Is it common for a trustee to demand a budget review 7 months before discharge?

[SandyW]

I was just wondering this. Yesterday, my husband pulled a notice from the mailbox stating that the trustee is requiring a new budget review. We must comply or she'll file for a dismissal. Our last payment for our chapter 13 should be around October 15th of this year. The only reason I'm asking is the last review we had was so stress filled that I stopped writing and my income has dropped substantially because of it. I think it would ultimately help us because of the income loss, but the last review was so stressful I didn't write for nearly a year afterward. I've finally begun to write again and here she is calling for another review.

Also, is it common for them to basically call you a liar about where your income is going even after you produce receipts and other proof of budget needs? This trustee dragged our last review on for nearly three months because she "didn't believe" how much we spent on fuel to drive 50 miles one way to work 5 days a week in a minivan. They also wanted to know why our adult children still lived with us. In these economic times no one can make ends meet on one part time job and our daughter is disabled.

Is there a way to file a complaint against a trustee or would that just make us look like whiners who don't want to pay back what we owe?

[justbroke]

I wouldn't file any complaint. It is the Trustee's job to make sure you pay "all disposable income" into the plan if you are not paying back your creditors 100%. Having wrote that, it appears that you have expenses that are outside the norm for your average debtor; e.g. your high fuel expenses. While it reads that you have a "tough" Trustee, it also reads as though that Trustee isn't doing anything malicious.

I have never had or hear of a "budget review" required by a Trustee. Do you own and operate a business and are self employed? If so, then this is standard to request business records.

As for adult children, it's a toss up. The question is always "why should the unsecured creditors be affected because you have no "legal" obligation to your adult children?" So I'm thinking the issue is really about supporting adult children. One of your children is disabled, so that shouldn't even be a question. The question may be the other adult child. Who knows? Only the Trustee can answer that question.

Do you have an attorney?

[SandyW]

Thank you for your reply!

Yes, I am self employed to an extent. I am a published author with 1099s. However, we have been remitting our income taxes every year. Unfortunately, our tax documents have shown a steady decrease of writing income every year.

Yes. We have an attorney and the attorney always seems to agree with the trustee in these instances, even though they have seen our figures and agree that we aren't asking for anything more than we should.

I think our payback is set at about 70%. It just seemed strange to ask for a review now when the payment schedule will be done in less than a year. Also, we're making approximately 6000.00 a year less now than when we filed the budget they have set up, due to the fact that the last review stunted my creativity and I haven't written nearly as much as I should have. I'm a romance author and it's difficult to write romance when you're so stressed.

Like I said, I think it will ultimately end up helping us as it will show that they 850.00 a month they are taking is more than we can afford. I would have kept on with the payments where they are just to avoid the stress of another review, though.

[justbroke]

I can certainly understand your frustration. I can read that frustration in your posts. Unfortunately you have a strict Trustee that loves to audit the self-employed. It is very typical to provide business records each year (or even quarterly) when you're self-employed, but I think you may have been subjected to a little more scrutiny than others. It's a totality of circumstances and unfortunately the Trustee seems to believe that there is more money. It's hard to understand why they don't believe you, but this does happen. Your attorney is not so much agreeing that you have more money than s/he is agreeing that business record audits are a requirement under your specific circumstances (self-employment income).

It's 7 more months and you can do this. You indicate that you'll be able to show a decrease in income.

[SandyW]

Yes, we can. We can also provide an estimate indicating we need roof repairs. An initial estimate is 10k., but that's to replace the entire roof. We're hoping we can get it fixed for less than that. Our insurance company is not forthcoming. Any repairs will have to come from a budget that did not include an allowance for this contingency. The roof is 13 years old. It should not need such extensive repairs, but it's a mobile home, and apparently very poorly put together. Should we include this estimate in the review or leave that well enough alone? As it is, the decking for the first 18" around the edge all the way around is rotten and needs replaced along with various spots farther up toward the peak. My husband was actually able to peel the decking and shingles back and look at the studs which are also rotten.

[LadyInTheRed]

Include the estimate. It can't hurt.

I'm sorry you have to deal with such a hands-on trustee. Provide the information you need to provide and then try to forget about it. It doesn't sound like you have anything to hide or anything that has changed that would increase your plan payment. Like you say, it could work in your favor. So, try not to focus on it.

You are so close to done! Think of what life will be like 8 months from now. Maybe that can provide some inspiration.

[SandyW]

Thank you, LadyInTheRed. We have been thinking about it. It is what has kept us going through all of this. Even through the fact that we had lowballed all of our costs, because we'd never kept ourselves on a budget before. We had no idea our medical costs would double three years ago and that our furnace would break down, our cars would cost over 2000 a year in repair costs and the heat tape on our pipes would quit working and our pipes would freeze. We haven't had a Christmas or Birthday gift in the last four years. It shouldn't be like this. Still, it's over in less than a year. We can do it. We have to.

[dmc-2008]

Sandy, yes this could actually work in your favor. Add it all to the list and do not forget to show medical and car repair reciepts too. Get this to that trustee and get this done! You got this. !!!! Xoxo

[159515951]

Do you have a 36 month or a 60 month Plan? The Trustee is only obligated to monitor your disposable income for the first 36 months of the Plan.

[SandyW]

Do you have a statute number for that? I would love to quote this to my attorney who has informed us that if we do not comply, the trustee has threatened to dismiss. This trustee threatens to dismiss at least twice a year. It's not as though we're missing payments or anything, they're taken out of our paychecks and sent to her electronically. We don't even see the money. I'm so sick of her I could just throw up.

Do you have a 36 month or a 60 month Plan? The Trustee is only obligated to monitor your disposable income for the first 36 months of the Plan.

[out4good3]

Sounds to me like this trustee doesn't have much to do if she's auditing your disposable income twice a year.

[159515951]

Do you have a statute number for that? I would love to quote this to my attorney who has informed us that if we do not comply, the trustee has threatened to dismiss. This trustee threatens to dismiss at least twice a year. It's not as though we're missing payments or anything, they're taken out of our paychecks and sent to her electronically. We don't even see the money. I'm so sick of her I could just throw up.

My understanding (I'm not an attorney) is that the Trustee is not required to monitor disposable income after 36 months, so most do not. However, it is the Trustee's discretion to do so if they choose. It sounds like your Trustee is choosing the aggressive route.