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

[flashoflight]

I don't think anyone in a 13 is contributing the max. But if you take a covid withdrawal, you get 3 years to pay the taxes and pay no penalties. You have the option of paying it back into an IRA. When you put it into an IRA, tell the brokerage to flag it as a rollover or CARES act repayment and not as a contribution. You probably won't be able to repay into a 401k. So it doesn't really matter if you are maxed out on a 401k or not.

[shipo]

Shhh, don't tell nobody, but I was at my max contribution for my 401K for the last two years of my Chapter 13.

[sophieanne]

flashoflight - the. Cares act does include withdrawals from a 401k with the ability to repay it within 3 years..this was an option for employees at my husband’s work and was included in the cares act documentation.

[May2014]

Same thing happened to us (in Missouri, too). In our case, the attorney waived the $3000 in fees we still owed him and that fixed it for us. Bringing a lump sum would have been an option as well. I think the issue comes in when “not enough” gets paid to unsecured creditors...they have to get what they would have gotten had you filed a chapter 7. It’s scary, but it will work out...no one wants to see you fail!

[Lesa13]

Just a quick update. Was supposed to speak to my attorney today but the secretary "forgot to let him know", even though she was the one who called me last week insisting we set up a phone appointment.

Then I got a letter today from his office that reads that "at your request" he continued the Motion to Dismiss from the December date until January 14. [He did that on his own. I would have preferred to have that hearing and have gotten some info. Luckily I'm able to get into PACER and ECF to see what it is exactly he is doing. He asked for a continuance based on "needing more time to amend the plan" or how to figure out how to get this "surprise" deficit handled.]

The second part of the letter talks about me "catching up on your payments" and if I am "caught up" on my payments by January 14, the trustee will dismiss the motion.

I am pretty much ready to rip him a new one. When I explained to the secretary originally what the situation was -- which is the attorney or the trustee left an unfeasible plan in place from the original filling, without any amendment, she said "well, maybe some of the creditors asked for more after the plan was approved because they sometimes do that." No, I told her, that is not the case. I am almost wondering if this is too difficult a legal situation for the attorney to know what to do.

I'm hopeful when I do speak with him tomorrow, he has something to say other than "go get $3,000-4,000". I told his secretary point blank, someone screwed this up - it was either the trustee approving the plan when he was well aware it was unfeasible as he filed a notice of unfeasibility at the same time he approved the plan OR it was the attorney who did not do what he was supposed to do or ignored the notice of infeasibility five years ago. I told her, the only one here without fault is me. I was prepared for my BK to be over the day before Thanksgiving. I did everything I was supposed to do. I would have been happy to have a larger payment over the 5 years to make up for any infeasibility deficit, BUT NO ONE TOLD ME THERE WAS AN ISSUE OR AMENDED THE PLAN TO DO SO.

I am able to do the CARE withdrawal from my 401k and if that's what I have to do, that's what I have to do. Better to be subject to taxes/fines than to have this BK continue to hang over my head.

[justbroke]

Then I got a letter today from his office that reads that "at your request" he continued the Motion to Dismiss from the December date until January 14. [He did that on his own. I would have preferred to have that hearing and have gotten some info. Luckily I'm able to get into PACER and ECF to see what it is exactly he is doing. He asked for a continuance based on "needing more time to amend the plan" or how to figure out how to get this "surprise" deficit handled.]

Hearings are continued all the time and are based on the attorney's availability and, generally, the readiness of attending the hearing. You don't want your attorney going into a hearing unprepared. It's a waste of money especially if they're charging you the customary $250/hour when you are post-confirmation. The only thing that would have happened if your attorney attended, they would have orally requested a continuance. (And, if it's a rocket docket, the attorney only goes and speaks to the Trustee before the court goes "on record" and the attorney may have even left before it's "read into the record" in the court. Another waste of time.)

The second part of the letter talks about me "catching up on your payments" and if I am "caught up" on my payments by January 14, the trustee will dismiss the motion.

This is normal. Whenever there's a Motion to Dismiss for lack of payments, the court nearly always grants additional time for the debtor. I have seen two different judges grant up to 90 days to catch up.

I am pretty much ready to rip him a new one. When I explained to the secretary originally what the situation was -- which is the attorney or the trustee left an unfeasible plan in place from the original filling, without any amendment, she said "well, maybe some of the creditors asked for more after the plan was approved because they sometimes do that." No, I told her, that is not the case. I am almost wondering if this is too difficult a legal situation for the attorney to know what to do.

It's really the Trustee's job to make sure the plan is feasible. They represent the creditors. I would even say it more strongly that the Trustee's office is responsible for case administration. I really can't comment because I don't know where the mistake was made. Even if made by your attorney, it is the job of the Trustee to have not allowed confirmation of the plan. Unless it's related to the "best interest of creditor's test" I can't fathom where the Trustee messed up.

But, just because the Trustee messed up doesn't mean that it's not still your responsibility to pay the shortage. I would look at the Plan Base that was in the original (and any plan modification) and the current Plan Base. I'd then look at all your payments and if your total payments are not greater than or equal to the Plan Base, then the Trustee should have caught that earlier. If your payments are greater than the Plan Base, then there is something else going on.

I always measure a Chapter 13 by the Plan Base. That's the goal. The Plan Base could change -- based on tax refunds surrendered to the plan -- but it is usually pretty fixed.

Bottom line is that I don't know where the math is wrong, but it appears the Plan Base was not met. Someone needs to do all the math from the confirmed plan through today. It reads as though the Trustee is using the Plan Base and that has not been met.

[joshuagraham]

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.

It seems that you could sue the attorney - and perhaps even the trustee - for malpractice.

[Lesa13]

My base plan was $15,000. Total paid into plan as of now is $15,625. They are still taking money out of my paycheck 2x a month, which is great, since at least the debt still owed to the unsecured creditors (mainly payday loan folks) is getting smaller and not bigger.

Before the last hearing, my attorney filed an "amended" plan which I knew and he knew was not going to work. We are over 60 months on this BK. I believe his idea was to get a date for hearing on the amended plan, go to that, get that denied and then probably get thrown back on the dismissal docket. Unfortunately, the trustee is probably on to this BS and the very next day filed her pleading with all kinds of reasons not to amend the plan. So we are still on the dismissal docket for 3/11. The trustee wants check stubs from December 2020 and January 2021 which I will of course provide.

I'm not sure what is going to happen. I now am not able to come up with thousands of dollars in a day. I told my attorney point blank, this is YOUR fault. You missed the 2016 lack of feasibility notice. Now I should be successfully done, building up my credit again and I'm still in the same situation plus still owing a crapload of money to a bunch of payday loan companies.

I'm pretty upset about all of this right now. My stimulus $600 was stolen by someone at my PO so I didn't even get that. I put that on my taxes as a credit, which helps, but still owe taxes anyway. The money that I was going to take out of my 401k to pay off this BK thing I ended up using for medical expenses. I had to put out over $7,000 in a space of about 3 weeks in December. There was just no way around it and no one else I could got to or otherwise get the money.

If this does not get handled satisfactorily, I will definitely be filing a bar complaint against the attorney. He's a nice guy but he f*cked this up and he should be coming forward saying hey, this is my fault, not the debtor's and what can we do to solve this instead of just getting continuances and writing me letters about "coming up with the money". I think he really does not know what to do and is over his head. I have NO problem with paying everyone off. That's why I did a Chapter 13 - to make sure everyone got what they were supposed to get. But I need the trustee or someone to be reasonable and give me some time to pay it off. All of the unsecured have gotten probably more than they would have otherwise (some are almost at 100%) but it is what it is. I just hope I can get some peace out of this next hearing and actually move forward knowing what it is I have to do to get this done.

Thanks for reading!

[justbroke]

If this motion to dismiss doesn't go your way, your attorney can plead under the CARES Act to have your plan extended another 2 years. While that doesn't fix the issue that the attorney missed something, it would save you from losing all the ground that you gained in the 5 years that you have already been in plan. I would be surprised if your attorney doesn't already have the motion to extend (under the CARES Act) already in their back pocket. You have to hurry though for that CARES Act extension as it expires 1 year from enactment.

So if you are okay with the extension, please mention this to your attorney. I believe the CARES Act passed Congress on 3/26/2020 so you would have to file for the extension before 3/26/2021.

[Lesa13]

He did file the amended plan with the CARES Act info asking for at least another year. Trustee objected of course. I thought they might be a little bit more understanding and go ahead and let any of the requests related to covid go through - it isn't like it's any skin off of their nose and it actually means more $$ in the trustee's pocket. But who knows how these people think.

I have noticed one other thing. A claim was made by an unsecured creditor (Portfolio Recovery) for $8,721. The trustee, however, has scheduled them to be paid $9,203 - more than their claim. I have no idea where that number has come from. There were no amended claims filed by Portfolio Recovery and the $9,203 is not mentioned anywhere else in the docket report. So that's something else I guess I'll have to figure out.

2 years would be awesome and obviously would be more than enough time to get everything paid off. I did tell him, if you can get me even another 6 months, that would be great. But I can't afford to have $1,000 taken out of my bi-monthly paycheck for the next 3 or 4 months and to be honest, I don't think I should then be under a hardship because my attorney ignored the lack of feasibility notice 5 years ago.

Thanks for the info. Our court date is 3/11 so I will definitely mention to him again about the extension through CARES.

What a mess!

[justbroke]

Chapter 13 Trustees object to things, and sometimes they are overruled at the hearing. I don't see anything in the CARES Act that would allow a Chapter 13 Trustee to object to the extension so long as you can articulate that the extension is necessary directly or indirectly due to the pandemic. That's probably why you received an objection, but it's only that... an objection. I would expect the court to be more sympathetic.

If it were me I may "articulate" my problem that I still owe $x,xxx to my plan and there's no way I can make more money due to the pandemic. I just showed that the pandemic is directly affecting my ability to pay. But remember, that's just me talking.

[flashoflight]

I think you should strictly focus on raising the funds to pay off the 13 or covid extend the 13. Forget about getting compensation from your attorney even though you deserve it. If your bar complaint threatens his license, that doesn't mean you will get paid a dime later on. When pursuing the CARES Act extension, you need to give documented evidence to your attorney that you were adversely affected financially by covid such as business downturn since March 2020 or family catching covid. In my district, you will not be successful without providing documented evidence of adverse effect of covid. Your attorney cannot come up with reasons out of thin air. Your attorney isn't very good so you need to help him as much as possible to be successful at the hearing so you have to be the proactive one and send pages of PDFs to bolster your case.

[Lesa13]

there are several discrepancies in all the information I've seen. I told my attorney flat out I need an extension of at least six months. I cannot come up with $8,000. I've given him all the information that I could possibly give him. I work in the legal industry and I probably have more experience than he does so he's not pulling a fast one on me I'm just trying to keep him on my side at least until we can get this worked out. after everything is over if he has not stepped up to the plate I will consider filing a bar complaint. if I have to go to the hearing myself which is this week and tell the trustee look this is the situation and someone dropped the ball whether it was the attorney or the trustee and I'm not going to be put into a hardship situation because of someone else's mistake, I will.

[Zombie13]

After reading through this conversation, I added up all our payments to date, and the final 12 payments. The total came to precisely the "new" 2.0 (?) or 3.0 (?) revised plan base. I am making a payment in a couple days. After that, 11 payments to go.

[shipo]

After reading through this conversation, I added up all our payments to date, and the final 12 payments. The total came to precisely the "new" 2.0 (?) or 3.0 (?) revised plan base. I am making a payment in a couple days. After that, 11 payments to go.

Last year on the way; WOOT!

[Lesa13]

Chapter 13 Trustees object to things, and sometimes they are overruled at the hearing. I don't see anything in the CARES Act that would allow a Chapter 13 Trustee to object to the extension so long as you can articulate that the extension is necessary directly or indirectly due to the pandemic. That's probably why you received an objection, but it's only that... an objection. I would expect the court to be more sympathetic.

If it were me I may "articulate" my problem that I still owe $x,xxx to my plan and there's no way I can make more money due to the pandemic. I just showed that the pandemic is directly affecting my ability to pay. But remember, that's just me talking.

thanks. that's a great idea!! I do have a disabled family member who needs basically everything from being fed to bathroom etc. and because of the pandemic they were not able to staff for her on a regular basis and so my older mother and father and myself had to pitch in with day-to-day care for her. so I said if you want to get technical, yes, I have been affected but again I feel like everyone has been affected in one way or the other.

[Lesa13]

My attorney's thoughts right now are "I will try to buy you some more time but you need to start paying more towards the debt." How am I supposed to do that? Just send money to the court? Doesn't that have to be somehow set up with the trustee? I owe thousands of dollars so it isn't like oh, I can make a few extra payments and I'm done. My attorney said "I would like to wrap this up." Well, guess what? SO WOULD I but because you screwed up, attorney, now I'm in a position where I don't know how or when things will get "wrapped up." I've done all the leg work for him. I've sent him everything I could find and have and brought up some questions he could ask the trustee. I'm not feeling good about this at all.

Has anyone ever approached a trustee on their own or written a letter on their own when they were already represented?

[Lesa13]

Yesterday was my court date on both the Trustee's Motion to Dismiss my Chapter 13 AND the Trustee's Objection to the First Amended Chapter 13 Plan. Guess what happened? NOTHING. Again my attorney continued it for another month. This has been going on since November. I'm really at my wits end.
On the 1st Amended Plan, he didn't even do that correctly. He didn't follow the local rules of how to serve it and set it for a hearing. His numbers are all off so what he is proposing won't even cover what's owed - it's at least $800 from being feasible.
I'm wondering if I should fire him and just try to go pro se from this point and see if I can personally get anywhere with the trustee or what. This is so upsetting and frustrating.