Amended Chapter 13 Plan

[paula61]

My husband and I filed a Chapter 13 plan in August 2005. We had an income of $120,000 per year and was placed in a 3 year plan with a monthly payment of $2100 for 100% payback. In February, I went on disability for severe back and knee arthritis. Have had two knee replacements and my company let me go in June because I could not come back to work. My husband retired in July and will not receive his Social Security until September 26. He will receive $900 per month. My disability is currently 60% of what I was making before. We have missed 3 payments on our Chapter 13. Our current monthly expenses are $4421. We have asked for our plan to be amended to extend our payments out to 5 years instead of the original 3 years, which should still allow us to complete the plan 100%. Prior to missing the payments, we had paid off all the secured claims. We have approximately $21000 in unsecured debt, part of which is unsecured portion or our two cars. We surrendered our house at the time of filing, but to our knowledge the mortgage company has not foreclosed yet. When we filed, we filed under the old bankruptcy law. Our median income is still above the state level. What is the chance the trustee will approve our amended plan for five years? What if we can't make up the back payments? Can they count my husband's social security as income? If we allow the plan to be dismissed, can the cars be repossessed or can we reaffirm the auto loan debt? Any advise would be helpful.

[lrprn]

What is the chance the trustee will approve our amended plan for five years? What if we can't make up the back payments? Can they count my husband's social security as income? If we allow the plan to be dismissed, can the cars be repossessed or can we reaffirm the auto loan debt? Any advise would be helpful.

You have quite a difficult mess here, paula61 - so sorry to hear about all your troubles .

Some questions I need to ask first - did you use a lawyer when you filed Ch 13? When did your amended plan go to your trustee? Have you checked PACER to see the status of your Ch 13 case?

[paula61]

Amended Chapter 13 Plan

Yes, we used a lawyer. I have asked the lawyer to send the amended plan to the trustee but I am getting the vibe from the lawyer that it might not be approved since our original plan was for 3 years, not 5 years.

[doglover]

Gosh....... I don't know but did want to say that I get VA disability and they used/considered that as income. They even included his education benefits from the military as income since he gets actual money every month. Best of luck to you and keep us posted.

[tofargone]

If your secured is paid off and your income is now below the median you may be able to convert to a 7. I don't know the details, but you may want to ask your lawyer.

[paula61]

Amended Chapter 13 Plan

Hi. Thanks for the feedback. Our income, with disability and social security, is above the state median, therefore we can't file Chapter 7. We have asked our lawyer to amend our plan and ask the court if we can go to a five year vs 3 year repayment plan, which will lower our payments to something we can live with. Since we have been in our current plan for 2 years, I guess my question is how likely will the trustee be, since our income has decreased by at least 40%, to grant approval for a 5 year plan? Will he require us to make up the back payments, which we can't do, or can they be factored into future payments. We could actually pay the whole thing off in 51 months as opposed to 60.

[lrprn]

how likely will the trustee be, since our income has decreased by at least 40%, to grant approval for a 5 year plan?

Depends on your trustee. Luckily most understand that a Ch 13 plan payment based on an income that was 40% higher can't be maintained going forward and will take a fair look at the proposed amended plan.

Will he require us to make up the back payments, which we can't do, or can they be factored into future payments.

Typically most Ch 13 trustees will take the extra that's owed on the back payments and spread them out over the remaining life of your plan. Ask your lawyer how your trustee has handled situations like yours before.