When do trustees start making payments to creditors?

[woeisme]

Just curious, I know it has no effect on me or my plan, but was wondering when other CH 13 filers started seeing dispersments to their creditors. I have been in my plan since September 07, have made 8 payments with payment #9 coming up in two weeks, and my trustee hasn't dispersed a penny to my creditors yet. Well, not exactly true, he paid my lawyer and his own % fee based on what he gave the lawyer, but that was in month 3 and now it's almost 6 months later and he hasn't distributed anything since. All my creditors other than the lawyer fees were unsecured (medical and credit cards) so maybe since they are all low priority debts that is why he is so slow, but right now he is sitting on $6300 and will have another $1100 payment in two weeks, so you'd think he'd at least want his % on that amount of money, lol. So I was just wondering if other trustees have sat on money for more than 6 months.

[magyar123]

Don't worry about - just keep on making your payments timely. The trustee will pay the creditors whenever he/she feels like it.
He/she might put all those payments in a court account that draws interest, and pay out the funds to the creditors at the completion of the plan.
Some real crooked trustees might even put the funds in their own personal accounts drawing interest, and pay the creditors at the completion of the plan.

[helpless]

Woeisme, if I remember correctly, we have the same trustee. My 13 still owes the IRS $15.00 (unsecured) for the last few months and I finally figured out that it will be paid when all the other unsecureds have been paid the same % amount. His new site shows the % paid to each creditor.

[woeisme]

Thanks helpless and magyar123. Actually the trustee hasn't paid anything to unsecured at all yet, and that's the only debts I have other than the lawyer fees! So I was just curious, like I said, I know it has no effect on me, but seemed weird that he's just sitting on all the money, but I guess if it's collecting interest maybe that's how he's able to charge such low percentage fees (2.7%) on the payments, lol!

[lrprn]

Actually the trustee hasn't paid anything to unsecured at all yet, and that's the only debts I have other than the lawyer fees! So I was just curious, like I said, I know it has no effect on me, but seemed weird that he's just sitting on all the money, but I guess if it's collecting interest maybe that's how he's able to charge such low percentage fees (2.7%) on the payments, lol!

The bk law does set a very specific order that your trustee needs to make the disbursements.

First thing that comes off the top of every payment is the trustee's administrative fee.

Next comes paying off your lawyer in full along with making any required and secured debt payments (child support, auto payments, home mortgage arrears, etc).

Next any priority debts (owed IRS taxes, etc) are paid in full.

Last the lowly non-secured creditors get their payback % bite of the pie monthly until they are paid in full or your plan ends, whichever comes first.

As you said, there's nothing that will affect you in this situation - just wait your trustee out. He/she will make the disbursements when they are ready. There's nothing any of the creditors can do to speed up the process either.

Your sole responsibility is to make sure your payments are being made on time and the payments are documented as received by the trustee - that's it. Goofy, I know....but that's the way of Ch 13

[MajorMike]

Hey Irprn,
When they make my car payment through the plan, do they keep paying til it's paid off so my car is done in say 2 1/2 years instead of 5, or how does that work?

[lrprn]

Hey Irprn,
When they make my car payment through the plan, do they keep paying til it's paid off so my car is done in say 2 1/2 years instead of 5, or how does that work?

Depends on how your payments are set up in your plan. If your car payments are being paid by your trustee because your lawyer stretched out the payments over the entire five years to keep your monthly payments even through to the end (typical), then you'll finish your plan with your cars paid off but not until your plan is successfully finished.

It is possible if you have a car in your plan that didn't have much owed on the loan when you filed, it can pay off before your plan ends. In that case, you should get your title from the lender once the trustee makes the last payment.

[helpless]

We had a car paid off during our 13. Car was paid before any unsecured creditors. We did not get the title, the trustee received it and we will get it once we are discharged. I know that this can vary from district to district. I guess he keeps the title because it is an asset. Looked on 13network this morning and 2.25 payments to go!!