Hey Woeisme...

[Buckeye1974]

Sorry to call you out, but I wanted your advice on something. I am in your district (So. Ohio) and have the same trustee as you. I wanted to ask a question about his views on tax returns and the stimulus rebate.

Do you know if he will want both of those? We are getting $2100 for the rebate but around $10K for our refund since my husband's business was a total loss for us. I don't care if they take the $10K to pay stuff off but my husband and I could really use the $2100.

We need a lawn mower. Our yard is an acre and a half and we can't afford to pay anyone to mow it anymore. LOL. We wanted to get a cheap riding mower. Would they think that is a good reason? Upkeep of your house?

Thanks for any and all help.

[helpless]

I am also in Southern District of Ohio, and we have gotten to keep our tax returns. Each year, they get held up by the IRS, it is happening again this year, but we eventually get them. I think that they get held up because we included IRS in our repayment, they have been paid all of the priority and have less than $20 left on unsecured, so I will sit here and wait again!!! Don't know about the tax stimulus.

[Buckeye1974]

Helpless,

We haven't included any back taxes so I wonder if our will be held up. Hmmm.....

Thanks for your answer. Our 341 is in May. I am scared to death.

How painful was yours?

[helpless]

Wasn't painful at all. Didn't have any objections. I am old law though. It has been 3 years as of this month and believe it or not, time does go by. Trustee seems fair. We haven't really had any interaction with him, just had to call the office a few times about whether or not they received a payment. I am hoping that we get our stimulus back because I would like to be able to pay off my 13 with it. Good Luck. You will get through it.

[erinb1975]

We are also in So. Ohio (Columbus). Trustee also seems fair to me, got to keep our tax refund - 1600. They don't ask for yearly tax returns either. Our 341 was in Feb. lasted all of 5 minutes. At our orientation we were told that our district is in the top 3 in the country for percentage of people who make it through. I think that has alot to do with how "debtor" friendly our trustee is. He tells you straight out that they want you to succeed.

Haven't heard anything about the rebate, although I am assuming we are going to get to keep it - as we do with refunds.

Good Luck!

[Buckeye1974]

Thanks Erinb1975.

I have been very worried about how friendly our trustee is. I have heard so many horror stories about trustees making it miserable for some people. I was saddened when I saw someone post on here that alot of folks don't make it through the 5 year "sentence". Glad to know our district is high for people who do make it. You made me feel much better!

[helpless]

I have four payments left and I haven't had any problems with the trustee. It really has been smooth sailing as far as that was concerned. The real problems are when the car breaks down, kids have to go to doctors unexpectedly and dental work. Somehow you manage, at times I didn't know how, but somehow we have pulled through. You will do fine. Good luck.

[woeisme]

Sorry, busy day yesterday so I didn't log on and just saw the post. My trustee let us keep a $3500 federal tax return this year and $500 in state refund, and never asked anything on the stimulus, so I think we can keep that too. When I asked my lawyer about tax returns before we filed, she asked how much we expected to get back and I told her ~3K and she said not to worry about it as long as it was under $6500, so I don't know if this is the magic number and he takes refunds over that amount or not, but she made it sound like even if he did (like in your case with 10K) that he'd only take the amount over the $6500, not the entire return. The only thing he said about our tax returns is that we couldn't have them electronic deposit, had to get a paper check, but we still got our refund quick, less than 2 weeks from when we filed this year.

I think the Southern District of Ohio trustee is really good, he allowed our plan to be really "do-able". We are paying $1100 a month (proposed 65% payback although since some creditors didn't file, it will be closer to 75% payback to unsecured) so it's not like we're getting off without paying much to our creditors, but it's nowhere near the nightmare scenarios I keep seeing on this board. I think he's actually really smart to allow some flexibility in CH 13 plans, I bet he gets a lot more $ for the creditors in the long run because he allows people to pay what they can really afford, not bleeding them dry until they drop out of the plan. He didn't want to hear about raises or changes of income unless it was greater than 10% in a year (my lawyer said I could work overtime if I wanted to and he wouldn't come after it the way some do) and allowing us to keep the tax return was huge in my book, it has allowed us to have emergency savings, something we never had pre-BK.

[Buckeye1974]

Woe,
Thanks for the update. I had my refund done electronically. I didn't know he would want a paper check because our 341 isn't until May 20th. Should I just keep the money parked in our savings account until we go to court? That way if he asks for it, I can give it to him? And do I volunteer that info to him? I think we should tell him. I don't want to hide anything.

How do you find out what percentage payback you are? I think our lawyer said 100% payback but then he mentioned paying 10 cents on the dollar. Huh?

[lrprn]

How do you find out what percentage payback you are? I think our lawyer said 100% payback but then he mentioned paying 10 cents on the dollar. Huh?

Although the payback % typically refers to only your unsecured creditors, you can pay back 100% to secured creditors such as your car lender and still pay back only 10% to your unsecured creditors.

To explain how the unsecured creditor % is calculated in Ch 13, you propose an intial payback % when you file your plan. That % is calculated by figuring out the percentage of your total unsecured debt that will be paid by the end of your plan.

After the deadline passes for creditors file claims to be paid, if not all the creditors file claims, then the % is adjusted upwards to reflect what percentage of your monthly payment will be paid to only those creditors who filed claims.

If your plan proposes a 100% payback to unsecured creditors to start with, then no matter how many creditors file claims, your payback will still be 100%

[Buckeye1974]

I must be slow. I am still fuzzy on this.

We are keeping our house and cramming down 1 car. We are surrendering one car and a semi. I know we will be paying arrears on our 1st and 2nd mortgage. Those accounts are our secured items.

Everything else is unsecured, correct? Our payment is $2150 for 5 years. (Includes both mortgages.) If all my creditors don't file a claim, does that mean the ones who do will simply receive more money?

I am sorry. Newbie doesn't even begin to describe me. This whole situation is making my head swim. And the bad thing is I am a pretty smart person! LOL!

[lrprn]

Everything else is unsecured, correct?

"Unsecured credit is not backed by collateral, but instead only by the personal integrity of the individual borrower." (http://www.low-rate-credit.com/finan...y-of-terms.htm) If the rest of your debt fits this definiton, then yes, everything else is unsecured.

Our payment is $2150 for 5 years. (Includes both mortgages.)

Just curious....why did you choose to have your trustee make your house payments instead of making them directly to the lender yourselves?

If all my creditors don't file a claim, does that mean the ones who do will simply receive more money?

That's right. Cool beans to be able to wipe out everything you owed a lender too lazy to file a claim, huh? Yes, the others get more, but unless you're in a 100% payback plan, the ones that do file claims will still get less than what you originally owed them.

I am sorry. Newbie doesn't even begin to describe me. This whole situation is making my head swim. And the bad thing is I am a pretty smart person! LOL!

Ch 13 is very complex and hard to understand. Throw in all the differences in how districts, local courts, and even individual Ch 13 trustees interpret the badly written current bk law and it REALLY gets confusing! We all feel pretty clueless at the start.

Here's some excellent Ch 13 websites that do a good job of explaning how Ch 13 works - well worth your time to take a look at them:

http://moranlaw.net/13workings.htm#Chapter%2013%20practice

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html

http://www.abanet.org/publiced/practical/bankruptcy13_whatis.html

Hope this helps!

[Buckeye1974]

Thanks so much for the info. I assume he included the mortgages because we were 2 months behind them and was trying to make it simple.

Should I have "demanded" to pay them outside of the plan? Or beg? Ha ha.

All the weblinks you have provided were great. I have been "trolling" for awhile here and have used alot of the advice provided here. Hopefully after our 341, I will have my own good news to share.

Many thanks to eveyone!

[lrprn]

I assume he included the mortgages because we were 2 months behind them and was trying to make it simple. Should I have "demanded" to pay them outside of the plan? Or beg? Ha ha.

Actually yes, it probably would have been better for you pay the primary mortgage payments yourselves. Here's why...

Your trustee is going to take a certain % (between 2.8-10% depending on your bk district) off your payment every month for an administrative fee. Since your plan payment includes not only the arrears (which had to be paid by your trustee) but also your primary mortgage payments, your trustee is now getting a % of your mortgage payments in addition to the arrears payments he/she is making on your behalf.

That's why unless you are in a rare local court where the trustee requires that these payments be paid by the trustee, it's better to pay primary mortgage payments yourselves. It saves you money in the long run.

However, perhaps there are issues in your situation that make it best to set things up the way your lawyer did. At least this way having your trustee make the payments for you means they will never be late!

[woeisme]

The Columbus trustee only charges a 2.7% fee, so at least as far as the fees go on the mortgage payments, it will be relatively small. (Did I mention I really like our trustee's policies???)

I don't think it will be a problem with the direct deposit of the refund, since I didn't find out about it being paper check only until my 341 either, it was in a handbook the trustee made up with his policies in it. I would ask your lawyer if you need to do anything about it, but I bet you'll be able to keep most if not all of it. I didn't need to send my check to the trustee at all, it went straight from the IRS to me, just for some reason the IRS raises a red flag on the account if it's direct deposited, but that probably doesn't apply to you since you haven't been confirmed yet.