Chapter 13 early payoff

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Well today my attorney called with the trustee payoff and it matched exactly the difference from what I have paid in and the plan base from NDC. So now I know and unfortunately is more than I am willing to draw a 401k loan for at this point. At least I can plan more accurately now.

[drew999999]

No need to hail me. I'm a debtor just like everyone else here. Our combined experiences allow us to help others in similar situations. I was "lucky" (or unlucky as it really was) to have been in both a Chapter 13 and a Chapter 7 and as a Pro Se debtor. This gives me a different perspective.

Yes, the percentage that is listed on some plans is simply the Disposable monthly income, multiplied by 36 or 60, and then divided by the total claims "scheduled". It was really meaningless, but it did allow unsecured creditors a very quick glance to see if they wanted to even participate. I suppose if the percentage were 0.02% (as in my particular case), a creditor may not file (and some large creditors did not).

I read a diatribe of a Chapter 13 Trustee on this question of modifying plans when you make more money. This particular Trustee mentioned that less than 5% of cases that he administers have ever had a plan payment go up due an increase in income! He stated that they mostly don't bother you if you are in plan and nothing significant occurred. (Don't ask me what significant means, but we tend to believe that a 10% increase in income would not trigger a modification to a higher plan payment.)

As for being a helicopter client, I think that everyone should have a level of comfort with their attorney. As a client, you should also understand the direction your attorney is taking and ask questions if you don't understand. There's nothing wrong with that!

I feel quite lucky to have found this forum years ago during my initial plan setup. Spent many years lurking threads and soaking up information, but not a very active poster. I should change that since its the posts that help. During my case, my attorney suddenly became ill and passed away. The very knowledgeable and helpful lady directly above this post helped steer me to information that has allowed me to finish up the last year of my plan Pro Se. Just a few days left until my discharge hearing. Its awesome that a place like this exists to let us share experience and info with others feeling similar pains. Been saving the 'my story' post for post discharge. It's been quite a learning experience and possibly one of the best things that I could have done to improve my life (as weird as that sounds).

[LadyInTheRed]

I don't think I was clear.

You were clear. I misread your question.

[justbroke]

No need to hail me. I'm a debtor just like everyone else here. Our combined experiences allow us to help others in similar situations. I was "lucky" (or unlucky as it really was) to have been in both a Chapter 13 and a Chapter 7 and as a Pro Se debtor. This gives me a different perspective.

In non 100% plans, is it true that the total % is nothing more than the total expected disposable income divided by the total unsecured claims? Also I am assuming that if the trustee wanted to re-evaluate your income during the plan and found additional disposable income to increase the payment, this payback percentage would increase and has no effect on the plan length unless 100% of all claims (secured and unsecured) are paid.

Yes, the percentage that is listed on some plans is simply the Disposable monthly income, multiplied by 36 or 60, and then divided by the total claims "scheduled". It was really meaningless, but it did allow unsecured creditors a very quick glance to see if they wanted to even participate. I suppose if the percentage were 0.02% (as in my particular case), a creditor may not file (and some large creditors did not).

I read a diatribe of a Chapter 13 Trustee on this question of modifying plans when you make more money. This particular Trustee mentioned that less than 5% of cases that he administers have ever had a plan payment go up due an increase in income! He stated that they mostly don't bother you if you are in plan and nothing significant occurred. (Don't ask me what significant means, but we tend to believe that a 10% increase in income would not trigger a modification to a higher plan payment.)

As for being a helicopter client, I think that everyone should have a level of comfort with their attorney. As a client, you should also understand the direction your attorney is taking and ask questions if you don't understand. There's nothing wrong with that!

[drew999999]

The percentage as a function of what's on your Plan and reads something like "% to unsecured creditors"... does not matter.

However, the amount you must pay (base plan amount) into the plan does if you are "forced" into a 100% plan (typically due to the "Chapter 7 liquidation" value of property that you are keeping).

When I talk about 100% Plans, I'm talking about a plan base requiring the debtor to pay 100% of the allowed unsecured claims. This is different from the "% payback". In fact, the model plan for the Middle District of Florida does not even list the "% payback"! Older plans did list a percentage, but now this District just lists the total amount in dollars expected to be paid to the general unsecured creditors that file allowed claims.

http://www.bkforum.com/showthread.ph...sn-t-matter%29

First things first... All hail the all mighty justbroke! I appreciate all the great info you put out here for us and remember quite a few names that I followed religiously trying to soak up as much as possible. My lawyer called me a 'Helicopter Client' since I had a tendency to ask tons of questions and catch him on a few things. A big thank you from me!

It took awhile for me to figure out what everything meant on NDC/13datacenter. My plan base and payment was the total balances that I put on my initial packet. The filed and approved claims totaled $6k more than the base and were showing up on NDC. Monthly, I would export the numbers from NDC and run autosums to keep up with the totals. I was in a 100% payback plan and required to pay all approved claims. My payment wasn't re-calculated and was told that I would end up paying past the 60 months if I didn't come up with a lump sum at payment #60. (Not sure how this would have played out if I hadn't payed out early). In non 100% plans, is it true that the total % is nothing more than the total expected disposable income divided by the total unsecured claims? Also I am assuming that if the trustee wanted to re-evaluate your income during the plan and found additional disposable income to increase the payment, this payback percentage would increase and has no effect on the plan length unless 100% of all claims (secured and unsecured) are paid.

[spidge]

I agree with you that payback does not matter, until you go to finish the plan and are looking for a payoff amount. There was no clear explanation anywhere I looked, including that thread, on the scenario I suggested so thank you for your responses.

So from what I gather the "only" source will be the trustee and not either of the BK sites that track case progress which caused my confusion and triggered some questions.

Thanks again.

[justbroke]

I knew that there was a good explanation of the percentages. HHM did a great thread that's stickied called: % Payback (it doesn't matter). When I first started looking into filing, this thread was something that made the light bulb flick on.

The percentage as a function of what's on your Plan and reads something like "% to unsecured creditors"... does not matter.

However, the amount you must pay (base plan amount) into the plan does if you are "forced" into a 100% plan (typically due to the "Chapter 7 liquidation" value of property that you are keeping).

When I talk about 100% Plans, I'm talking about a plan base requiring the debtor to pay 100% of the allowed unsecured claims. This is different from the "% payback". In fact, the model plan for the Middle District of Florida does not even list the "% payback"! Older plans did list a percentage, but now this District just lists the total amount in dollars expected to be paid to the general unsecured creditors that file allowed claims.

http://www.bkforum.com/showthread.php?34708-Payback-%28it-doesn-t-matter%29

[drew999999]

I knew that there was a good explanation of the percentages. HHM did a great thread that's stickied called: % Payback (it doesn't matter). When I first started looking into filing, this thread was something that made the light bulb flick on.

[justbroke]

Say there are 10 creditors listed at $1K each paid back at 50 percent for a beginning total of $5K in the plan. After the claim period only 5 of those creditors made claims for a total of $2,500 using the original 50 percent payback. Would these remaining claims receive a higher payback because the other creditors did not make a claim? Would they get more based on the monthly disposable income?

I'll be 100% clear.

In a 100% plan, every "allowed" claim will be paid in full.

If you are not in a 100% plan, and only 50% of the creditors file a claim, then those 50% would receive the value of their claim. In your scenario, you mention 10 creditors each being owed $1,000. In my scenario, if only 5 of them filed, and all 5 were "allowed", then they would receive $1,000 each of 100% of their claim. The total you would pay is $5,000. If you were in a 50% dividend plan, then it would magically transform to a 100% plan since it paid every creditor 100%.

[spidge]

Thanks drew, I thought that was the answer, but of course was hoping for better.

[drew999999]

I don't think I was clear. Do those who made a claim share what would originally have been distributed to those who did not make claims?

Say there are 10 creditors listed at $1K each paid back at 50 percent for a beginning total of $5K in the plan. After the claim period only 5 of those creditors made claims for a total of $2,500 using the original 50 percent payback. Would these remaining claims receive a higher payback because the other creditors did not make a claim? Would they get more based on the monthly disposable income?

Unfortunately for us... they would take those funds and distribute them to the other creditors. Since the creditor that didn't file wouldn't be in the claim total, this scenario would actually put you in a higher payback. In your scenario, it would assume that you have $2500 in disposable income would come out to the 50% payback (if all creditors filed). If one did not file, you would still pay $2500, but since there would only be $4000 in claims, you would now be in a 62.5% payback plan. No changes in your payment would be made. The percentages are really confusing and don't mean alot until you hit 100% payback. In 100% paybacks, most trustees are a bit more relaxed with the 'all disposable income' thing and will let the payments go out to 60 months even if there is extra money that is considered 'disposable'.

[spidge]

If a creditor doesn't file a claim, the creditor does not get paid a penny. The debt will be discharged in full (assuming it is a dischargeable debt and the creditor got notice of the BK).

I don't think I was clear. Do those who made a claim share what would originally have been distributed to those who did not make claims?

Say there are 10 creditors listed at $1K each paid back at 50 percent for a beginning total of $5K in the plan. After the claim period only 5 of those creditors made claims for a total of $2,500 using the original 50 percent payback. Would these remaining claims receive a higher payback because the other creditors did not make a claim? Would they get more based on the monthly disposable income?

[drew999999]

If one is under median and over the 3 year mark the plan base becomes the focus despite payback percentage.. Then again every district is a little different.

While this is true, the Trustee's job is to collect your disposable income and make payments on the filed claims. The way that I understand an under-median/over 3 year payback, if the debtor were to get a large bonus and attempt to pre-pay the payments in year 3, it would be posted as a 'one time payment' instead of the monthly. The plan base is nothing more than the original plan, but if additional money (tax refunds, etc allow for the base to be paid earlier than 60 months, collections can continue. My plan base on NDC was actually based on my guessed balances when I did my initial packet. My payments were then this number/60. When I originally found out that I was going to be able to payoff early, I assumed that the payment would be the plan base minus the payments already made. I was corrected and told that if I paid that amount, monthly payments would continue until all claims were paid in full or 60 months of payments were made. Long story short... I had to pay more than the plan base to complete my plan early as the submitted claims were higher than my plan base.

I just question the lawyer's statement that if the plan base was paid in full in a non-100% plan, that no additional payments would be necessary for the rest of the 60 month term. Why would the trustee allow the extra couple of years' disposable income be exempt?

[LadyInTheRed]

If a creditor does not make a claim do those creditors who made claims benefit or are they only allowed the amount based on the original payback percentage?

If a creditor doesn't file a claim, the creditor does not get paid a penny. The debt will be discharged in full (assuming it is a dischargeable debt and the creditor got notice of the BK).

[spidge]

If a creditor does not make a claim do those creditors who made claims benefit or are they only allowed the amount based on the original payback percentage?