Objection to Amended Plan

[May2014]

Got official word that trustee objects to our proposed plan because "payments made by the trustee exceed plan payments." I looked on National Data Center, and that investment property that we're surrendering is scheduled to be paid $1406.77 a month as a secured claim. I know what I signed...SURRENDER. I also know the trustee wouldn't allow us to use it to qualify for chapter 7, so he can't possibly be allowed to hold it against us in a 13. Can't have it both ways! Someone has totally botched the paperwork, and I'm getting a little irked by how inept everyone seems. In five years, maybe I'll have a different view. At this point, I'm thinking it doesn't take a genius to fill out this paperwork and hang out in meeting rooms. I should have gone to law school.

Sorry, just feeling a little jaded right now...

[justbroke]

Don't look at NDC as some sort of indicator of your plan. My NDC "claims" and what it was paying didn't match my Plan until some time after confirmation. When the Trustee loads ALL claims into NDC they load everything that is on your Plan regardless of treatment. Then, they typically will change different statuses on the items as the case progresses.

I can't tell you what your objection means because it the wording does not make sense. If you had written that plan payments to the Trustee do not adequately fund the plan (a/k/a an infeasible plan), then I could maybe ask for more information and ferret out the disconnect.

In any event, a Chapter 13 plan is not just attending some meetings. In fact, the Chapter 13 Plan of Reorganization is the debtor's proposal to the creditors on how the debtor would like to proceed through the "commitment period" (36 to 60 months). It's a binding contract and you there are few people who get their "first" plan confirmed. There are typically 2 or 3 amendments prior to confirmation. Very typical, especially where there are assets... especially with automobile creditors (whom I call the worse creditors).

The fact that you already have an amended plan tells me that there are already changes to your proposed "plan" of reorganization to satisfy either your needs to the needs of particular creditors. Not uncommon. I don't know if your Trustee's objection is "formal" or merely that the Trustee thinks there needs to be changes. There are things such as the "best interest of creditors" test and the "Chapter 7 liquidation test" which may be affecting your plan. Only your attorney or someone intimately familiar with your "paperwork" could tell.

I know you just wanted to vent, but I wanted to let you know that there is more to it than meets the naked eye.

[May2014]

I heard back from our attorney who said he doesn't know what NDC is. He said we will be confirmed at the next meeting (9/10), but I'll take that with a grain if salt. The objection looked pretty formal to me, it "prays the court" to deny confirmation. The trustee, I think from the way I read it, says that what we're paying currently isn't enough to cover what he's paying out (2 student loans, 2 cars, attorney and trustee fees are all the "musts"). When I do that math (and the attorney as well), we'll actually be paying about $6k to unsecured creditors as well.

Here is what I've decided...just tell me what to pay and when, then let me know when the 60 months are over. I surrender!

[plateump]

Ah, yes.. that is the long and short of it. My attorney was very quick with replies to the trustee and handled all the paperwork and I just went with that. It was over in 60 months. Surrender is never easy, but this is so regimented you have to follow it. But DO review every single order, addendum, amendment and all correspondence from the trustee and make sure your attorney is aware of it and keep in touch him/her.

Good luck, don't let the legalese scare you. A lot of it is fluffy language from English Common Law mixed in with some Latin. At the risk of being a noodge...."Illegitimi non carborundum!!"

[LadyInTheRed]

It does sound like here is an error in the plan or an error in the trustee's calculations. Have you looked at the plan to see what payments are included?

Don't worry about NDC. It is the trustee's tool for managing payments. It is not an official court record. If you believe NDC, I'm paying 100% of all unsecured claims. I'm actually paying less than 1%. I rely on it only to make sure my payment was received. It was also fun to watch my car loan get paid off.

If the problem is an error, it's easily fixed. You are wise to leave it in the hands of your attorneys. But, don't surrender completely. You should understand what is going on. You are your own best advocate.

[justbroke]

Many Trustees don't believe they are doing their job unless they object to your plan. My Trustee objected as well for no reason at all (once I explained some items to them in the conference room outside the courtroom).

In law school, they tell you that if you fall asleep, doze off, or lose track of testimony in a trial, just yell out "Objection!". For some reason, I think the Trustees are just yelling objection just to make people defend their plans.

(Please note that some of this is sarcastic but there is a basis in reality. There are people who have their plans confirmed at the first confirmation hearing -- typically because there is relatively nothing in the plan. As plans get more complex (cars, homes, cram downs, lien strips, etc), the likelihood of objection exponentially increases.)

[LadyInTheRed]

There are people who have their plans confirmed at the first confirmation hearing -- typically because there is relatively nothing in the plan. As plans get more complex (cars, homes, cram downs, lien strips, etc), the likelihood of objection exponentially increases.)

Mine was easily confirmed right away, with a car loan. It was a very straight forward plan. I think it helped that I had a very experienced attorney who has been dealing with the same trustee for years. The car loan didn't have to be included in the plan, but my attorney said it was a good idea in order to give the trustee something to earn a fee on. Maybe that is why she didn't object.

[justbroke]

Trustees love it when they get "something" from a plan. It looks like your plan, LITR, had no cram down and you were current on your car. Those are amongst the easiest to confirm.

[sophieanne]

My chapter 13 was confirmed the same day as the confirmation hearing also. Had a car payment that was given a reduced interest rate (paid off after a couple months in the plan) and lots of unsecured debt. 100% plan. I think our case is similiar to Lady in the red's. Trustee and Lawyer had worked together for a long time. ALTHOUGH, even my attorney was surprised it confirmed immediately..he said the trustee usually finds some little thing to nit pick about. Guess it was our lucky day
HAPPY FRIDAY evryone..have a great long weekend!

[kornellred]

Not entirely thread-related, but perhaps amusing when ruminating about the reasons why Chapter 13 trustee objections often seem like protocol:

CHAPTER 13 TRUSTEE COMPENSATION
Finally, I come to the topic of chapter 13 trustee compensation. I am pleased to report that chapter 13 trustee operations
are, by and large, quite efficient. Last year, trustees expended
$322 million while distributing nearly $6.3 billion to creditors. The average percentage fee applied to receipts was 5.7 percent, which is down from 7.7 percent just four years ago. On the issue of individual chapter 13 trustee compensation, you know that the USTP diligently sets compensation in accordance with statutory standards. By statute, the Attorney General sets compensation no higher than the rate of basic pay for Executive Level V of the federal pay scale plus the cash equivalent of benefits given to federal employees who perform equivalent services. The Attorney General has delegated the authority to set compensation to the Director of the USTP.

The rate of basic pay is easy to set. Today, it is $147,200. Approximately 96 percent of all chapter 13 trustees receive this maximum amount. Although some suggest that we adopt the
courts’ individualized approach to setting trustee compensation in bankruptcy administrator districts, we instead provide the maximum compensation allowed by law to all chapter 13 trustees except those who have an exceptionally small case load.

I copied and pasted this quotation from the US Trustee's website, from a speech given at the 2014 National Chapter 13 Trustees Conference. The significant fact I would like to point out is that 96 percent of all Chapter 13 trustees receive the maximum amount of compensation allowed by law ($147,200 per year) plus about $59,000 in benefits. Therefore, Chapter 13 trustees are not posting plan objections with the goal of self-enrichment in mind.

I do not know why the copied and pasted quotation printed like this!

[May2014]

Well, it's good that trustees don't get paid per objection!

Attorney still swears we will be confirmed on the 10th because the objection will be overruled. I don't know how he knows this, but whatever. At our 341, lawyer after lawyer told their clients to expect objections, including our own. I imagine that's just how it is with some trustees. I guess it's better to close every hairline crack instead of facing the consequences of letting something slip through. I only have four years and nine months of payments left, just keep swimming...