just received notice from GM that we owe them over $14,000 !!!

[justbroke]

Our plan payment is $1094 for 46 mos. with only 1% to unsecured creditors. Can the payment go down if it all going to secured creditors, or will the plan just be extended for up to 60 mos. Worried about that.....

There are several factors that determine your base plan payment. There's the Chapter7 liquidation test, which can determine a minimum if you have property that you're keeping which isn't exempt. There's also the DMI test.

If the liquidation test is $0.00 (usually negative), and your DMI is negative, then you'd only be paying the secured creditors and the Trustee commission. If the $1,094 includes 1% for unsecured creditors, solely because you were showing positive DMI, and now the DMI is reduced due to unavailability of the retirement funds due to offset, then your % for unsecured creditors, and therefore your payment, would naturally go down. Your payment cannot be less than what's required to pay the secured debt, priority debt, and Trustee payment.

[lookin4info]

Our plan payment is $1094 for 46 mos. with only 1% to unsecured creditors. Can the payment go down if it all going to secured creditors, or will the plan just be extended for up to 60 mos. Worried about that.....

[justbroke]

If your plan payment is going down respectively with the benefit overpayment, then that should make it a wash, right? I'm glad that this worked out in the end.

[lookin4info]

Well, the final results are that we can't include the $14,000 in our Ch 13 plan abd GM can reduce the benefits until its paid back, for the next 14 years. We have made an appointment to go in and amend our plan since the monthly income will be $300 less per month.

Thanks to all who commented and the research Des. I love this sight and read on it almost every night. Thanks again.

[lookin4info]

Wow, thanks for all the input, thought, and research into this matter. I faxed the GM letter to my attorney at the end of last week so I'm giving him some time to do his research. I think we're in a pickle here. At least his benefits cover the repayment (even though it will take until 2025!), but I'm very concerned about how the $300 income loss will affect our plan. I think I'll send him your info Des. I will post the final results when I have them.

We haven't had the 341 yet, but our proposed plan is 46 months w/1% to creditors. I know we can't pay any less to creditors so guess the plan will be extended.

Any thoughts on if the payment will go up, even though the income is going down?

Ya know what they say about if it weren't for bad luck, I'd have no luck at all

[justbroke]

I was going to look it up.

[HHM]

Well, there you go.

I am glad someone looked it up
This is what happens when you "guess"

[despritfreya]

The below cite is the seminal case dealing with recoupment for an over payment of pension benefits.


Brown v. General Motors Corp., 152 B.R. 935 (W.D. Wis., 1993)

"This Court concurs that an erroneous overpayment in connection with a private employee benefit plan gives rise to a valid right of recoupment against future benefits where such recoupment is available under the Plan or by agreement between the parties. The provisions of the present plan and the agreement executed by the plaintiff provide as the sole remedy for overpayment recovery against future benefits. No interest is recoverable and no independent claim beyond the amount of future benefits is available. Under these circumstances the right exercised by the Pension Plan is not an action on a claim or the collection of a debt."

Des.

[HHM]

Yep, this one has me stumped as for a specific answer.

The research would begin on identifying how GM has a right to set off and the nature of that set off. Then trying to figure out if that is analogous to other similar situations (i.e. over payment of SSI or Unemployment benefits) and could be discharged. However, I lean the other way, I think it is dischargeable. It is still a debt, GM is saying they have claim against you and there is no obvious line item in section 523, exception to discharge, that seems to apply (maybe a18, but even then, that references loans against pensions); but you could be in for a long haul to get the bureaucracy of GM's retirement plan to recognize it and continue paying 100% benefits. The unclear part of the puzzle is what happens to the pension benefit. That is probably well beyond the scope of what any BK attorney could help you with, you probably need to see a employee benefits lawyer for that.

[daylate]

Just something to consider-GM filed for bankruptcy and was reorganized-my guess is pension plan(s) were not affected but it is worth at least taking a quick look at.
No wonder GM was ficacta only took them 20 years to figure something out. Sheesh. Good luck

[justbroke]

Even more complicated is that if this is a company-sponsored Plan, there may be terms that won't allow the Bankruptcy to penetrate the pension plan and its rules. However, a savvy attorney might file a claim -- on behalf of GM -- for $14K as an unsecured debt, and then litigate it in the Bankruptcy court.

It would be quite interesting, and I'm sure even Des would be interested in the outcome!

My thoughts are with Des that this is not dischargeable and hence not subject to discharge because the right of setoff existed both before the commencement of the case and the Plan can actually offset against a future liability (future Plan payments).

[lookin4info]

Charlie777, I'm hoping you're right, lol. I spoke to my attorney today and I'm faxing him a copy of the letter we received. He said he would have to look into it before he could tell me exactly how it would be handled.

As far as a $300 pad in our plan, oh boy, that will be very tricky. I think we were down to the nitty gritty already. I'll keep you all posted!

[Charlie777]

I think this is more complicated. I suspect that GM has to become an unsecured creditor, cannot reduce the payments, and the $14,000 gets in line with other unsecured claims. It's imperative that your attorney look carefully at this.

[BKOnce]

GM sucks.. their stocks go up but they still screw everyone's benefits.

[catleg]

I think the tax issue will be moot since you don't have the capacity to repay the 14,000 overage.
They just shot a $300 hole in your 13 plan payment, unless you have enough padding elsewhere to cover it.