Amended Plan Payment Adjustments

[TooMuchCredit]

My original plan filed in March had say a payment of $500. Now I have stripped my 2nd mortgage and have more to pay in for a new payment of $1300. In July, my attorney will file an amended plan to show this amount. Do I now have to make up the difference for the prior months? I.E. $800 * 4 (March, April, May, and June)? Or do I just start making the new payment? Would that mean the plan would run 62 or 63 months instead of 60 to make up the difference?

[lrprn]

My original plan filed in March had say a payment of $500. Now I have stripped my 2nd mortgage and have more to pay in for a new payment of $1300. In July, my attorney will file an amended plan to show this amount. Do I now have to make up the difference for the prior months? I.E. $800 * 4 (March, April, May, and June)? Or do I just start making the new payment?

When our Ch 13 plan was finally amended to a higher payment after our trustee's two objections were resolved by our bk judge, we had already been paying for 15 months at the lower payment level. In our case, the difference between the old and new payment was calculated to see how much we had to make up for the first 15 months, then that amount was added on top of the additional increase and spread out over the remaining 45 months of our plan.

For example, let's say the original proposed Ch 13 payment was $500/month and the updated confirmed payment after 15 months is now $600/month. Now the trustee takes the $100/month difference x 15 months then amoritizes that out over the remaining life of the plan. In this case it would be $100 x 15 months = $1500, then $1500 divided by 45 remaining months = $33/month. Your new payment becomes $500 + $100 + $33 = $633/month.

You start making the new payment amount the first payment due after your amended plan is confirmed. Make sense? If it doesn't, we'll try again. Like many other things around bks, it can be confusing!

Your local court and trustee may do things differently so be sure to check with your lawyer to see what the process is in your court.

Would that mean the plan would run 62 or 63 months instead of 60 to make up the difference?

Ch 13 plans cannot run longer than 60 months - that's the limit the law places on a Ch 13 plan length. You pay on the plan until all the nonsecured creditors that filed claims are paid in full or you hit 60 months - whichever comes first.

[TooMuchCredit]

Thanks for that info. My attorney has actually never done a strip. (It seems to be fairly uncommon here.) I wonder since I paid my March, April and May payments to the 2nd mortgage that is being stripped if that will just be deducted from the payout to them. Guess I will find out soon enough!