't seem right that I'm going to have an extra $100 taken every month for a gas bill when I am barely making it now (I am on my second move to a cheaper residence and my parents bought me a car when my other one died because they really have me down to the penny in this plan) and other, more priority creditors (it seems to me) aren't coming after me.

When a bill is owed, creditors make the choice when and how to pursue collecting it within (or sometimes outside) the law.

I am also wondering even if a judgment was entered against me, wouldn't the creditor have to go through the BK court to get the automatic stay lifted in order to enforce the judgment?

No in this case they don't because the gas debt came AFTER you filed. It is not a part of your Ch 13 case.

Lesa, I'm so sorry that you are having these difficulties. Be sure to go to court and explain your circumstances if you can't reach an agreement with the gas company or the collections company before then. The judge may be able to help you if your lawyer won't, but you need to be there for that to happen. Hang in there - we are here when you need support or need to vent any time. Keep us posted on what you find out, ok?

[Lesa13]

Thanks for the info but I am hoping you are incorrect . I work in the legal field and while we don't have any BK attys at my place of business, the ones I have talked to all said they feel any jugment filed during an active BK would need to be vacated because it violates the automatic stay - regardless of when the services or goods were actually incurred/bought. Of course, once the BK is done, it's open season.

One attorney also told me he thought the trustee would not take kindly to an extra $100 coming out of my pay that (in theory) if I truly could spare that money, would better be used as part of the plan and distributed to ALL creditors, not just to pay this one particular one. His exact words were "how would secured creditors who are getting 50-75 cents on the dollar feel when they find out a utility company is not only getting 100 cents on the dollar but also getting interest and all in less time than they have to wait for their money?"

This same attorney's suggestion was that if this truly all pans out and god forbid there is a judgment entered that can't be vacated, that I go to the trustee myself and just say hey, are you aware of this and is it kosher with you because if I have to pay an extra $100 a month to this one creditor, then I might need to amend my plan for $100 less in order to function financially on a day to day basis.

We'll see what my attorney does with this - hopefully he will respond! I have had issues before where he just sends me back whatever paperwork I sent him and tells me it's my problem.

Unfortunately, after contacting the bar association (both state and local), I've found that filing a complaint doesn't really "do" anything and this guy has been around a long time churning out the BKs - so he probably could care less if I fired him or complained (probably would be glad! And, of course, working with lawyers day to day, I know that a complaint from the bar association is about as serious to them as a parking ticket.

Looking back, knowing what I know now, I should have gone with a Chapter 7!

Lesa

[SinkingFast]

This same attorney's suggestion was that if this truly all pans out and god forbid there is a judgment entered that can't be vacated, that I go to the trustee myself and just say hey, are you aware of this and is it kosher with you because if I have to pay an extra $100 a month to this one creditor, then I might need to amend my plan for $100 less in order to function financially on a day to day basis.


Lesa

That would be my suggestion before you have a Judgement against you.

You've already sent the info to your attny,............ Hopefully you delivered it in person, or faxed it, or sent it signature required delivery. Be sure and jot down what day you sent the info to your attny.

Give the attny a few days to respond. If he doesn't, call the office. Personally, I wouldn't wait more than a week to 10 days. If you don't get a response from your attny, then contact the Trustee's Office yourself.

Tell the Trustee that you've sent this info to your attny, but your attny has not contacted you regarding this matter. You wanted the Trustee informed so he/she is aware of what is going on in your case.

[Lesa13]

Follow Up To Original Post

Remarkably, I have actually received a response from my attorney in record time concerning this issue....

...and (COMPLETELY SHOCKING) it was a nice letter.

First, he told me that yes, as everyone has said, if it is truly post-petition charges, I am responsible for them and since the debt has been sold, would have to pay to the collection people, not the original gas company. However, he could also not make heads or tails of what they sent. I had paid an $820 deposit originally to the gas company right after my plan was filed (filed in September 2005 and had to pay the gas company $820 by end of October 2005) and that money seems to be sitting with the gas company. Certainly wasn't applied to the final bill (and of course I never got it back from them). So that's one thing I need to look into.

He also stated that this collection attorney has no right to sue me for anything without the BK court lifting the stay and in order to do that, they need to file pleadings with the BK court (which they haven't done or even suggested they would do - what they sent was an unfiled pleading in my local county court and, if I would sign the judgment, they would then file that pleading with the county court, bypassing the BK court altogether - sounds somewhat fishy to me concerning collection practices and their legal practice as a whole). My attorney is actually going to contact the collection attorney to tell them that (a) they need to send us a clear bill so we know what exactly they are wanting and (b) if they intend to sue, they need to get leave from the BK court AS THEY ARE WELL AWARE and not try to bully me into signing a local petition without BK approval and (c) quit contacting me since they were told right up front I was in BK and they know they are not supposed to contact me at all.

His final paragraph to me was - you will probably end up having to pay this out of your pocket at some point so be aware of that.

And the final shocking kicker - "you are doing good work and are half way through your plan. I commend you for keeping up with your payments and making such good progress."

Could have picked me up off the floor! This guy is NOT Mr. Personality so it was kind of nice to have a little "stroke" for all the suffering

Lesa
Missouri