Has anyone lost their benefits due to plan payment?

[shadowb]

I was wondering if this has happened to anybody else. I am part-time and carry the benefits for our family (this includes health, dental, my 401K, plus I have short-term disability and a cancer and specified diseases rider). When we were in the process of filing, our attorney mentioned that the court PREFERS payroll deduction, but it really didn't matter. I at that point made it quite clear that I had to have enough money in my check to cover my deductions. So, he structured our payment where X came from my check and Y from my husband's. About a month later, the trustee decides in her infamous wisdom to increase the money to come out of my account. I panicked but was okay because with my payroll deductions coming out I was left with $30.00. About two weeks ago she (the trustee) sent a letter out to my employer and me stating that she wanted our max payment to come out of my check %100. Again, I am part-time, so this amount was quite excessive. When she sent that, my employer complied and my benefits didn't get paid. Apparently the legal obligation comes out first and then the health benefits, on down. My 401K, my disability policy and my health rider didn't get covered. My employer says this has to be changed or I will lose those benefits. This amount is only $37 and some change. When I got my checkstub and saw this (now note I previously contacted my attorney when that last letter went out with my concern), I was pissed. I contacted my attorney and she said that it shouldn't have happened. Well, I told her I would gladly fax her the copy. I did this and hadn't heard back. I got e-mail from her partner advising us that basically the lion's share was now coming from my check and he is now advising that we self pay. My employer won't even offer that option. Now I am waiting to hear back from my attorney, as I e-mailed the attorney back stating that apparently this was not an option and that couldn't we get that $37 and some change back to cover the benefits. This whole Chapter 13 is a fiasco. I wish the attorney would have provided us with more information. He never indicated I would have to give up my benefits to pay for this. Has anybody had this happen to them and does this sound right, i.e. I just can't see a judge allowing this to happen?

[helpless]

I don't know if this will help our not, in our state payment is preferred by garnishment, but since husband worked for small company, our attorney got an order signed by the judge that we could self pay and not have the garnishment, again the order was signed by the judge, the trustee had nothing to do with this. Good luck.

[imbroke2]

Since you have the benefits and are part time, why didn't you just designate that the payments come from your husbands check? I also am somewhat part-time and also carry the benefits for the family, but I have enough to also have the Chapter 13 payments come out of my check (because originally my husband was unemployed at the time of the filing). What about having the entire thing changed to being withdrawn directly from your checking or savings as opposed to from your paycheck? Just some thoughts.

[Flamingo]

When you got that letter from your Trustee that was sent to you and your employer that they were going to take 100% out of your check, you should have immediately contacted your attorney to intervene since you should have known that it would lessen your pay to the point where any funds withheld for any of your benefits would be cut off. Your employer should have also seen that and advised you there would not be enough to cover your benefits. Since there was an error here due to either lack of knowledge of company policy and lack of communication, your attorney should be able to get this fixed for you and if you need to either have the amount withheld from your husband's payroll or get permission to send the payment in directly each month via certified check or however the Trustee will accept payment.

[shadowb]

Thanks all for the responses. To take you back to our filing day, we provided our attorney with copies of six months of paystubs. I made it quite clear I was part-time with my bring home running around $300 every two weeks. I made it quite clear to him that the stipulation my employer has regarding benefits is that enough has to be in the check to cover the benefits. The paperwork we filed designed $150 per pay or $300 per month from me and the balance from my husband. We filled out the payroll deduction from both of us. My employer began the garnishment immediately. My husband's didn't so we did self pay on that amount. Of note we are current in our payments. As a matter of fact the deduction never occurred on my husband's end. He even filled out a second form to start this and to this date still nothing. So, he has been self-paying ever since. About a month into the first go round of $150 deduction from me, the trustee, without forewarning from my attorney, nor contacting us sent a notice saying she immediately wanted $500 per month to come from my checks (note this is while my husband is still self-paying that difference). When I received that notice, I contacted my attorney, who basically said that because my husband is self-paying and the trustee PREFERS payroll deduction, the trustee decided to increase the amount coming from my check (if you do the math this allows $50 left as bring home per check). This did still alot for my benefit deductions (though not much wiggle room). I made it quite clear to my attorney that this did not allow me to miss any days due to illness or whatever (I am paid by production when I work and hourly when I don't, production is more, hourly is less). She did nothing and basically told me we would have to live with this and adjust. When the last increase came through last week, again with no heads up from my attorney and no contact from the trustee, it was for $2100 a month coming from my check totally. When I checked my paystub on line, I noted that at this point half of my benefits didn't get paid. I contacted my attorneys. Their response was could we self pay my insurance??? According to my employer, because of no pay, my policies will be cancelled. The girl in payroll that handles this was upset herself when she got the original letter and called the trustee herself, thinking it was a gross mistake. The trustee's office told the girl in payroll to indeed take everything. She said she was shocked. I am finding out now that the trustee's office is under the impression benefits gets paid first. My employer is suggesting the trustee's drop the excessive amount of $2100 back to $500. They are saying that the hospital computer that does the deductions is having a hard time with that amount because 1) it is more than what I make and more than I would ever make. My attorney says the trustee wants to take advantage of my possibly working extra hours and getting future raises. As my employer said, I can work 40 hours per pay and get raises and not make that ever. Can anybody advise on whether a 401K deduction is protected and provide any advice on how to proceed with this. My concerns regarding this mess has seemed to fall on deaf ears when it comes to my attorneys.

[shadowb]

Oh Flamingo, I got the letter from the trustee on a Thursday and believe it or not, that Friday (which was when payroll was done/paychecks were printed), the $2100 change took effect because the letter said IMMEDIATELY. So, there was literally no time. My mail doesn't arrive till 4:00. We were gone for the day (it was spring break week here) so I opened the mail that night. I tried contacting my attorney Friday (at that point I had checked my paystub and the $2100 change had took place, leaving half benefits not paid and my check amount was zero). My attorney returned my call nonchalantly that afternoon. She said that it should not have happened like that. I told her it did happen and it has got to be changed. That was when she went on to give me this story of how she herself has no insurance and how maybe my husband and I can look at other insurance policies and self pay, etc., etc., and then she said that this arises because of the payroll deduction issue and I stated to her that my husband filled out two of those forms and submitted it to the trustee, etc., etc. Honestly I am getting more and more unhappy with our attorneys and just don't see them working to help us through this. Well, to me I clearly remember them saying it doesn't matter where the money comes from as long as it is paid.

[shadowb]

Flamingo, also when I talked to my employer this morning she told me she assumed I was aware of the $2100 change, which was why she never contacted me. SHe said she assumed that those were negotiated prior to her receipt of the letter. I explained to her this amount was more of a surprise to us than it probably was to her. My first told me she never received a copy and then when I told her it said she was a cc on it, she admitted it was probably on her desk, she was busy doing this and that, and never read it.

[helpless]

What state are you in shadowb? This just doesn't seem right or fair.

[shadowb]

Imbroke, when we were doing the paperwork to designate where the payments would come from, we did designate the lion's share to come from my husband since I carry the benefits and am part-time. I thought things were set and we were happy that my benefits wouldn't be affected. I just don't understand what the trustee's thoughts are. She keeps increasing the payments. Our attorneys aren't impressing us so far. My dilemma is I am afraid of doing the wrong thing. I didn't know if I need to just go through my attorney (they should have been more aggressive in putting a stop to this initially and haven't), or should I just call the trustee's office. I haven't quite figured out if the trustee is approachable, i.e. would she be willing to discuss this with us. Or, do we request going to a judge. Any thoughts on this would be great!

[shadowb]

Helpless, I am in Louisiana. It doesn't seem right or fair either. We went into this think completely blindly. We didn't do any research on this issue. So, I have no clue what is right and what is fair. We think our plan payment is reasonable but what we don't like is what they are doing to my checks which are affecting my benefits. The whole frustrating is on the filing date I voiced this concern and then every time after that when we got a payroll increase for me, I contacted my attorney to no avail. Is there a way that I can research this issue so I can be more sure of what is right and fair regarding this.

[helpless]

I have had to call the trustee's office on occasion to ask a few questions. The case worker in charge of my case was very approachable. I would call, what would it hurt at this point if your lawyer is of no help? No one should have to loose benefits. How would that be helping either you or the creditors that are receiving a % through your 13? Without insurance, you wouldn't be able to keep up that payment. This is unfair. Good luck.

[shadowb]

I looked up Louisiana State Bankruptcy Exemptions. It says the following "75% of disposable earnings for any week, but in no case shall this exemption be less than an amount in disposable earnings which is equal to thirty times the federal minimum hourly wage in effect at the time of the earnings are payable or a multiple or fraction thereof according to whether the employee's pay period is greater or less than one week". If anybody can help with the English translation, thanks! It also states that assignment of benefits are exempt from levy and the right of any person to receive disability benefits is exempt and the right of a person to a retirement allowance is exempt.

[shadowb]

So, do you think helpless, that since my attorney has had time to head this off and hasn't, I should contact them or should I give my employer a chance. My employer agreed to call back and explain to the trustee the system in which things are deducted and how it is set by a computer. She is going to recommend that they go back and change that $2100 to the amount originally set since the computer won't adjust to taking my benefits first. She said (employer) that the real problem is this amount because it exceeds what I make. At this point again my checks are 0 (zero). My employer even suggested that she thought legally they had to leave me a certain percentage.

[helpless]

Boy, I feel for you. See what your employer finds out, meanwhile, I would be finding out whether or not you could ask the judge for an order for you to pay the trustee directly. That would eliminate your benefits problem. Of course, you would need your attorneys help with this order. If I was you, I would park my bottom in his/her office until I get a face to face meeting. Once again, good luck.

[shadowb]

Thanks. I am going to contact my attorney ASAP. I just got off the phone with my employer. After doing some research, they have discovered that the bankruptcy laws for my state say that if there were benefits already in place, if the amount is not available in the check, then the trustee HAS to make the premium payments for me OR the trustee has to decrease my plan payment to allow for me to self pay those items. The employer would prefer making the payment to avoid me having to drive the hour in to deliver the payments. I am not sure if mailing the payment was an option. They also discovered that my 401K contributions are exempt also. So, after doing their homework and still being upset about the $2100 to come from my check when I don't even make that per pay period nor ever will, my employer called the trustee and talked to her assistant. My employer gave the assistant the scenario of how the computer is set up and how they could not make a change for one person, and then they gave the recommendations as outlined (i.e. decrease the amount to come out of my check, decrease my personal payment to allow for me to self pay, or they, the trustee pay everything for me). The trustee is supposed to contact my employer back with their decision. My employer told me that I needed to know that legally the trustee has to do something to keep my policies and benefits intact. I am in the meanwhile going to find out about asking a judge for an order to pay the trustee directly.

Thanks for all your advice and cross those fingers and toes for me! I hate that this whole fiasco could have been eliminated had my attorneys been more aggressive when the first increase happened.