"We Made a Mistake... You May Pay For It."

[Questioner]

My gf filed for, was granted, and has been making payments on her Ch13. These payments were autodebited from her payroll check.

However, she was recently informed that the incorrect amount was being charged, and she was liable for the difference, to the tune of $1,500, due in four days.

My question is: is this legal in that type of circumstance?

Apologies if not the correct forum.

[justbroke]

I hope she is working through an attorney. If the monthly payment to the Trustee was incorrectly calculated, then you can appeal to the Trustee to fix this over some period of time (think several months). If the Trustee still won't budge, I've seen Judges that work really ahrd to make sure Chapter 13 debtors stay on track. The Trustee makes no money if the Debtor is not in a plan, so it's to the benefit of the Debtor, Trustee and the creditors to get this straightened out.

Since this is all third party information, I have no information as to whether, the Plan was wrong, the amount auto-debited was wrong, who set the amount, when did the Trustee discover the issue, and/or has the debtor worked with their attorney.

[dmc-2008]

Sheesh!!! Their mistake!!!!

[Questioner]

Thanks for the quick reply.

She will be speaking with her lawyer shortly, but as I understand, the Trustee set the payment, as directed by third parties. She also has judge contact info, in case anything else goes sideways.

All that is clear is that she has made a good-faith effort to pay her debt, and is working to correct the issue.

Very frustrating, though.

I hope she is working through an attorney. If the monthly payment to the Trustee was incorrectly calculated, then you can appeal to the Trustee to fix this over some period of time (think several months). If the Trustee still won't budge, I've seen Judges that work really ahrd to make sure Chapter 13 debtors stay on track. The Trustee makes no money if the Debtor is not in a plan, so it's to the benefit of the Debtor, Trustee and the creditors to get this straightened out.

Since this is all third party information, I have no information as to whether, the Plan was wrong, the amount auto-debited was wrong, who set the amount, when did the Trustee discover the issue, and/or has the debtor worked with their attorney.

[Questioner]

Indeed. Thankfully, they won't be in the position to apologize, since they are a 'wronged party.' We would not want to heep additional sadness on them ;)

Sheesh!!! Their mistake!!!!

[Questioner]

Late update, as things took a while to finalize. The collector has moved for, and been granted, eviction from oroperty.

They chose not to allow for repayment of funds owed, after acknowledging they were at fault for payment amount. My gf has a meeting with a lawyer this week, but it doesn't look good.

She has owned the property since she was 18. It's eating her up.

[Questioner]

Final update: eviction granted. No reason given, judge criticized my gf for unwillingness to pay $2,000 to bring account to good standing, said nothing of miscalculation by debt collector.

[LadyInTheRed]

Um, there seem to be a lot of details missing here. Your first post made it sound like the plan payments that were being made through payroll deductions were incorrect. Now it sounds like it was payments that the trustee was making to a creditor was incorrect. You refer to eviction from property that your gf owns. Do you mean the bank is foreclosing on a mortgage? Are the funds owed for pre-petition arrears, or post petition payments? Was the trustee supposed to be making arrears payments and post-petition payments? What was in the Chap 13 plan compared to the payments actually made? What does your gf's attorney have to say about the situation?

The trustee does not set the plan payment or any payment. The debtor proposes the plan which includes who makes what payments. The trustee may object to that plan which may cause modifications. Eventually, the judge confirms the plan and that determines what payments the debtor makes to the trustee, what payments the trustee makes to debtors and what post-petition payments the debtor must make directly to the creditors. The proofs of claim filed by the creditors together with the plan, determines how much each creditor gets paid by the trustee. Any post-petition payments on secured debt not paid by the trustee are the responsibility of the debtor.

Whatever the problem is, it should not be a mystery. Your gf's attorney should have advised her exactly what was going on. The $2,000 problem should have been resolvable.

Something is not right. With the confusing information available, it is impossible to know what that something is. But, with the judge's criticism, it sounds like perhaps this was post petition payments that the plan did not require the trustee to make, that the creditor filed a petition for relief from stay and it was granted. Is that what happened? Could it be that a payment of $2,000 to the creditor (plus expenses probably) would prevent foreclosure?

[Questioner]

That's my fault, I conflated terms and left out info while 'typing angry.'

The payroll deductions were calculated incorrectly by the debt holder. The trustee made appropriate timely payments.

The property on which the home sits was covered by the bankruptcy; the bankruptcy is being dismissed under cause "failure to make payments."

The incorrectly drafted amount left out $2,000 as of this month, according to filing to dismiss. Lawyer attempted to work wth debt holder to have drafted amount increased for a period to erctify the imbalance. In the ruling, the judge decided that the amount set for draft should have been more carefuly scrutinized by all parties, and as the filer, my GF was in part responsible for underpayment of accepted debts.

Um, there seem to be a lot of details missing here. Your first post made it sound like the plan payments that were being made through payroll deductions were incorrect. Now it sounds like it was payments that the trustee was making to a creditor was incorrect. You refer to eviction from property that your gf owns. Do you mean the bank is foreclosing on a mortgage? Are the funds owed for pre-petition arrears, or post petition payments? Was the trustee supposed to be making arrears payments and post-petition payments? What was in the Chap 13 plan compared to the payments actually made? What does your gf's attorney have to say about the situation?

The trustee does not set the plan payment or any payment. The debtor proposes the plan which includes who makes what payments. The trustee may object to that plan which may cause modifications. Eventually, the judge confirms the plan and that determines what payments the debtor makes to the trustee, what payments the trustee makes to debtors and what post-petition payments the debtor must make directly to the creditors. The proofs of claim filed by the creditors together with the plan, determines how much each creditor gets paid by the trustee. Any post-petition payments on secured debt not paid by the trustee are the responsibility of the debtor.

Whatever the problem is, it should not be a mystery. Your gf's attorney should have advised her exactly what was going on. The $2,000 problem should have been resolvable.

Something is not right. With the confusing information available, it is impossible to know what that something is. But, with the judge's criticism, it sounds like perhaps this was post petition payments that the plan did not require the trustee to make, that the creditor filed a petition for relief from stay and it was granted. Is that what happened? Could it be that a payment of $2,000 to the creditor (plus expenses probably) would prevent foreclosure?

[LadyInTheRed]

This still isn't making sense. I assume that by "debt holder" you mean the creditor and the payroll deduction you are referring to is the plan payment made to the Chap 13 Trustee. It is not the creditor who calculates the payroll deduction. The payroll deduction should be equal to the plan payment which is calculated by the debtor's attorney and perhaps later modified with the full knowledge of the trustee and the debtor (or at least the debtor's attorney even if the attorney doesn't communicate well with his client). The creditor has no power over the wage deduction.

Was the plan actually confirmed? Or did this issue keep the plan from being confirmed?