My Chapter 13 has been confirmed! Need to sign today

[mclawdawg]

Hi all,

Quick update, I've made my 3rd monthly payment to the Trustee of a plan my lawyer wrote up. There were some minor hiccups in paperwork but today is the day of the confirmation, and I don't know whether to be happy or extremely worried at this point considering the following:

The new plan that was written up states that I'll need to turn over any tax returns, bonuses, and that I can't change any withholdings without the trustees permission. All of this I am fine with but if you read further you can see my concern. Prior to this new written agreement - 5 months of Federal Withholdings have been exempted for 2021, but I recently have changed it back last month to claiming 0 and paying the right amount of money in for taxes so I will not owe anything this year and have my case dismissed.

________________

The most important question I need answered here is:

A.) If I sign this agreement and I owe taxes for 2021 will I suffer any major consequences or will the case most likely be dismissed?

B.) I finally got confirmation and I'm afraid to tell my lawyer that 5 months prior have been exempted and I'm basically playing catchup, and yet risk the confirmation of this new plan they have written up. I know I can fulfill the tax amount for the end of the year as well with the payment they've come up with.

Appreciate your time reading this, and all of the help from this community. Have a blessed day everyone.

[flashoflight]

Tell your lawyer what happened today. Then jointly decide what to do. Maybe he can fix it if the trustee hasn't lodged the order. You're making your case much more difficult to survive than usual due to not fixing the withholding before confirmation. I guess if you have a large tax bill next April, the trustee will be amenable to changing the plan. You're only 3 months in and it has been very easy due to not having taxes paid from your paycheck. If I was exempt from taxes, my 13 would be super easy too. It's going to get real rough real fast once taxes are taken out.

[mclawdawg]

flashoflight Thanks for responding. A little more information: Yes you're absolutely correct, due to doing this I have roughly around $3,000 in the bank saved up that the trustee has no interest in and this helps me sustain my monthly payments while they take more taxes out to fulfill the tax year for 2021.

So my situation is this: Every other year I get to claim my child, so I exempt or change my W-4 withholdings around. With everything that has been going in in my chaotic life I forgot to change it back sooner. Also my employer messed up badly. Unfortunately this is the year I am filing Single.

At this point should I just stick with the money I have saved in the bank and let the plan be confirmed, or do as you say and speak to my lawyer about how many months have been missed?? I really fear this will stop the confirmation from going through if I do this. I believe I can still make the monthly payment while extra taxes are coming out.

Thanks,

[flashoflight]

Tell your lawyer about the problem and let him know you were gonna just gut it out until next year due to the child credit/$3k savings and deal with it in January. That's probably what I would do. I think the trustee won't care very much if you increase withholding after confirmation because he will take your tax refund anyway so there is no loss to the creditors there. See what your lawyer says because of my comment below about the plan changes.

It's when you decrease the withholding after confirmation that the trustee is concerned about because that is potentially a way to get a bigger net paycheck without giving the windfall to the plan. This trustee seems difficult and wants your bonus, tax refund, and any decrease in withholding. I got the bad feeling your plan is going to be changed every year by this bored trustee, and you might as well deal with it on the next change. Just make sure you always have the withholdings right. My condolences for having to deal with this trustee.