Big Purchase

[crazytimes]

Hello all,

I have 14 payments left and during the past 4 years I have been able to save money. Some which came from tax refunds that the trustee allows me to keep. All my payments have been on time and I have never heard from the trustee since I started the Ch13. He is very much a hands off person as long as payments are made on time.
I am looking to purchase a motorcycle for $8,500. It will be paid in cash, which feels good that I can do, but wondering if a big purchase will raise a flag. I don’t know how the trustee would know about the purchase but I am very close to the end of my 5 years. Is there an issue making large purchases with money I saved? Don’t know if the trustee may randomly want to see bank statements looking for things or if he may do a random audit this far into the ch13. I was audited when I first started. I will still have money in the bank after this purchase.
I am not on a 100% payback.
‘Thanks.

[shipo]

Nope, no red flags at all, your Trustee doesn't look at your bank statements at all. FWIW, I was only about 38 months into my Chapter 13 when I needed to buy a new(er) car and had to pay cash for it, I dropped $10,000 (money I had saved from tax returns and bonuses) on it and then the next year I had to put another $5,000 into in for required and preventative maintenance (tires, clutch, brakes, some suspension parts, motor and transmission mounts, rear main oil seal, clutch slave cylinder...); my Trustee A) never found out, and B) could have cared less if he had found out.

[crazytimes]

Nope, no red flags at all, your Trustee doesn't look at your bank statements at all. FWIW, I was only about 38 months into my Chapter 13 when I needed to buy a new(er) car and had to pay cash for it, I dropped $10,000 (money I had saved from tax returns and bonuses) on it and then the next year I had to put another $5,000 into in for required and preventative maintenance (tires, clutch, brakes, some suspension parts, motor and transmission mounts, rear main oil seal, clutch slave cylinder...); my Trustee A) never found out, and B) could have cared less if he had found out.

Thanks. Starting to feel better about the purchase. Just so close to the end I don’t want to mess it up. It has been smooth sailing these past 4 years.

[Barbisi]

Crazytimes, be glad you don't live in Colorado - the trustee is here, as just broke said, savvy, and is as others have said, anal! LOL
When my husband received his severance funds we fretted about buying a new mattress( $800) to replace a badly sagging Sleep Number one which was really damaging my already compromised back.
We saved the receipts and were prepared to provide doctors' letters stating it was medically necessary to replace the seven year old mattress. Luckily, we didn't have to, but ever vigilant, our trustee attempted to unsuccessfully raise our payment by 100% the next year. (We ended up having to pay $350+ more instead since my husband was able to find another, higher-paying job immediately.)
I'm sure shipo is right in your case though -you have a hands off trustee who basically leaves you alone and lets you thrive in your BK13.
Congratulations on your new ride!
When we are done in a few months (It feels like an eternity!), we are planning to sell our house, buy a new car to replace a 18 year old model, and relocate to a better place for our health and post BK13 pursuit of happiness.
May you have a fantastic rest of your BK13 filled with great memories and a drama - free discharge!
Good luck to you always and best wishes going forward!

[crazytimes]

Crazytimes, be glad you don't live in Colorado - the trustee is here, as just broke said, savvy, and is as others have said, anal! LOL
When my husband received his severance funds we fretted about buying a new mattress( $800) to replace a badly sagging Sleep Number one which was really damaging my already compromised back.
We saved the receipts and were prepared to provide doctors' letters stating it was medically necessary to replace the seven year old mattress. Luckily, we didn't have to, but ever vigilant, our trustee attempted to unsuccessfully raise our payment by 100% the next year. (We ended up having to pay $350+ more instead since my husband was able to find another, higher-paying job immediately.)
I'm sure shipo is right in your case though -you have a hands off trustee who basically leaves you alone and lets you thrive in your BK13.
Congratulations on your new ride!
When we are done in a few months (It feels like an eternity!), we are planning to sell our house, buy a new car to replace a 18 year old model, and relocate to a better place for our health and post BK13 pursuit of happiness.
May you have a fantastic rest of your BK13 filled with great memories and a drama - free discharge!
Good luck to you always and best wishes going forward!

How did the trustee know about the mattress you wanted to purchase? Was it the severance the trustee noticed on your taxes? I have had a pay raise each year and a bonus each year as well and never hear from my trustee. I am always waiting after I send him my taxes to get a letter wanting to increase my payments but nothing comes in. My payment does increase $500 additional during the last 8 months but that is built into my plan.

[Zombie13]

Hi crazytimes ; Barbisi's other half here... the trustee did not know about the mattress, but rather, we were instructed by our attorney to 'toe the line' (my words). So, when we had any significant change in status (lost job, or new job, considerable increases in salary), we notified the attorney. Our concern was, if we didn't, then the trustee might respond in a retaliation fashion. In other words, we felt it best to 'follow the rules' and just report information, versus trying to 'hide something'. Yes, we feel we have always been on the trustee's "Short List", though, I have another term for it - sh*t list. fortunately, 5 payments remaining. #5 is due next week, so then, 4 left. When it's over we won't have to deal with this perception of totalitarian oversight.

[Barbisi]

Crazytimes, I wasn't trying to alarm you, rather I was showing by contrast just how controlling our trustee is compared to yours. So don't worry!
Every year at confirmation time (July/August) our trustee "asks" for latest tax returns and pay stubs. If my husband has a significant enough increase, he will raise the payment. Since this is our last six months of payments, he didn't request our info this year, but we are always on edge knowing he is watching us - We have never been able to save up money as you have from refunds, etc. because we have two old cars that end up every year taking whatever $$$$ we have available.
He never did find out about the mattress because he didn't attempt to collect the severance package and used the salary increase from the new job instead to try to raise our payment by 100% the following year (2020).
I think you are very lucky to be able to save up that amount and should enjoy your motorcycle!

[crazytimes]

Crazytimes, I wasn't trying to alarm you, rather I was showing by contrast just how controlling our trustee is compared to yours. So don't worry!
Every year at confirmation time (July/August) our trustee "asks" for latest tax returns and pay stubs. If my husband has a significant enough increase, he will raise the payment. Since this is our last six months of payments, he didn't request our info this year, but we are always on edge knowing he is watching us - We have never been able to save up money as you have from refunds, etc. because we have two old cars that end up every year taking whatever $$$$ we have available.
He never did find out about the mattress because he didn't attempt to collect the severance package and used the salary increase from the new job instead to try to raise our payment by 100% the following year (2020).
I think you are very lucky to be able to save up that amount and should enjoy your motorcycle!

I wasn’t alarmed just wondering how the trustee found out and understand what you were saying. It is sad the trustee has that much oversight on your BK. I am supposed to send my taxes each year which I do, and also provide a statement of income and expenses for the year. My attorney said not to worry about the expense sheet because the trustee never asks for it and she is right. At least the end is in sight for you.

[crazytimes]

Hi crazytimes ; Barbisi's other half here... the trustee did not know about the mattress, but rather, we were instructed by our attorney to 'toe the line' (my words). So, when we had any significant change in status (lost job, or new job, considerable increases in salary), we notified the attorney. Our concern was, if we didn't, then the trustee might respond in a retaliation fashion. In other words, we felt it best to 'follow the rules' and just report information, versus trying to 'hide something'. Yes, we feel we have always been on the trustee's "Short List", though, I have another term for it - sh*t list. fortunately, 5 payments remaining. #5 is due next week, so then, 4 left. When it's over we won't have to deal with this perception of totalitarian oversight.

Don’t know if I would have made it with that much oversight. At least you are almost done.

[Zombie13]

@crazytimes: exactly. The significant level of oversight is very uncomfortable. We're walking on the 'rice paper' (reference to the classic tv show, Kung Fu).
Be safe with that new ride!

[crazytimes]

@crazytimes: exactly. The significant level of oversight is very uncomfortable. We're walking on the 'rice paper' (reference to the classic tv show, Kung Fu).
Be safe with that new ride!

I thought the trustee was there to help get a person through the ch13 not treat them like crap. Very happy you are almost done.

[justbroke]

I thought the trustee was there to help get a person through the ch13 not treat them like crap. Very happy you are almost done.

It's an interesting story about the job of the Chapter 13 Trustee. All of them agree that their job is to help the debtor get through the Chapter 13. Some think it's by understanding and empathy and the others by enforcing all the rules. A Chapter 13 is about a bunch of rules and some Chapter 13 Trustees are extremely strict, and others are extremely flexible. Most people are in the middle. The ones on either end are either very lucky or very unlucky. I'll let you assign the luck factor as to which end of the spectrum any Chapter 13 debtor would want to be placed.

[Zombie13]

Interesting... we've never felt like the trustee is there to help us. Rather, I do feel we have always been under intense scrutiny from them. A few times when finances have changed, we have also collected detailed information to back up our arguments of increased expenses as well. In other words, we
have consistently been preparing for a battle to defend our income.
Thank you very much, we do appreciate it. Yes, almost there. Hopefully our outlooks and overall perspectives will improve once this is done and we have relocated to a more suitable locale, etc.

[justbroke]

Interesting... we've never felt like the trustee is there to help us.

It a term of art. The Trustee receives their power from 11 USC 1302(b) which says...

11 USC 1302(b) The trustee shall... (4) advise, other than on legal matters, and assist the debtor in performance under the plan... AND (5) ensure that debtor commences making timely payments... AND...

(emphasis added is mine)

The Trustees look to that 1302(b)(4) to derive most of their powers. In fact, the wage deduction order is not found anywhere in the code, but the Chapter 13 Trustee derive that power under the guise of "assisting the debtor in performance under the plan." Remember that the plan is a contract, so the strict Chapter 13 Trustee see that the plan says "dedicate all disposable monthly income to the plan" and by God, they are going to make sure you do that!

I post that because many Chapter 13 debtors don't know why the Chapter 13 Trustee wants to "help' a Chapter 13 debtor. Well, it's their job. And I know the word "help" is used loosely here but refer you back to the Trustee's Duties (11 USC 1302) in the case of a Chapter 13 debtor in a confirmed plan. Again, some Chapter 13 Trustees read the law as "strictly" making sure the debtor "performs" under the plan. The other Chapter 13 Trustees are such that so long as the debtor is doing what the plan says... they don't bother them. Then there are those in the middle.

That's why you get a different vibe depending on several factors;

• the facts of the specific case (non-filing spouse, keeping too much, large mortgage, etc)
• a lot of special expenses (while necessary, what the Trustee may see as excessive ancillary expenses, such as private school and elite participation in sports, music, art, etc)
• the district-specific rules (this has a big impact in some areas such as ability to incur debt WITHOUT approval)
• the temperament of the Chapter 13 Trustee themself

We all hope for the nice, relaxed Chapter 13 Trustee who just reviews are annual tax returns and usually says nothing about the increase in pay. But, we do realize that there is a spectrum of both District-rules and a specific Chapter 13 Trustee.

It's just the nature of the game. I will always refer back to one of my favorite judges who likes to say "it's a pay to play system." It sounds wrong, but it is so right. How much an individual Chapter 13 debtor has to pay in order to play... is just too subjective.

[Zombie13]

Ah ok, thank you for the explanation, justbroke . Much appreciated.