Question Seesaw Payment Increase + Lawyer Fees = How will we pay the Total Amount?

[Barbisi]

The attorney contested the $460 monthly increase (as posted on another thread) and now the payment will be $90 less . But we have to come up with $371 more now to make up the payment for Sept. ($930 total). That is going to be rough enough but now we appear to be on the hook for even more money than what was proposed last month to begin with!
We just learned that instead of the creditors paying the lawyers' fees to defend us from the original $1200+ new demanded payment, most likely we will have to pay these fees ourselves!!!!! (supposedly the creditors are guaranteed $5000 more so the fees can't come out of this increased payment.) The counter proposal says the trustee and creditors will be "satisfied" with a minimum $5k increase, but does not rule out further increases in the future .
I assume his fees may be thousands of dollars - I don't think we can pay $$$$ more per month or whatever he charges, esp. when we couldn't afford the $1200+ in the first place! (Post edit: my husband spoke with the attorney just now - he's spent around 5 hours on this case.) His fee is $300 per hour , so we may owe him $1500.
The attorney claims he will contact Hyatt Legal to "see" if they will pay his fee. However, I am doubtful this will happen since HL was only offered at R. (which laid my husband off in Jan. 2019 and LM offers a different legal plan.) We have not paid fees to HL since Jan.2019.
This nightmare just keeps getting more and more complicated and stressful every time we contest anything this trustee does to us, no matter how unfair!
I have a 2k+ surgery next month to look forward to as well!
Will this hell ever end?

[Zombie13]

Ok so spoke with our attorney to get clarification. Our monthly payment will be $930 per month. Regarding attorney fees for their time during this plan modification, they estimate 4-5 hours of their effort, at $300/hour = $1200 - $1500 (if he would even charge us for the time). The attorney is going to see if the plan will pay. They stated, 'R' has switched legal plan companies. Additionally, the attorney will ask the trustee, if we can pay the extra $371 for month 43 (September) over a 3-6 month period, vs. paying it in full now. So, at this time, our plan is to make the payment for $930, and make an additional payment between $50 and $371. Since the payment is due on the 10th of October, I plan to wait til no later than Oct. 5th to make the payment online. This provides two weeks from today, for the negotiation resolution.

The trustee wants an additional $5000 over 18 months. That's $277.78 per month (round up to $278). $371 - $278 = $93 more. So.... hm... The trustee's 10% monthly fee is 10%, so that would be $50. So, where is this extra $43 going? I asked the attorney who said it appears to be the trustee's fee. Whatever. I am so done with this. :-\ What do you think? What is the $43 for? Sounds like 'cream', unless I get a more thorough explanation.

Yes this is extremely stressful, especially with the upcoming surgery for Barbisi. But, we finally got an answer, and we can plan, and move forward. I'm done. Done, see? So. Done. I'm Done. Aaaand let's review. I. Am. Done.

[justbroke]

There's no way to guess at these things without looking at the actual plan modification order. The Trustee should take the attorney's fees as an administrative claim (for attorney fees) and take it from the unsecured pool (and paid pro-rata over time).

[Barbisi]

Thanks jbfor replying but it sounds like the attorney's fees are excluded from this counter proposal because there is a minimum fee to be paid to the creditors leaving us to be rooked yet again!
No wonder we aren't quite enjoying our BK13 like everyone seems to be on these forums!
As you said before, the trustee is the only one winning!
When you bet against the house, you always lose!

[justbroke]

Oh, your plan base is based on the"Chapter 7 liquidation" test where that value is greater than your disposable monthly income (DMI). In that case, I would think that attorney fees (new) should still be added as an administrative claim and paid out over the rest of the plan. At least that's how I would have approached it.

[Barbisi]

Hey, jb, I don't see see how we can do that since this lawyer already said that his fee would be additional -I don't know how to get him to do that when he claims all this increased payment "has" to go to the creditors! He knows we don't have hardly any money to pay him and he already said $1020 for the total increased new payment was too much and not doable.
I don't know what our BK7 liquidation amount would be (I knew we had to pay at least what the court would have gotten in a Chapter 7, but I don't know what that amount would be!)
The trustee originally wanted about $400+ more when we filed, so obviously he was never pleased with what he settled for in 2017 , hence this increase now. He always thought we could pay so much more .
This lawyer is very dense and hard to communicate with (think: a Bernie Sanders -style BK13 attorney, complete with the Bronx/Brooklyn accent).
I know we are being ripped off by every body, but I don't think we can win any more.
I wish you were our lawyer - you'd get us treated fairly ,instead of this raw deal!

[Zombie13]

I am glad the waiting-for-an-answer is finally over. No more time spent pulling together data, no more waiting, no more wondering, hopefully no more anxiety. Now, we can move forward with other aspects of our life. For me, it's difficult to think about current and new prospects when someone else's decision that has a significant impact on our life is looming. We can focus on tasks we had to set aside to deal with this, for the past 6 weeks or so.

[justbroke]

Yes, by additional, and paid out, I mean you take the attorney fee as an additional administrative claim to be paid over the remaining plan duration. So if you have 24 months left, and the fee was $2,400, then it would be $100/month EXTRA that you pay towards the administrative claim... over those remaining 24 months.

I am not saying that the administrative claim comes from any portion of the existing unsecured pool. I am amortizing that administrative claim over the remaining months.

[Barbisi]

Thanks jb!
I think adding the lawyer fees to the $930 new payment would just allow the trustee to collect an additional administrative fee. I think paying the attorney separately is all we can do.
We shall see what further increases lay in store for us next year. This should end with the 60th payment in Feb.2022 (unless the trustee finds a way to lengthen our five year plan to make us pay more to the creditors.)

[justbroke]

Fortunately, the plan length can't be involuntarily extended beyond 60 months. There's the special new except for COVID, where the case can go to 84 months, but that is voluntary. Trustee doesn't hold that power. That doesn't mean that, at the end of the payment period, that the Trustee figures that you didn't pay the base plan amount. It happens, but usually because someone dropped the ball or the base plan amount is wrong.

(I had an issue with my base plan amount when it wasn't updated to reflect the divorce. It took me two tries to get the Trustee to change that amount. I know that is the amount that they are "watching" and is the base amount that a debtor needs to pay.)

[Barbisi]

Well jb, I guess we'll just have to wait (and hope) we will pay enough to satisfy the base payment amount (what ever that is!)
I definitely don't expect an easy discharge or easy closing -we'll have to fight tooth and nail to regain our financial freedom -maybe it'll take years like the guy who said his BK13 will never end (I forgot his user name and thread title.) LOL

[NoMoney30]

Ugh you poor thing! So why did they try to increase you? Were you confirmed already or was it before confirmation? I wasn't confirmed when the trustee was like whoa whoa she has more income!!! I'm like excuse me? They tried to tell me I had like 1000 extra bucks after my raise which actually made my net pay lower (healthcare went up and taxes). So, yea I had 1000 more a month when my netpay went down by 25 bucks... anyways... UGH! I hate all the back and forth... BK is supposed to be a relief for us in an emergency but they do their best sometimes to make it almost worse than actually doing it.

[Barbisi]

Well,NoMoney30, actually we're three and a half years in, and last year my husband was laid off but promptly got a new job with much higher gross pay but quadrupled health care premiums. The net pay was not that much more (like your situation!) yet the trustee claims we have $800 DMI. (He did include my husband's profit sharing (which we didn't report because we used it to help pay a $1300+ tax liability (a priority debt!) His latest "raise" (a market increase of some 5%) really made it seem as though we were "rolling in the dough" while the reality is we're barely treading water!
Yes, I agree that BK13is so much more stressful and unpleasant than it should be!

[flashoflight]

Thanks jbfor replying but it sounds like the attorney's fees are excluded from this counter proposal because there is a minimum fee to be paid to the creditors leaving us to be rooked yet again!
No wonder we aren't quite enjoying our BK13 like everyone seems to be on these forums!

I agree. I think the non-exempt property is the crux of the problem and why your ch13 is rougher compared to the rest of us. Like you, my DMI doesn't have any room for extras like buying back my own property from the creditors. So I made sure on the eve of bankruptcy there wasn't any property for me to buyback.

[Carmella]

I really wish that BK13 took into account those real life situations like increases in insurance, etc.

Our BK has been tough and the good thing about paying back 100% is they can't raise our payment, but they did try initially before confirmation. That aside I never thought I would be glad NOT to have an increase in our income after having my second job put on hold it's been tough. We are paying our bills at the last minute (utilities) or putting off the gas bill this month to pay the higher electric then paying more on gas next month all these games I hope would have gone away after we filed.

I thought of you Barbisi a house on my drive to work just got solar panels put on it. In Ohio. They have been pushing solar panels here. A coworker looked into it and she was a smart cookie. She figured out she would be paying much more for the panels and wouldn't be saving money (the sales pitch) in the long run. Plus I think about the fact it's Ohio there's not as much sun as other places. I saw that house and just thought "what did you get yourself into." Of course I don't know the people maybe the house is paid off and they have some disposable cash and want to get on the new energy bandwagon.