Chaper 13 Debt

What is the name of your state? NC

I filed my chapter 13 in December 2002. Payments have been made since January 2003. I recently received a letter from the Trustee showing all the creditors who filed and did not file. My current payment is $490/mth for 5 years. Since everyone did not file as expected, will I be able to either (1) shorten the time of my bankruptcy or (2) get my payments reduced if I have to leave it at 5 years? The letter stated that my total unsecured debt was $12,273.80 and my secured debt was $15,390. The attorney's fee was $1300. The unsecured debt shown in the letter was the full amount I provided when I filed. I am hoping I can shorten the length of time in the plan. Please help. Thanks!

[HomeGuru]

Originally posted by nc1974
What is the name of your state? NC

I filed my chapter 13 in December 2002. Payments have been made since January 2003. I recently received a letter from the Trustee showing all the creditors who filed and did not file. My current payment is $490/mth for 5 years. Since everyone did not file as expected, will I be able to either (1) shorten the time of my bankruptcy or (2) get my payments reduced if I have to leave it at 5 years? The letter stated that my total unsecured debt was $12,273.80 and my secured debt was $15,390. The attorney's fee was $1300. The unsecured debt shown in the letter was the full amount I provided when I filed. I am hoping I can shorten the length of time in the plan. Please help. Thanks!

**A: you won't be able to make the higher payments based on a 3 year plan.
And what's 2 payments?

Thanks for the response. I was wondering if I calculated correctly. I was thinking that since the $490 for 5 years was based on everyone filing that I would be able to. Someone told me that unsecured debt was .25 on the dollar. I was not sure if that was accurate or not. If it was then my debt would only total $19,758. By my calculations it would be

3 years = $548/mth
4 years = $411/mth
5 years = $3329/mth

If I keep on paying $490 then it would be paid out in 40 months. Is my thinking totally misconstrued. Please let me know.

Thanks

[Elmo-1]

First of all, not everyone has the same percent payback to unsecured. That's a unique number based on your 5 year disposable income minus the total secured and priority debts in your petition. Secured debt and priority unsecured debts include administration fees, trustee fees and interest on secured loans. The difference (5 yr disposable minus everything requiring 100% payback) is divided by your total unsecured debt. That percent (and that total dollar amount) is what you end up paying back to unsecured creditors.

What you have to remember is that by law you have to put ALL of your disposable income into the plan for a minimum of 36 months. Creditors have 90 days after your 341 meeting to file a 'late' claim. Beyond this (bar) date, claims can still be filed, but you can object and have the claims thrown out. If it happens that not all your unsecured creditors filed a claim, the Trustee can do one of two things (changing the plan payment isn't one) typically after month 36 :

1) Increase the % to unsecured and the give the remaining creditors more than originally confirmed in the plan. With this option there's no advantage to you until unsecured is paid 100% of their filed & approved claims.

2) Keep the % to unsecured the same and shorten your plan term. At the 36th month audit, your plan's principle will be reduced only by the amount of debt owed to creditors who didn't file a proof of claim. The importance of this is that the plan can only be shortened to the extent that it still allows full payment of all secured and priority debt in the plan PLUS the original amount scheduled for filed unsecured claims.

Option 1 is more likely than 2. Ask your attorney if there are any precedence cases in your area, or if he can lobby the Trustee for #2.

DO NOT offer to increase plan payments unless you're already paying 100% to unsecured. As stated above, you're supposed to be paying all of your disposable into the plan for 36 months. The only time you're not required to do that is if you're paying everybody back everything you owe them. If you're not, and offer to pay more to shorten the term, the Trustee can audit your case, require that you increase your payment and your % to unsecured with no reduction in term.

To check your case's % to unsecured, go to the following site and scroll down to see if your Trustee is a participant:

[url]https://www.ndc13.com/[/url]

If he is, enter the site, put in your case number, answer a few questions and get e-mailed a password and user ID. You then go back to the site and re-enter to get your specific case info. It's only 3 pages and on one there's a line entry item for "percent to unsecured". If you're already at 100%, you can have your plan shortened with no problems.

Last but not least, you have to make sure NONE of your secured or priority unsecured creditors are amoung those who DIDN'T file a claim. These will survive Bk and can create havoc, so you have to flush them out and, if need be, have your attorney work with the Trustee to file a claim for them.