Less than 30 days from BK being over --- Notice of Dismissal for Lack of Feasibility

[justbroke]

My plan base was calculated during the first confirmation, but I had a modification of the plan afterwards. For months, the plan base was more than it should have been (by $30K or more). The Trustee eventually agreed and fixed it.

How the math error can occur is beyond me. Typically the Trustee will run your case through Best Case or Bankrupter for themselves (these are common attorney programs for bankruptcy). But there would never be a "guarantee" to the unsecured creditors unless your "Chapter 7 liquidation test" confirmed that you had equity -- and/or cash -- which reuiqres you to pay a minimum to the unsecured creditors. If that's the case, then the math should have been easy.

[Lesa13]

Could you explain a little more about your plan base being wrong? I spent several hours overnight looking into everything. The bottom line is the dollar figure guaranteed to the unsecured creditors in the confirmed Plan is not what has been paid in. I estimate between $5,000-$8,000 is owed to those unsecured creditors under the plan.

HOWEVER, how is it my attorney and the trustee were not able to do simple math? At the time the plan was confirmed, what I was paying in per month would in no way have covered both the secured and unsecured creditors. This seems like a huge mistake on someone's part, whether it's my attorney or the trustee. I am now less than 3 weeks away from supposed completion and I have a sick feeling it's going to be like "oh we made a mistake, guess what you need to cough up X amount of dollars or we'll dismiss." Luckily I can borrow from my 401(k) which I will do if I have to (not telling my attorney that). But if this had been mathematically worked out correctly from day one, it would have added something like $25 extra a payment and I would have been more than able to afford it. Now, five years later, coming up with a lump sum in the middle of this crazy pandemic so the Chapter 13 plan I faithfully followed for the past 5 years doesn't get pulled out from under me doesn't seem right.

Have not yet heard back from my attorney so I'm hopeful he has some tricks up his sleeve. If not, though, I have no problem drawing up an answer to the motion and going to court on my own.

But just wanting to know if this kind of simple math error occurs more than occasionally. Thanks.

[justbroke]

Unfortunately, your attorney and you are going to need to go through the order of confirmation and the numbers. Usually, so long as your plan payments, when added together, equal or exceed the plan base, you are okay. If your plan base was wrong from the start (as mine was), someone should have seen it and had it corrected; I corrected mine eventually.

The Trustee should only be going by the Plan Base and not by any other number and certainly not by an expected "percentage" or payout to unsecured creditors. This amount could change if tax refunds are included, but the Plan Base generally doesn't change.

Someone has to do all the math. Your attorney is going to need to object to the motion by filing an answer.

[Lesa13]

My BK (5 years in length) is over the day before Thanksgiving. I have made all my payments and it's been smooth sailing, sending them my tax returns etc. Today I got in the mail a Motion to Dismiss Due to Lack of Feasibility with a hearing date set in December.

From what I've been able to piece together, somehow the unsecured creditors are still owed money. That's not shocking news. When the plan was confirmed, it was clear they would not get all of their money. I filed in 2015 so I am under the "old rules" if that makes any difference.

The trustee did send a list of what I believe are the remaining creditors -- places like a payday loan company and Credit One for instance. Everyone has been getting paid and it looks like for the majority that are left, they are about 50% paid off. There are one or two that I'd say are about 1/4 paid off.

I'm assuming the whole point of this Motion to Dismiss is to somehow get these unsecured folks paid. But why is that? If you are unsecured, you get paid what you get paid, right?

There is no indication that they want to extend the plan, which would be fine with me and would make the most sense. I did read that if you are dismissed, your choice is refile under a Chapter 7 or a new Chapter 13. That seems like a huge waste of time and money. I've paid in faithfully for 5 years. I've done everything the court asked. The trustee approved the plan and confirmed it. Why now, less than a month before my completion, has this become an issue?

I am in the State of MO if that makes any difference. I'm waiting to hear from my attorney but this just really seems like it's someone's mistake, but not mine.

Thanks for any input! It isn't like all of us aren't under enough stress between the pandemic and the election, right??