In big trouble with 13!!

[TheBajan]

No, I'm adding debt to my home to pay off the $23,000 I didn't pay to the trustee for my work comp settlement. Plus, I'm done 6 months early and still keep all my assets. Best of all, I won't go to jail for bankruptcy fraud. Thanks for your encouragement 159515951.

It seems to me that finishing your plan six months early is actually saving you something in the neighborhood of $6600 because you are no longer making those plan payments. I'm so glad for you that you managed to find a solution. Congratulations!

[SMinGA2]

I'm not privy to the OP's case, but I'm guessing that lost income is perhaps why the Trustee required $23k of the original $40k.

If it was a worker's comp injury with time out of work - and its anything like one I was a part of years ago - medical claims are paid directly by the employer's workers comp insurance. The employee is paid 2/3 of their average regular wages (for the 13 weeks prior to the accident) while unable to work but with no taxes/FICA. Ultimately a settlement is to compensate the employee for any longterm loss of ability. In my case I was medically deemed partially disabled in my lower body, but nothing extreme. Not being able to be extremely physical/athletic didn't exactly change my life. Playing professional sports, mountain climbing, etc. never were in my plans anyhow. Dealing with rehab & recovery was a challenge, but other than occasional aches & pains I have no recurring issues. (I broke my legs in an auto accident while working - over 9 years ago - I assume my occasional aches & pains are similar to a case of arthritis.)

Congrats on the GREAT news.
But I just have to ask.... did your income go down while you were disabled during the surgeries? Was there additional medical expense? Or has that already been subtracted from the 40K?
Gotta cover all the angles ya know.

[159515951]

159515951 - I guess your post really rubbed me the wrong way. Maybe you didn't comprehend everything in my original post. Either way, in your words, it is my life and I'm pretty darn sure I'll be out of my bankruptcy and have a home and vehicles paid for before you do.
In case you haven't noticed, this forum is for advice, help, and learning from others' mistakes - not condescending remarks such as yours.

I didn't mean to offend -- I just didn't agree with your course of action. I think it's perfectly reasonable to state opinions here, lest others view your solution as a good one.

You're in bankruptcy and you added significant debt to your house. I can't be supportive of that, but it's nothing personal.

[keepsmiling]

Congrats on the GREAT news.
But I just have to ask.... did your income go down while you were disabled during the surgeries? Was there additional medical expense? Or has that already been subtracted from the 40K?
Gotta cover all the angles ya know.

[road warrior]

159515951 - I guess your post really rubbed me the wrong way. Maybe you didn't comprehend everything in my original post. Either way, in your words, it is my life and I'm pretty darn sure I'll be out of my bankruptcy and have a home and vehicles paid for before you do.
In case you haven't noticed, this forum is for advice, help, and learning from others' mistakes - not condescending remarks such as yours.

[road warrior]

You're adding debt to your house to keep a 4 wheeler? This sounds like bad financial decision making, but it's your life.

No, I'm adding debt to my home to pay off the $23,000 I didn't pay to the trustee for my work comp settlement. Plus, I'm done 6 months early and still keep all my assets. Best of all, I won't go to jail for bankruptcy fraud. Thanks for your encouragement 159515951.

[159515951]

You're adding debt to your house to keep a 4 wheeler? This sounds like bad financial decision making, but it's your life.

[justbroke]

Congratulations on your upcoming closing.

[road warrior]

After 4 months of talking to various banks and lenders, my local bank has agreed to refinance our house so we can pay off our bankruptcy. We close tomorrow afternoon at 3pm. After 4 1/2 years, this horrible time in our lives will finally be behind us!!
After all is said and done, we will end up paying about $4000 more than we originally filed on.
Our house payment will go up approx. $400/mo., but without the bankruptcy payment we should have the house paid off completely in less than 5 years!!

[shark66]

My injury was after our filing.

That being the case, you're not in as much trouble as you would've been otherwise.

Let's hope your attorney is competent enough to get you out of it...

Good luck to us all.

[road warrior]

A quick question for you.....did the injuiry that led to your worker's comp settlement happen BEFORE or AFTER you filed your 13?

My injury was after our filing.

Thanks to all who replied.
I'm still working out details of how to sell things, since I need court approval and then a motion is filed and I have to wait 21 days for creditors to object.
I never knew things could be so long and complicated until this. I sure hope we make it through all this!

[Flamingo]

First, the trustee will not work with you directly since you are represented by counsel. If you try to call, you will be advised to contact your attorney so you need to sit down with your attorney and go over all this. You know you made the mistake of not reporting any of this to your attorney. One's financial estate during the Plan years is under the control of the trustee and if there is any financial gain (or loss) during that time, it needs to be reported. That means any insurance settlements, inheritances, bonuses, increases (decreases) in income, lottery winnings, etc. Not to report those items could spell disaster as you have found out. Some people get to keep settlements (or portions thereof as your trustee only wants a certain portion of the $40,000 you received). Our trustee took half of an inheritance to my husband from his father who passed away during our Plan. We reported everything as we did not want to risk any problems, trouble or dismissal.

You will need to sit down with your attorney and figure out what needs to be done and your posting is an excellent lesson for those that may read this that they need to report anything like this ASAP upon learning they are even entitled to a settlement to avoid problems and a possible dismissal of their Plan.

Best of luck to you....

[catleg]

Has your income and/or expenses gone up or down since you originally filed (did you lose pay on account of your injury or suffer added expenses).
These might help mitigate the trustee's claim.

[lrprn]

A quick question for you.....did the injuiry that led to your worker's comp settlement happen BEFORE or AFTER you filed your 13?

I'm asking because I also received a worker's comp settlement during our active 13 but our lawyer said that since my work injury happened AFTER we filed, that our trustee had no right to take the settlement and our lawyer would fight it in court if our trustee tried. (In our case, I did notify our lawyer as soon as I found out I would be receiving a >$10K settlement.) Our trustee was aware of the settlement but never asked for it.

[LadyInTheRed]

If I were you, I think I'd start working on both options. Sell whatever you can and decrease your federal withholding. But also try to get a refinance to pay your taxes when they come due. I normally wouldn't suggest decreasing withholding, but I think owing the IRS will be preferable to getting your Chap 13 dismissed after getting this far. If you can't get a cash-out refi, you can use the $1086 for a payment plan to the IRS after you finish your Chap 13.

I agree with JB: Don't contact the trustee. The trustee is there for the creditors, not for you. Make an appointment with your attorney.