Filed Ch 13 Pro Se (Early Stages) Creditor Objection Question

[CH13ProSe101]

First off, I will thank you in advance for your thoughts on this. We filed Ch 13 Pro Se January 2016, today Feb 22 I received a letter in the mail from an attorney of a creditor. The creditor is from a secured vehicle loan. They are filing objections on a few different grounds.
1.) Debtors' plan does not provide for interest on the claim of creditor.
2.) Debtors plan fails to provide an interest rate in compliance with the guidelines of the supreme court in Till v. SCS Credit Corp., and said creditor is entitled to at least 5.25%.
3.) Creditor also objects to paragraph 8(b) of debtors' plan in that, pursuant to 11 U.S.C. 1325 (a)(5)(b) creditor shall retain its lien on its collateral until the earlier of the payment of the underlying debt determined by nonbankruptcy law or discharge under section 11 U.S.C. 1328.
4.) Creditor is entitled to recover its attorney's fees and costs incurred herein. Whereas Creditor respectfully requests that confirmation of the plan be denied, and for such relief is as just as proper.

So, they are objecting to the plan because I slipped up, and did not include interest. I guess I missed that rule.I thought I educated myself pretty well before doing this, but not good enough I see. So what's my game plan in avoiding paying them attorneys fees. I see we will have to adjust the plan to include an acceptable interest rate, fair enough. But how can I get out of paying their attorney's fees. Are they trying to shake me down because they see we filed Pro Se? Perhaps they think that since I don't have a lawyer I don't have a spine and won't fight back? Anybody have some constructive advice here? Once again thanks for taking the time to look at this one. Also, since I did infact file Pro Se, and all the paper work has been submitted already, is it too late to lawyer up just incase? I really enjoy the idea of representing myself, but perhaps I need to swallow my pride? Fair warning to anybody filing Pro Se, this is a very tedious process lol. Papers for days guys and gals.

[despritfreya]

1. Secured creditor is entitled to interest under Till. Till rate is determined on a case-by-case basis. In my district the typical Till rate is between 4 and 5% so, 5.25% is a bit high. Offer 5% to settle.

2. A secured creditor is not entitled to attny fees unless it is over-secured. See 11 USC 506(b). So, no attny fees unless the vehicle is worth more than what is owed. Is it?

Des.

[CH13ProSe101]

Thanks for the reply. Yes the vehicle is worth more than is owed. Had to play the wildcard exemption on the equity. What kind of dollar amount do you guess they are going to try and pinch us for fee wise to cover attorney costs? Minimal in the hundreds or are we talking serious money possibly? I don't care if it's peanuts, but if we're looking at thousands then something will have to be done. Also, any idea if I can hire an attorney to represent my case even though I've already filed? Just incase they do go after me for a silly amount of money in fees?

[despritfreya]

You need to communicate with the attny for the lender. My guess is legal fees will be between $500 and $800. Should not be a "fortune".

If you can resolve the objection and there are no other issues I see no need to hire an attny. Call the creditor attny and work it out.

Des.

[justbroke]

In our District, most of those fees are "a la carte" -- as one Judge calls them -- and they are typically $350 for attorney fees for a simple single-hearing item.

As I write in my blog on filing Chapter 13 as a pro se, the vehicle and home mortgage lenders are the toughest, but you MUST actually talk with them and work out the details of the plan. As despritfreya wrote, you can talk to them about fixing the Till Rate (I did 4.250% unless the creditor balked and then I'd just give them 5.25% to shut them up). You have to work with the creditor attorneys because you are the "attorney of record" and you are the only person they can deal with. As despritfreya wrote, I'd offer the lowest Till I can get... maybe maxing it at 5.00%.

( despritfreya the Till rate in our District is 3.25% to 5.25%. Rarely do I see any at 3.25%, but I did get 2 of my vehicles at 4.25% and one at 5.25%... so it may differ in the District. However, writing that they are entitled to "at least 5.25%" is absurd. The maximum Till rate is 5.25%. )

[LadyInTheRed]

One thing to think about is whether the interest rate will make any difference to you. Will increasing the interest rate increase your plan payment, or will it just mean that less goes to unsecured creditors? My attorney used a rather high interest rate on my car loan which more than doubled the original contracted rate. I was about to object to my attorney until I realized that it made no difference to me. A lower interest rate would just increase what goes to the unsecured creditors.

If adding interest will only decrease the payment to unsecured creditors and won't make any financial difference to you, perhaps this is a good negotiating tool. Offer a high interest rate in exchange for them dropping their claim for attorneys fees.

The only way to know if an attorney would come in at this point to handle this is to start making some calls.

[CH13ProSe101]

I think I will just offer them the original interest rate that originated with the loan. 6% instead of the minimum 5.25% even though there's not that big of a swing.

[justbroke]

There is no minimum of 5.25%... that's the maximum in every District that I know. I would amend the plan and put 5.25% and if you talk with the creditor, let them know that's the maximum Till rate.