Trustee holding funds

[moochie]

My 13 plan is under 100%, so I had to send my tax returns to the trustee. I sent him my check about 3 weeks ago. The funds have not been given out yet. The check was for a considerable amount $2500+. This would be enough to pay off my back mortgage payment, pay my attorney fees off completely and take a big chunk out of my secured portion of my car. I am wondering why he is holding these funds. It seems that the trustee sends out payments on the 1st of the month. He received my check in March and the only payments made on April 1st was attorney fee and trustee fee. My balance is around $3000 now.

[Minnymouth]

moochie,
You might as well know right now the Trustee will do his thing as he see's fit.... He will designate when the creditors will be paid and how much.........

Yeah, you see all the places that refund money could go too - but he makes he decisions about it..............

Best thing you can do is just pay him - let him do his own thing....

Minny

[aa06a47]

Yeah, the trustee is earning interest on that money. Why dole it out so quickly. I am sure there is some law that stiuplates now long the trustee has to dispurse the funds. I wouldn't worry about it.

What I would worry about is why are you getting that large of tax refund. You need to adjust your witholding so you get 200 back instead of 2k back. Especially if you have to give it to the trustee!!!

[13inOR]

Mocchie, Minny is right, don't hold your breath... the trustee has his own timeline.
Ours only pays out in the morning of the last day of the month, then any money that has come in for that month is disbursed at that time.

Heres a good one for you- we paid off our plan, and the trustee received the funds in the afternoon of 2/28/06. So over $12,000, enough to completely pay off our plan, sat there till 3/30/06 when they were disbursed to the creditors. This left about $2000, that was over and above what I owed, and needed to be refunded back to me. But, there is sits....... so I called about 4/10/06 and asked them about my refund, and they said "oh, that wont be disbursed till the last business day of April, our next payout date. Actually you wont get it till about mid may, though."

So dont ask me why they couldnt have paid me when they paid everyone else,
but evidently they had their reasons. Dumb thing is I paid 100%, and the ledger showed they were paid in full, so its not like they thought I still might owe something. Hey, maybe their computers and electricity completely shuts down from the 1st to the 29th or something????? They are a technological phenomenon!!!!!!
Its not really my money that bugs me so much, its the fact that all this further delays my closing and discharge, so this can be behind me. What frustrates me is this has been paid for 6 weeks now, yet Pacer still shows I am in an active, current chapter 13.. UGH!!! I get no respect!!

Anyway, dont sweat it, they will get it disbursed,and the attorney and the mortgage, in that order, will come off the top. Just let it go, and remember you are living up to your end of the bargain, and the trustees schedule doesnt change that any!

[Minnymouth]

YES, THE CHAPTER 13 TRUSTEE MAKES A LIVING OFF OF INTEREST ALSO................ he pays the creditors when he gets ready too... I'm sure he's allowed to hang onto for a certain length of time.....
He hires his own firm to handle the payouts......... extra money there also.

And if you think you'd get "respect" from the Trustee..... that's a joke!!!

We are a "paycheck" to the Trustee, the more he can get the better.........

And if you have overpaid in a Chapter 13 - you will get it back EVENTUALLY............... but don't plan on next week.

Minny

[LostOne0069]

I have worked for a couple of attorneys in the last 15 years and they aren't allowed to keep interest on money that is not theirs. They keep at least two separate accounts. Their own account that they do get to collect interest on (of course), and a separate account, (for the life of me I can't remember what it was called, but it had it's distinctive name) that they put money in that wasn't theirs... or at least not yet. The interest that accrued on that account was sent off on a regular basis to some government body (once again, I forget which one).

Bottom line, I REALLY doubt very much that the trustee gets to keep any of the interest that your bk payments are collecting.

It's really easy to look at trustees and lawyers as bad people... and in some cases I'm sure they ARE bad people. But for the most part, attorneys are like anyone else. They chose their field because it interested them and they thought it would pay decently if not very well.

What most people don't understand is that a lawyer is REQIRED to do the best he can. If a trustee decided to cut someone some slack and not go after an asset that he, as trustee, had the right to take... if that were brought to the attention of the correct "authority" (I have no idea who this would be, possibly the US trustee?) that trustee could be disbarred. People complain about how high attorney fees are... Well, in the law firms where I worked, attorney fees ran from about $150/hour to about $700/hour.

If you calculate that out at 40 hours a week and 52 weeks a year... you'd think that attorneys make between $300,000-$1,450,000 per year.

Well, couple things here, first, lawyers in general (at least the ones _I_ worked with) work a LOT more than 40 hours a week. A fairly standard work week was 50-60 or more. Second, they have their office, their equipment, their other overhead to pay for... and not counting insurance, this is a pretty good chunk... but not the largest thing they have to pay. Malpractice insurance is INCREDIBLY expensive! The one firm I worked for had about 15 attorneys and they paid well into the six figures every year for malpractice insurance.

The attorneys at that firm made from about $50k/year to about $150k/year.

Anyway, not to say all lawyers are cuddly and sweet... I'm just trying to say that it's easy to judge others harshly when you're only looking at them from your own point of view.

[Minnymouth]

LostOne0069,

Okay,

Four (4) of my closet friends are attorneys, but not bankruptcy attorneys......
I used to work for one of them years ago....... and a close friend of mine still does.
They rub elbows every day with my Trustee and my Judge on my BK case....... hell, they even went to college with him and have been in Court with them. (you know the good ole boy's golf and lunch bunch)...

Yes they pay high mal-practice insurance - BUT they also make BIG BUCKS.......

Believe me, I'm not the one living in $350,000 homes or even a $1,000,000.00 home.

Are there dishonest attorneys - YES - some are not - and few will ever work on a "hardship case"..... unless Court appointed.

I asked one if the Trustee makes money off the interest of the money for the creditors...... YEAH - that was a stupid question to ask!!! The Trustee hires his "own" lawfirm............... to handle all the transactions. The Trustee has to account for all funds and where they go..... but they also get a big cut of the pie for handling the transactions (as a Trustee, then as the law firm that dispenses the funds to the creditors). Creditors are paid by % of what is owed them not by what is accumulated in the creditors payout fund.

So, when you hear a Trustee doesn't make much,,,,,,,,, DUH, your not reading between the lines......

[Minnymouth]

As for an attorney getting disbarred because he didn't work in your best interest............DOESN'T HAPPEN OFTEN........... NOT OFTEN ENOUGH!!

[SinkingFast]

I read, at the DOJ, the US Trustees' program is self supporting. Not one penny of taxpayer's dollars goes to pay for BK. All the money comes from BK filers.

So even if the Trustee isn't personally benefitting from all the interest accruing on monies on deposit from BK plan payments, the entire US Trustee's program is. The 12 big dudes and dudettes, the US District Trustees, are paid by BK filers. Not the Federal Government. The Standing Trustees, the local dudes and dudettes, are also paid by BK filers.

Not one penny of US Tax dollars is paid out to support the BK system in this country.

[aa06a47]

That makes me feel better, us poor smo's paying for all them granite wash basins in the bk judges bathroom... Guess someone has to pay for it.

[aa06a47]

Here is a link on how trustees are paid.

http://www.moranlaw.net/bankruptcy_trustees.htm

[aa06a47]

How, the obvious question about do they get interest? I will assume since you send them the checks directly (I actually send mine to an out of state address for some reason) that there business will keep the interest. Of course, to assume something makes an "ass" out of "u" and "me".

[Jman30]

This is an interesting thread, since I have a court date scheduled for May 3, 2006. Ford Credit filed a relief from Stay, because the Trustee has not paid them a singler penny in the entire 18 months of my Chapter 13. Therefore, they feel that since the vehicle is a depreciating asset, they should get relief from Stay.

[robivi3]

Min,
i just looked over your post quickly. It's just funny how perceptions are. You figure that in Rural areas that people are so sweet and good. Many moons ago I had a serious issue and no money. I had been on a Civil jury in a case that involved believe it or not the local CIA front company/airline chosen because i could read schematics and demonstrated some knowledge of mechanical drawings. The Plaintiff Attorney was from a wealthy family whose grandfather had founded the recording Co. with the dog and grammophone, that's the way I'll say it, don't wanna do "TMI". I went to him out of desperation and the man helped me, PRO BONO. I have several friends who have needed and gotten help Pro Bono, none of them indogent (I think thats the spelling).

Down here for all its big cold ways, it is odd that you can almost always find help in a situation. I mean, I've seen people asking for money because they didn't have gas to get where they were going and someone will pay for them. Our Pastor (when the Church was new and he was broke, about 1993) had his car break down about a mile from here. In the street, 8am and a little kid sees him and asks if he wants to come to his house to use the phone. He walked into a house full of people of varied ages, sleeping in every room and used the phone and was welcomed!

I remember back in 1987 someone giving us a thanksgiving Turkey out of the blue, and we needed it! i don't know if others in a big city see the same kind of acts, and in my life they have not been uncommon, but it's just that way. I think in an area like this many people want to generate a "family Karma' so to speak. who knows...

[moochie]

If I adjust my witholdings, won't the trustee see that I am bringing more money home and want to raise my plan? Seems like he will get the money one way or another.