Chapter 13 payment increase!

[flashoflight]

The FIL could buy the non-exempt portion of the husband's interest from the trustee and then the myriad of options to stay in 13, convert to 7, or dismiss and refile 7 would be available. The lawyer waiting until the last second was not good, but maybe it was a blessing in disguise with an unconfirmed plan/balance on hand since hubby still has no job due to COVID.

[VolFan]

Hi Witchywitch,

I was in a very similar situation when I filed BR. I had a parent who had added me to the family home deed years before I filed, all to ensure that someone else would be on the deed if anything happened medically, etc. (really dumb, in retrospect). When it came time to file I had to claim half the equity in the home, even though I never thought of it as my house and didn't live there; as my attorney said, "It's the letter of the law they care about." In the end it didn't matter in my plan (too much non-secured debt thanks to student loans), as I would be paying back way more than the non-exempt equity over 5 years.

Hopefully you can come to a solution that works for everyone, and still allows relief in a BR plan. Good luck.

[Witchywitch]

Hi Witchywitch,

I was in a very similar situation when I filed BR. I had a parent who had added me to the family home deed years before I filed, all to ensure that someone else would be on the deed if anything happened medically, etc. (really dumb, in retrospect). When it came time to file I had to claim half the equity in the home, even though I never thought of it as my house and didn't live there; as my attorney said, "It's the letter of the law they care about." In the end it didn't matter in my plan (too much non-secured debt thanks to student loans), as I would be paying back way more than the non-exempt equity over 5 years.

Hopefully you can come to a solution that works for everyone, and still allows relief in a BR plan. Good luck.

We actually claim half of the house equity because we know "legally" half of it is in his name. What we are trying to figure out is the payment we are making every month to my FIL. The trustee thinks we don't have to do that and want us to add that amount in our monthly BK payment.

Hopefully it all works out since my FIL does not have any means of income but our payment and his Social Security.

Thanks!

[Witchywitch]

The FIL could buy the non-exempt portion of the husband's interest from the trustee and then the myriad of options to stay in 13, convert to 7, or dismiss and refile 7 would be available. The lawyer waiting until the last second was not good, but maybe it was a blessing in disguise with an unconfirmed plan/balance on hand since hubby still has no job due to COVID.

Hi! I talked to them and they actually re-scheduled the confirmation till Sept. Hopefully we could come up with a solution by then that is acceptable for both parties.

Or, we could win lottery! Wishful thinking!

Thanks!

[justbroke]

What we are trying to figure out is the payment we are making every month to my FIL. The trustee thinks we don't have to do that and want us to add that amount in our monthly BK payment.

The Chapter 13 Trustee would want proof of the payments without a single missed or returned payment. This would likely need to be shown through checks/debits from a banking account since cash is hard to prove. Additionally, the Trustee is correct in that your spouse has 0 legal responsibility to pay the FIL some fixed amount every month.

The lack of the legal requirement to pay the FIL is the real crux of the issue. Not only is there equity, but it "looks" like a gift. I'll also assume that there is no "lease" or other document which shows the terms under which this agreement was made.

It's interesting and I hope that your attorney can fashion something that works.

[flashoflight]

Witchywitch If your FIL cannot survive without your "rent payment", maybe try this angle instead which is the approach I took in my case in an elderly parent residing at assisted living with no trustee objection:

From the means test line 35:

Line 35, Continued contributions to the care of household or family members. ! Includes only actual, not anticipated expenses. ! Family member must live with the debtor or be a member of the debtor’s immediate family, i.e., parent, grandparent, sibling, child, grandchild. ! Elderly, chronically ill, or disabled person must be unable to pay the expense.

Schedule J only lists support for those living outside the home on line 19, but I assume you can put this in "Other".

Keep in mind this doesn't help solve the equity problem.

[justbroke]

I like that way, flashoflight, but worry about changing the reason "why" the debtor is giving $$$ monthly to an elderly parent. If the Trustee is "nice" I suppose the Trustee could say the reason -- supporting an elderly parent -- is sufficient to not raise the payment by that amount. But, this is another tool in the box that the attorney could consider in the grand scheme.

[Witchywitch]

Update on our case!

Sorry have been very busy and my mind all over the place.

To make the long story short, the lawyer did not communicate with us after discussing that the hearing has been moved and listening to our concerns about the extra payments.

Did not hear a peep for more than a month and just found our from PACER that we were starting to pay $1800++ every month starting next month and case was confirmed. It is just a very direct order. I guess that silver lining is that we don't have to give the trustee our tax refund. Computing everything we will pay roughly about 80% of our debt.

Sent an e-mail to lawyer a week ago after realizing that and never heard any response.


Yay us! I am so disappointed with the lawyers we hired!

[justbroke]

I'm not saying that your lawyer dropped the ball, but if they were holding a ball it seems to have slipped from their fingers. How are you doing? Are you guys going to be able to make that payment?

[Witchywitch]

I'm not saying that your lawyer dropped the ball, but if they were holding a ball it seems to have slipped from their fingers. How are you doing? Are you guys going to be able to make that payment?

I guess my point is the lawyers should at least communicate and not just left us out like that. Not even answering e-mail or explanations as to what happened.

It sucks. Thanks for asking. I guess, we don't have any other choice because the lawyer does not even communicate weeks before or after the confirmation. I don't know what will happen. Hopefully we'll get through it. I just feel sorry for my kids.

[justbroke]

Yes, they should have and I'm not happy that your attorney doesn't communicate well. Especially when it's pre-confirmation and you're trying to determine the final payment.

[NoMoney30]

Mine didn't double...but it went up by 900 dollars. It was either that or submit the new proposal my lawyer had done which was 1400 more a month. We are barely hanging in there lol. I'm about 1.5 years in now.

[Barbisi]

NoMoney30, if it's any consolation,we are in the tail end process of a contested BK13 payment increase which likely now will include lawyer fees paid outside the plan (otherwise we would probably have to pay as much as the original modification amount. Then what's the point of objecting at all?)
Although I fully commiserate with your struggle, I am relieved that others seem to be getting the shaft as well! Remember misery loves company LOL! Good luck!
For some on these forums, BK13 is paradise, for others it's Hades incarnate.
Witchywitch, I'm sorry you appear to have such a wretched lawyer. Our attorney ,all faults aside, does reply and never really ignores us!
Your payment is certainly more than we could ever pay- our mortgage is $2400 alone ! By contrast we can't even pay back 50% of the confirmed claims- we're at about 35%+ .We would have to let the house go in foreclosure and live on the street to pay that!
I do hope it all works out somehow for you and you are able to finish this harsh 5 years sentence. Best of luck in making it through!

[NoMoney30]

NoMoney30, if it's any consolation,we are in the tail end process of a contested BK13 payment increase which likely now will include lawyer fees paid outside the plan (otherwise we would probably have to pay as much as the original modification amount. Then what's the point of objecting at all?)
Although I fully commiserate with your struggle, I am relieved that others seem to be getting the shaft as well! Remember misery loves company LOL! Good luck!
For some on these forums, BK13 is paradise, for others it's Hades incarnate.
Witchywitch, I'm sorry you appear to have such a wretched lawyer. Our attorney ,all faults aside, does reply and never really ignores us!
Your payment is certainly more than we could ever pay- our mortgage is $2400 alone ! By contrast we can't even pay back 50% of the confirmed claims- we're at about 35%+ .We would have to let the house go in foreclosure and live on the street to pay that!
I do hope it all works out somehow for you and you are able to finish this harsh 5 years sentence. Best of luck in making it through!

LOL yes, misery loves company. I have a whole myriad of posts on here about how terrible my experience was. I paid for a lawyer I thought I was getting then he pawned me off to this jr idiot (I have a complicated case) and he totally screwed me. Mine doesn't really respond to email and he actually made me cry one time haha. I make like 140k a year and he basically shamed me and told me I should be so lucky and to suck up my 2,900 a month payment. Part of it was my fault cause I filed like right in the middle of too many changes on my paystubs, but they should have told me to wait! They even told me to make some of the changes (ie: increase my 401k to 4%). Anyhoo...a good lawyer is really key to every thing.

Even now I have to go through the paralegal for everything and most of the time she never answers my emails even after I poke her days later. My mortgage payment is 2,500 a month and my bk payment is 2,900 ... 2 days after I get paid I'm already broke.

But yea, hopefully the OP is slightly comforted that some of us also got shafted by crappy attorneys.

[Barbisi]

Our lawyer told us he "rarely ever saw" such a high unsecured petition amount ($134,000,$109,000 of which actually made it into the confirmed final amount) So he was trying to "shame" us about the CCs used to fix up a money pit that we lost 100K on. (See my many posts about how we landed in BK13!)
Well, those of us caught in this quagmire can only hope it all ends with the 60th payment!