we had our 341 last thursday and were near the end of the order so we got to hear all the others. the trustee was super nice to everyone and just asked a few questions like, " your name, is this your 2007 tax return, how often do you get paid, any creditors present, and thank you and have a nice day. " well, everybody had regular jobs so i'm guessing this guy had something against the self-employed which i am. he asked us the same questions and then proceeded to ask how i got into debt and how come so much. he then asked how was i gonna pay the plan. in our case we have quite a bit of equity so our payments are very high and to get the payment down to where i could afford it we were gonna have a lump sum pay out after about 3 years which was not intended to pay the plan off but just get it in line with the total pay back. anyway, the trustee said that wasn't in good faith and was not feasable and he objected to it. my lawyer said don't worry about it. now we get to go back to court in front of a judge and in my case, if the judge doesn't rule in our favor then i'm screwed as i can barely make this thing work as it is now. has anybody on here had this kind of issue come up?
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It is nothing against the self-employed per se, its just that its harder for the BK system to verify and trust the self-employed because you control the "books" so-to-speak, it is easier for you to hide income and assets. Thus, the trustees scrutinize the self-employed.
If I understand you correctly, you will be making token payments for 3 years and than one large payment at the end, correct? Chapter 13 plans are usually not set-up with a ballon payment so I am not surprised that the trustee is objecting. Where is this "lump sum" going to come from? I wonder if your lawyer has tried this before or if he is trying something novel. Good luck.Last edited by HHM; 08-23-2008, 08:58 AM. -
Originally posted by HHM View Post
i'll be making payments for the full five years. the lump sum will come from my wife getting a job and myself a second one if need be. as a last resort we would refinance to get the lump sum. my lawyer has been really great and she still doesn't think i have anything to worry about and yes, she says that she has done this before.Comment
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We also had a lot of equity in our house when we filed. Our initial payment was $1700 per month; however, as I explained previously in this forum, the company I was working for at the time filed for bankruptcy one month after we filed our Chapter 13; therefore, I had to find another job pronto according to my attorney, which I did but at $6,000 per year less than my former job. At our 341 which took place the day before I started my new job, my attorney and I explained all this to the Trustee (I had to provide paperwork from both jobs as to what was going on and salary), the Trustee instructed the attorney to modify our Plan. What the attorney did for us, due to our equity, was to lower our monthly payment to $500 per month and at month 55 of our 60 month plan, we were to refinance to pay off the balance due on our Plan. At that time, we would have had more than enough equity to pay off the plan. However, that was in a different economy than now - but Plans have been done this way (my attorney stated he has done them previously like that). It is also done only under certain circumstances. As with the OP, he may or may not have enough equity in his house at that time due to this economy and that may be what the issue is here or also due to his self-employed status. If he has equity now and it appears the market is ready for an upturn, he could have enough in 3 years if he is diligent with this whole thing and can prove he would have enough at that time - his attorney seems optimistic.
Yes, plans have been done with "balloon" payments at the end but only under certain circumstances as to their being enough household equity at the end for a refinance._________________________________________
Filed 5 Year Chapter 13: April 2002
Early Buy-Out: April 2006
Discharge: August 2006
"A credit card is a snake in your pocket"Comment
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Originally posted by Flamingo View Post
at present i have almost 3x in equity compared to the lump sum payment itself. 3 years from now i'm sure the value will go up and with me making monthly payments, the equity would increase even more as i pay the balance down. i also had another lawyer suggest a similar payment plan so i'm thinking this is something that goes on all the time. must be my self-employment deal. oh well.........................Comment
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Could be that the housing market is tanking and a lot of people's equity is decreasing rather than increasing... just a thought.Filed CH 13 September 17, 2007
Plan Modified July 8, 2009 from $1100/month to $400/month due to change in income, finally discharged in July of 2013!Comment
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