Under what Circumstances Can A Debtor Be Denied a BK13 Discharge?

[Barbisi]

Justbroke painstakingly explained in a different thread why debtors such as my husband and myself, with complicated cases, are supposed to have a BK13 under a more exacting microscope, full of frequent surveillance and yearly monitoring.
Does this mean the discharge and closing will take additional time , trustee investigation and require paystubs and tax returns after the 60th payment is made in order to close this perfectly awful chapter of our lives? Could the trustee decide on an arbitrary number of payments beyond the 60 agreed on because he feels we simply haven't paid enough to the creditors? Is it a guarantee after 60 payments debtors who pay every penny as ordered by the court, actually receive a full binding discharge with out caveats?
I feel we might have to wait a year or more as a debtor on the East coast had to. (Did they ever receive a discharge, I wonder?)

[shipo]

Barbisi, I'm not sure complex or complicated cases require "a more exacting microscope"; my case was anything but routine what with the fraudulent activity of my former business partner, a separation from my wife (we've since gotten back together), her Chapter 7 filed a year before mine, and all of the expenses of winding down two small businesses, and well, everything else. Other than grabbing most of one of my tax returns one year, my Trustee ignored a number of 5-figure bonuses I got each year, raises and promotions, and then there was my yearly increase in my 401K contributions (which effectively left me with a flat level of income for the full 5-years). To say your Trustee must have gone to the Draconian School for Trustees is a bit of an understatement.

[Zombie13]

Excellent question, Barbisi!
And thank you for the prompt response, shipo!

[Barbisi]

Thank you shipo for the detailed response! And big congrats on your promotion to moderator status!
Draconian is a very good word for this trustee's approach to our case, but is not one that justbroke would probably agree with - rather, he might see him as just thorough and diligent, whereas we and others, see him as a little too particular about checking up and in on us. LOL
I suppose that's what worries me - if the whole BK13 has been hellish, why wouldn't the discharge and closing process be a nightmare?
I do know and understand that your case was very thorny but it does sound like your trustee basically left you alone, thus your discharge was relatively painless and quick.
I hope others weigh in as well.

[justbroke]

I don't believe there's a more exacting microscope in order to discharge a Chapter 13 case. The simple fact is that the Chapter 13 Trustee must make an accounting audit of everything spent, account for every returned check, and perform all housekeeping measures at the end of the case. What many don't realize that the housekeeping is an enormous task. That's a real audit to make sure the Trustee has spent every penny, or returned it to the debtor.

The Trustee must also make sure every single check is cashed or, if returned, dealt with in some manner. This is actually the reason it can take 30-90 days to get the discharge after the final payment. A combination of the audit and waiting to make sure all the checks cleared simply takes time.

Now, the baseline question was " Under what Circumstances Can A Debtor Be Denied a BK13 Discharge?" I don't think there are any except these few issues;

• a dismissal for failure to maintain payments
• a discrepancy in the accounting causing the Debtor to still owe money (RARE)
• the financial management course is not taken (easily correctable and can reopen case to file!)
• filed within timeframe disallowing a Chapter 13 discharge...
  • 4 years of a Chapter 7
  • 2 years of a Chapter 13

That's it. That's all I can think of. If you made it all the way to completing plan payments you have pretty much survived and the discharge will come. It may take 1-3 months for that discharge to be entered, but it will come.

The nice thing is that creditors have no standing to object to a Chapter 13 discharge.

[justbroke]

Draconian is a very good word for this trustee's approach to our case

It's a good word. It reminds me of the movie The Hitchhiker's Guide to the Galaxy where the prison release form is taken literally. Some may call it malicious compliance.

(If you haven't read the book or seen the movie, the prisons are managed by one of the "most unpleasant races in the galaxy" but they are not evil, but just bad-tempered bureaucratic, "officious," and callous. I'm trying to be nice, but officious just about covers it.)

I don't condone the behavior of some Chapter 13 Trustees that believe that they must monitor every single step the debtor takes. They are there to help the debtor to succeed while being the trustee of the money to be paid to the creditors. It doesn't mean that they can't have a little humanity and humility. I like the ones that just get that when we're in a Chapter 13, we're... just broke. No reason to beat a dead horse.

[Barbisi]

I never watched Hitchhiker's Guide , but I loved watching reruns of another British series, Blake's 7 when I was in college.

[Barbisi]

Thank you jb!
We were warned by the lawyer about trying to include the monthly screenwriting class costs ($150) as an expense before the confirmation, and I think that by doing that, we got off on the wrong foot with him : how dare this woman try to continue taking non-essential classes in her field, thereby depriving the creditors of that money?( I have never felt like he believed that we are paying enough and like a slippery snake, watched and waited for the ideal opportunity to ponce and raise the payment as much as possible. (We have never been able nor will we ever be able to pay 100% back.)
After that, he always wanted to know if I was working. I caught on too late ,but I did retire - at least until 2022.
I hope you're right about all the snafus that can derail a BK13 discharge but you never know - the wily ones can always have some little -known trick up their sleeve.

[Barbisi]

Pounce not ponce -as a writer in BK13 enforced retirement, I cringe when I see such misspellings!

[Zombie13]

We'll have to watch The Hitchhiker's Guide to the Galaxy. I read the book a long time ago.
So justbroke, that is the answer to a very important question: what is the average timeline for a discharge... answer is: 30-90 days. Good to know, thanks.

[dieselman]

You two are way overthinking this..... Just make the few remaining payments you have and the discharge will happen. You're creating drama on "what if's"....

[Zombie13]

Incorrect. Each debtor's bk process is different. For some, it's straightforward and they don't have to ask questions, anticipate actions, and plan responses. For others (such as, us), it's not straightforward, and they (we) need to think ahead, and consider how to respond to actions the trustee may take. It's not creating drama. I would much prefer to ask questions, consider our situation, and have a potential action plan to respond, versus being caught by surprise and having absolutely no clue what to do except, call our attorney asking for help, with no information a priori. That's kind of a really bad action plan.
RE: the "what if's " : more than once, we have had to gather information on expenses in anticipation of a potential payment increase. So yes, we do ask 'what if', and often. That's how we learn, and are better prepared if necessary. If we aren't prepared, then we could get suckered into a payment we can't afford.
The way *our* bk has gone, I would not be surprised if the trustee asks for the tax returns and latest pay stub at the end. Maybe that "never" happens. Do note though: our attorney mentioned to us, he was surprised the trustee raised the payment on us, because that has never happened with any of his clients, ever. And the attorney has been doing this for 25+ years. So, never say never. It can happen. This is another reason why we present the 'what if' questions to the more knowledgeable folks in this forum.
It is less of an issue at this point, now that Barbisi has asked the question and we have received quality responses.

[Carmella]

You two are way overthinking this..... Just make the few remaining payments you have and the discharge will happen. You're creating drama on "what if's"....

Hold your horses. Some of us have been corresponding in this board through the BK process for quite a long time and like to discuss what's going on, what is on our mind as we survive the 5 year plan.