Trustee not making secured creditors prority

[Allen35150]

When I first entered Chapter 13, two years ago, the trustee made my car a priority and it was made off at the end of year one. After that I noticed that the money is now distributed in varying amounts to all my creditors, secured and unsecured. Most months unsecured credit cards, which all are debt buyer owned, are getting more than the IRS and mortgage companies. My mortgage arrears and the IRS could be paid off in 3 months if secured creditors were placed first. At this rate, it will take over 2 more years for the secured creditors to be paid. I realize that trustees vary but is this something you can bring up to your attorney or trustee? To put secured creditors first. I had always assumed that was the rule by law. My case is in Alabama. My attorney's office has been less than helpful in the past when I have had questions.

[justbroke]

For most fixed payments, such as a mortgage which continues beyond the Chapter 13, the Trustee is only going to pay the "arrears" divided by 60 (if you're in a five year plan). Likewise, for "priority" unsecured creditors the Trustee will also pay the amount due divided by 60 (if you're in a five year plan). It's nothing for you to worry about.

There have been cases where the debtor, through counsel, created plans that pay off certain things first (like secured and priority debt, just as you mention). Some Trustees have argued that the debtor could be doing this to pay off secured debt, and then just stop paying to have the case dismissed without unsecured creditors getting anything. Then just turning around and filing Chapter 7 (2 years into the Chapter 13). It's an interesting strategy, and when you think about this, it's a good argument the Trustee makes.

My Trustee paid items almost the same way your Trustee has been making payments. I was shocked that she was paying unsecured creditors and not just paying off the secured debt.

Remember, more than 80% of confirmed Chapter 13 plans never make it to discharge. The Trustee is trying to make it bearable for all creditors.

At least that is what I experienced.

[switch625]

See my previous posts but my Trustee (Eastern District PA) paid all my back taxes and secured debt on the first disbursement (confirmed in late July, paid in August), and has paid only secured creditors (my back taxes paid in full now) on my second disbursement (September). He hasn't paid anything to the unsecureds yet. NDC has nothing for October at this time.

[Allen35150]

Thanks for your replies. I see two totally different responses. I guess that's proof that trustees are different. You would think that the bankruptcy law would dictate the order of things. I would love to hear an attorney's view point or experience. I may break down and call mine. I have a car with 423,000 miles on it that I drive 100 miles each day and I will drive it till I can't no more. But I really would like the secured debt to be paid off in case I have to come out early. Because, from my understanding, getting a car loan will be a little easier without being in a 13 plan. This is basically what justbroke was referring to and the reason some trustees use different tactics to keep you in the plan. But in my case I don't qualify for Chapter 7 so I will still have to pay the unsecured debt on my own IF I cut out of my plan early. I have about 22 months left.

[May2014]

Our secured debt has been getting paid regularly. We have student loanss, which are considered unsecured debts, also being paid (not regularly). Our priority debt hasn't gotten a dime. Makes no sense to me, either!