When does the trustee stars paying Creditors?

[anunezal]

Hi All,

I started my Chapter 13 in January this year. So Far I have made 5 payments. When I look at the NDC webpage, and look at the distributions. I only see the payment towards the trustee (10% of my payment). But No payment so far to any of my creditors. Does anybody knows when does the Trustee start paying the Creditors? Just wondering as I have paid close to $14,000 so far, and nothing has been distributed. Thank you.

[justbroke]

The Chapter 13 Trustee will generally not make any disbursements (payments) until the Chapter 13 Plan has been confirmed. In some case, the Trustee may make "adequate-protection payments" to secured creditors such as a mortgage or vehicle creditor. In my case, they didn't pay my auto loans until confirmation (in big lump sums) but they did start paying the mortgage quickly.

As I tell everyone, don't worry about when, how, or how much the Chapter 13 Trustee pays and to whom they pay. It does not affect you.

This is actually quite the norm.

[shipo]

The Trustee in my case didn't start paying my creditors for nine months. I assume it is different by region and Trustee.

[anunezal]

The Chapter 13 Trustee will generally not make any disbursements (payments) until the Chapter 13 Plan has been confirmed. In some case, the Trustee may make "adequate-protection payments" to secured creditors such as a mortgage or vehicle creditor. In my case, they didn't pay my auto loans until confirmation (in big lump sums) but they did start paying the mortgage quickly.

As I tell everyone, don't worry about when, how, or how much the Chapter 13 Trustee pays and to whom they pay. It does not affect you.

This is actually quite the norm.

Thank you for the reply. I actually got confirmation at the end of April. I only have Credit cards in my debt, no other debt. And as I am in 100% plan I would like to see it moving to get out as soon as possible (maybe making extra payments when I can). But I guess, I just need to wait. Thank you

[justbroke]

The Chapter 13 Trustee has wide latitude to make payments. My Trustee, for instance, makes $0 in payments to unsecured creditors until the a few months before end of plan in large chunks.

I tell everyone to concentrate on keeping off the Trustee's radar; pay on time and try to enjoy life.

I also recommend that those in a 100% Chapter 13 plan not make extra payments. You should have six (6) months of reserves (rent, car, food, clothing, etc) before even thinking about considering making any extra Chapter 13 payment. Having that reserve is extremely important because... life happens. The Chapter 13 Plan and Chapter 13 Trustee will not care if life happens to you.

[anunezal]

The Chapter 13 Trustee has wide latitude to make payments. My Trustee, for instance, makes $0 in payments to unsecured creditors until the a few months before end of plan in large chunks.

I tell everyone to concentrate on keeping off the Trustee's radar; pay on time and try to enjoy life.

I also recommend that those in a 100% Chapter 13 plan not make extra payments. You should have six (6) months of reserves (rent, car, food, clothing, etc) before even thinking about considering making any extra Chapter 13 payment. Having that reserve is extremely important because... life happens. The Chapter 13 Plan and Chapter 13 Trustee will not care if life happens to you.

Thank you. That is a really good advise. My plan will be to save as much as I can, then once I have save enough to complete the plan, I will make the last big payment. Before that one, I will just have them as reserve. Thank you!

[shipo]

Thank you. That is a really good advise. My plan will be to save as much as I can, then once I have save enough to complete the plan, I will make the last big payment. Before that one, I will just have them as reserve. Thank you!

A few comments:

• Having just completed a 60-Month Chapter 13 (with 18-Months more tacked on to the beginning when my financial world collapsed and I had to resort to cash only), I understand your desire to be released from credit prison.
• Regarding paying the Chapter 13 off early, the huge benefit for that will be an early start to rebuilding your credit.
• Unfortunately, my understanding is, the 7-Year window of having a Chapter 13 on your record will not change one whit, it will stay on for the full 7-Years from your date of filing.
• As I've related a number of times here, during my Chapter 13 I was able to establish a small rainy day fund, just in case; as justbroke wrote above, "life happens"; in my case, my daily driver, a 16 year old Honda Accord rusted to the point where it needed two to three-thousand dollars of repair work to make it road legal (fuel leaks, corroded radiator, rusted fuel tank, rusted brake lines...). Just into my fourth year of my Chapter 13, I had to buy a new(er) car, and that took not only my entire savings account, but most of my food money for the next month or so; yeah, beans and franks were my staples for a while.

Long story short, guard your money carefully, it will make no difference whether you pay a little off here and there, or if you save your money and pay it off in one swell foop, the money will be the same either way. What may not be the same is if you run into a bind and need some spare cash for an unexpected expense.

[anunezal]

A few comments:

• Having just completed a 60-Month Chapter 13 (with 18-Months more tacked on to the beginning when my financial world collapsed and I had to resort to cash only), I understand your desire to be released from credit prison.
• Regarding paying the Chapter 13 off early, the huge benefit for that will be an early start to rebuilding your credit.
• Unfortunately, my understanding is, the 7-Year window of having a Chapter 13 on your record will not change one whit, it will stay on for the full 7-Years from your date of filing.
• As I've related a number of times here, during my Chapter 13 I was able to establish a small rainy day fund, just in case; as justbroke wrote above, "life happens"; in my case, my daily driver, a 16 year old Honda Accord rusted to the point where it needed two to three-thousand dollars of repair work to make it road legal (fuel leaks, corroded radiator, rusted fuel tank, rusted brake lines...). Just into my fourth year of my Chapter 13, I had to buy a new(er) car, and that took not only my entire savings account, but most of my food money for the next month or so; yeah, beans and franks were my staples for a while.

Long story short, guard your money carefully, it will make no difference whether you pay a little off here and there, or if you save your money and pay it off in one swell foop, the money will be the same either way. What may not be the same is if you run into a bind and need some spare cash for an unexpected expense.

Thank you very much. Very important leanings. I was hoping that the Bankruptcy will go away 2 years after completion, no 7 fix years from starting. In that case, it make no sense to pay ahead at all. Thank you.