"Can I get out"

[Flamingo]

I have been in a chapter 13 for 2 years now and I have 3 years left on my payment plan. The original plan was to pay back $50 K that I transferred from a trust and payed my Dad back with. Other than that at the time I qualified for a chapter 7. The Lawyer's reasoning for the Chap 13 was he thought that they may go after my Father for the $50k that I transferred to him. My father has since passed away and I am still paying 755.00 per month and it is killing my wife and I. Unfortunately I make close to $200k per year so now I do not qualify for chapter 7. Any thoughts out there?

After reading all these postings and replies, and not knowing what encompassed your original Chapter 13 filing (what other creditors are in the Plan - nothing is indicated about them, just that your original plan was to pay back $50,000 to your father's estate). After the filing, it appears you prospered income-wise - during a Chapter 13, that increase in funds needs to be reported to your attorney and trustee - was that done? Not knowing your original plan and other creditors, if any listed, you can probably investigate buying out of your Plan but it would be at 100% and not at the percentage given to you at the time of confirmation and with all interest and fees as mentioned by another poster. The trustee will be very interested to know where the funds were obtained for this buy out three years prior to the end of your plan and you will probably have to come clean with all the recent increase in income and also how you were able to fork out $35,000 for a recent wedding while in an active Chapter 13.

If you have contacted your attorney, your attorney should have advised you as to all this. Something doesn't add up here and either you are not explaining everything fully or trying to hide things to get around them. If your situation is actual, something just does not make sense and that is why you received several questionable replies.

[momofthree]

I would die to have a 200K income for a family of 4! We're at about 65K and have a $600 payment for 60 months.. *sighs*

^^^HUGE ditto. We could retire at the end of our ch.13 if we had that kind of income! And we're only in our 30s! lol.

[Pandora]

Hiya HHM

Okay - that makes sense and I understand that part (pref. payment) - but just reading what was posted makes it seem a bit off in some aspects as there is info missing obviously . I know with our plan and trustee - we arent required to hand over tax returns or any pay increases even though we're not in a 100% plan. I figured that if a trustee is requiring a person to file a Ch. 13 vs. a 7 due to preferential payment, then it would be plausible that the trustee would demand any pay increases over a certain percent also be paid into the plan. Having your income quadruple 2 years from filing BK while being under the median at the time of filing - seems like a huge red flag to me from a trustee's standpoint, especially if making a preferential payment caused the 13 to begin with.

Maybe I'm just looking at it differently.... I dont know....

At any rate, I hope the OP figures out what must be done and budgets accordingly. I would die to have a 200K income for a family of 4! We're at about 65K and have a $600 payment for 60 months.. *sighs*

[HHM]

ok - however having to pay back 50K on a 40K income doesnt make much sense - why would it be required to be in a Ch. 13? What reason was the 13 filed? He states only due to the loan he repaid his father, nothing else. He'd of qualified for a 7 either through the median or negative DMI - so why push the 13? $755 x 60 mos isnt 50K, its $45300 - so again, something isnt adding up - it would've had to been his father was the ONLY secured creditor - no other secured/priority or unsecureds at that payment and the trustee fees and any legal fees would also have to be included. If thats his base plan - which is a minimum to pay in, then he's never been in a 100% plan and cannot buy out unless all debts are paid 100% - secured, priority and unsecured.

I'm in a min plan base also - but am not at 100% if you do the math (2nd mortg. to be stripped) - everything at the end of our plan that remains will be written off and discharged.

There's info missing in the OP's posts...

The issue apparently seems to be that he paid back his father $50K, (I guess the next question is, how did that happen, did you pay him in a lump sum, a few payments, etc). Assuming the the transaction would have been considered a "preference" if the debtor filed BK-7, the trustee could sue the father to get that $50K. So instead of going down that road, the debtor decided to file chapter 13 to reconcile the value of that preference and pay it over time in a chapter 13. However, I do agree with others, there is something way off on the budget if you cannot afford the $755 income. I realize that $200K, after all withholding and deductions isn't a huge amount of money, but it is very sufficient, so something else is eating up the budget that probably shouldn't be.

However, without a better picture of the overall debt situation, all we can do is speculate as to the best options.

[Pandora]

Exactly! The $50k was the minimum he had to pay in. I'm guessing on a $40k income, he wouldn't have paid back anywhere near that amount if it weren't for the preferential payment. He clearly had more debt than that though, which was his purpose for filing.

ok - however having to pay back 50K on a 40K income doesnt make much sense - why would it be required to be in a Ch. 13 - when median for a family of 4 is 64K as stated above? What reason was the 13 filed? He states only due to the loan he repaid his father, nothing else. He'd of qualified for a 7 either through the median or negative DMI - so why push the 13? $755 x 60 mos isnt 50K, its $45300 - so again, something isnt adding up - it would've had to been his father was the ONLY secured creditor - no other secured/priority or unsecureds at that payment and the trustee fees and any legal fees would also have to be included. If thats his base plan - which is a minimum to pay in, then he's never been in a 100% plan and cannot buy out unless all debts are paid 100% - secured, priority and unsecured.

I'm in a min plan base also - but am not at 100% if you do the math (2nd mortg. to be stripped) - everything at the end of our plan that remains will be written off and discharged.

There's info missing in the OP's posts...

[Maximo]

Try making 110k and paying 3300 a month! HA I would love a payment of 755....jeez

[momofthree]

He made a preferance payment to his father, so filed a 13 instead of a 7 so he could pay the preferance payment back to secured creditors instead of risking the trustee going after his father. I don't think he meant that the loan from his father was the only reason he filed BK.

Exactly! The $50k was the minimum he had to pay in. I'm guessing on a $40k income, he wouldn't have paid back anywhere near that amount if it weren't for the preferential payment. He clearly had more debt than that though, which was his purpose for filing.

[LadyInTheRed]

He made a preferance payment to his father, so filed a 13 instead of a 7 so he could pay the preferance payment back to secured creditors instead of risking the trustee going after his father. I don't think he meant that the loan from his father was the only reason he filed BK.

[HHM]

I agree, we need more info, something is not adding up, what was the reason for needing to file chapter 13 in the first place?

[Pandora]

Look I simply was looking for a loop hole based on the fact that the reason I am in this plan was because of $50 K I transferred from my bank account to my dads (from a trust fund) before I filed.

I also had to buy an SUV which I bought used and paid Cash for and I paid for a large wedding on the beach this year that set me back 35 k.

Oh and BTW I have lived a very nice lifestyle all Cash for the last 2 years. Also I feel my Lawyer mis advised me when I originally filed and treated me like a complete jerk! I have spoken to a current friend who is a BK attorney and he told me if I waited 6 more months from the date I filed I could've went 7 and been done!

....and have increased my income from 40k when I filed to 200K in two years

Okay, so reading through all your posts, something isnt meshing for some reason. You said you filed because of $50K you paid back to your father 2 years ago - you dont mention any other debts other than your plan was based on that 50K. So you filed CH 13 BK due to the one fact of having to pay your father back?

If you've gone from 40K to 200K in 2 years since filing, and are in a Ch. 13 5 year plan, have paid cash for vehicles, and a $35K wedding - then why on earth havent you paid your plan in full since you state you're at 100% payback? You do have the option to dismiss your case or pay it off early. You wouldnt qualify for a Ch. 7

Sorry if I sound cynical but your story isnt making any sense whatsoever..... you're stating you only filed BK because of a payment to your father.... not adding up to me.....

[forgotten]

and I paid for a large wedding on the beach this year that set me back 35 k..

And you realize the wedding was 46 months worth of payments? The idea of a Chapter 13 is that you are not suppose to have ANY disposible income left over each month. In the grand scheme of things you have gotten off way way easier than 99.9% of other chapter filers. My point just being, be happy with what you got and not focus on having to make that payment.

[momofthree]

Josh, it sounds like you need to really sit down and realistically create a budget to stick to. On your income, a $2k housing payment is reasonable. Our income is around $65k a year, family of 5, in CA, with a housing payment of $1900 and we live a frugal but comfortable life. Our trustee payment is only slightly lower than yours at $610 a month. You really NEED to save any extra money that you can in those profitable months. I have a feeling you don't even really know where your money goes each month. The thing about money is if you don't tell it where to go, it runs away from you. Look over your bank statements carefully, especially at things like clothing, recreation, eating out, & groceries. It's so easy to overspend in those areas and not even realize it.

Once you learn to budget and save accordingly, $755/mo will not be "killing you" anymore. You'll sail through the rest of your ch.13 and come out the other side not only debt-free, but having learned a valuable life lesson that will get you to retirement--maybe you can even retire early! Save, save, save!

[joshcohen]

All good advice and you guys are 100% right I have not budgeted appropriately and yes should never of incurred the cost of a 2g a month Condo payment. I also had to buy an SUV which I bought used and paid Cash for and I paid for a large wedding on the beach this year that set me back 35 k. So you guys are right I can and I am managing however I just thought the possibility was out there that maybe as things have gotten a little leaner the past few months I could possibly find a loop hole. I probably should of mentioned that my high income comes from hard core software sales for a global player. I have to push hard to make that kind of money day in day out. Couple of bad months and all my other monthly expenses it gets hairy!!! Yes budget Budget budget is my mantra now. My wife and I are currently looking to sublet our place and move to a more residential neighborhood where we can save about 400 per month and have a bigger house and yard for the babies.

[Lissy]

Thanks for talking sh** Espo, you obviously have never made much money in your life. 200k pre tax dollars works out to a much, much lower figure when you incorporate, Life ins, car ins. rent, benefits, college fund, a Family of 4 with a wife who does not work. I will admit that I live in a posh upscale building that costs me over 2k a month in total expenses so for that I admit some I was not smart. I don't care how you slice or dice it $755.00 per month is $755.00 per month!! If I can find a loop hole to get out of it who wouldn't??? Oh and BTW I have lived a very nice lifestyle all Cash for the last 2 years. Also I feel my Lawyer mis advised me when I originally filed and treated me like a complete jerk! I have spoken to a current friend who is a BK attorney and he told me if I waited 6 more months from the date I filed I could've went 7 and been done!

I agree with the poster above, you need to really look at your budget. I am guessing that you moved into this "posh upscale building" sometime in the last 2 years, after you filed? I think you should thank your lucky stars that your Trustee didn't go after all of that extra income and increase your payment. I get that you have a family to support, but even with a $755 payment, it shouldn't be "killing" you. I make far less than you, my payment is $950 per month and I'm doing fine. If I made $200k per year and added 3 people to my household, I think I would still be ahead.

SO, how old are your kids? If they are little, don't you think you could stop contributing to a college fund for 3 years and pick it back up again when the BK is over? That's just one example, I'm sure there are other things you could cut back on so you aren't struggling. A Chapter 13 is about teaching you to budget. And yeah, it sucks, especially when you are used to living the high life. But in 3 years, your debt will be gone and all of your money will be yours again.

If you aren't willing to do that, then another poster outlined your options.

[helpmeout]

Guys 200k a year is not a lot of money in today's day in age. Look I simply was looking for a loop hole based on the fact that the reason I am in this plan was because of $50 K I transferred from my bank account to my dads (from a trust fund) before I filed. Yes BKdone I was thinking that at this point being that my Dad is Dead they may dismiss it. I know I am probably wrong and have to just keep paying it. It is what it is right? You make mistakes in life and you pay for them. Just makes me upset that big business gets bailed out and josh smo has to pay every month! Also the reason I am making 200K now is because I realigned my thinking in my Salesmanship in the industry I am in. Took full curriculum courses on life and business and have increased my income from 40k when I filed to 200K in two years. Is that stupid Espo?

Perhaps you should take a hard look at your budget then? Because if you pull out now, your creditors can come after you. And they will tack on late fees and interest charges all the way back to when you first defaulted. And they will go after you to pay their legal fees. And it won't matter what you paid before.

They aren't going to dismiss it. You made a preferential payment to a creditor. You chose not to have them go after your dad and elected for a Chapter 13. That was your choice to do. Now you have to either continue the next 3 years with the plan or dismiss it and pay even more.