The trustee took my tax return and now I'm confused...

[aces67]

I expected the trustee to take the refund I'm just confused as to what he's going to do with it. We're in a 60 month Ch 13 that was filed on March of 2007.

My lawyer said that the trustee would take our refund of $4000 and apply it to the $9000 we owed leaving us with $5000 left to pay. However the trustee sent a letter saying that he ADDED the $4000 to the plan base leaving our base at $13000 and that we should continue to make all monthly payments because any reduction in length of our plan won't be determined until the last few months of our plan.

Okay can anyone explain this?? Does this really mean that he's holding on to the money until he sees if anymore claims are filed and if not then it can be applied to what we owe?? or does this mean we just gave up an extra $4000 and it's not going to shorten our plan at all??


Thanks!
Amanda

[aa06a47]

What % payback are you?

[HHM]

You filed in March 07, when was your planned confirmed?

In any event, what was your percent to unsecured...if you were NOT 100% from the start, then the extra funds from tax refunds, etc, go to increasing the amount paid to unsecured creditors, if you are paying 100%, the amount simply gets applied and your plan length is shortened.

[aces67]

I have no idea. How do I know what percent I'm at??

Thanks!
AManda

[HHM]

I have no idea. How do I know what percent I'm at??

Thanks!
AManda

Umm, simple arithmetic, perhaps?

Monthly payment x the number of months

then divide that number by the total of all claims and multiply by 100.

For example, if you pay $500 per month for 60 months, your TOTAL payment is $30,000. Let's subtract 5% for trustee fee, and $2,000 for your attorney, that leaves you with $26,500 for your unsecured creditors, If you have a total of $50,000 of unsecured claims, you would be paying back 53%

[qwertysue]

It will also be at the top part of your confirmed plan if you have the paperwork handy or access to pacer.

[aces67]

Okay so by doing the math I came up with 63%. My claims total 15231.19 and I'm scheduled to pay back only 9641.80. Man If I had known we'd be getting good tax refunds I wouldn't have filed to begin with. Everyone one of our creditors filed claims so we won't really be getting much of a break.

[HHM]

Okay so by doing the math I came up with 63%. My claims total 15231.19 and I'm scheduled to pay back only 9641.80. Man If I had known we'd be getting good tax refunds I wouldn't have filed to begin with. Everyone one of our creditors filed claims so we won't really be getting much of a break.

So basically, regardless of what your actual % is, you are less than 100%, so what will happen, apparently, is the trustee is going to take your tax refunds each year of your plan and apply it to your unsecured creditors, thus, upping your overall percentage paid to unsecured creditors.

[MajorMike]

wow Aces, why did you file with so little to pay back????

[aces67]

Because we had our second baby, I quit working and dh had been promised a raise and didn't get it. His company was also in the middle of a buyout and we couldn't make our bills. So we filed and then the buy out went through, dh got a raise and then I guess my not working dropped us into a lower tax bracket so we've gotten huge refunds the past 2years. we used to owe the IRS every year. We had no idea our financial situation would look this good.