Creditor's Confirming Debt & Total Balances

[QuinnReilly]

Hi all,

Ok, I understand that when you file, notices are sent to all of your creditors and they have a period of time (90 days?) to confirm the debt. Assuming that the only debt going into repayment is unsecured (not behind on mortgage and car so I'm hoping that remains out of the bankruptcy), is it typical for some unsecured creditors to not confirm? If yes, is there a benchmark of who doesn't? Certain creditors or certain amounts? I'm looking at roughly $100k of unsecured debt over 9 creditors. Balances range from $1,700 to $27,000.

Another question for anyone who might know. I encrolled in a debt settlement agreement 2 years ago (part of why I'm in this mess, but that's another story). They have settled 4 of my 7 debts and payments are currently being made. 2 of the 4 were settled for significantly less than what was owed, like 50%. Should I assume, though, that cancelling the debt settlement agreement will make that settlement null and void and the original amount minus any payments is what will be used for payment recalculation? Of course, I know that my attorney will know all of this and he will be doing the repayment calculation for me - I just would like to have an idea going in.

[flashoflight]

QuinnReilly

1) There is no such thing as leaving the mortgage and car loan out. You may pay direct instead of conduit, but it's still part of the plan. In fact, the trustee will check to make sure your mortgage is current after your final trustee payment or you lose your discharge. So the mortgage payment is part of the plan regardless of whether you pay the trustee or write a check/billpay to the mortgage lender.

You will also incur a bunch of extra junk fees on your mortgage of around $1k. Doesn't matter if you are current and paying the lender direct. The mortgage lender will have to do a bunch of work to file a proof of claim and setup a separate BK ledger for your account. In fact, there is a good chance you may be considered in arrears at the end of the BK even if you make all of your payments due to the junk fees.

2) The vast majority credit cards will file a proof of claim. If the credit card is at the JDB, it's just about a 100% certainty they will file. You might get lucky and get one or even two that doesn't file out of nine. But with "just" nine creditors, the most likely outcome is all nine will file a proof of claim. The ones that tend to not file a proof of claim are smaller merchants like dentists. If you are in a 100% plan, assume everyone will file and be pleasantly surprised if a few don't file. If you are in a less than 100% plan, it just doesn't matter at all who files and who doesn't. You going to pay the same amount in a <100%, which is what you can afford (net disposable income).

[Zombie13]

QuinnReilly

1) There is no such thing as leaving the mortgage and car loan out. You may pay direct instead of conduit, but it's still part of the plan. In fact, the trustee will check to make sure your mortgage is current after your final trustee payment or you lose your discharge. So the mortgage payment is part of the plan regardless of whether you pay the trustee or write a check/billpay to the mortgage lender.

Interesting point about the mortgage being current. Usually the payment is considered 'current' if paid within 14/30 days (depending on jurisdiction and lender) of the standard payment date, typically the 1st of the month. For example, as long as the payment is made by the 15th of the month, my understanding is, the mortgage is current. I wonder though, if trustees in general view this differently - ie if the current payment is not made before/by the payment due date (1st of the month), is the mortgage payment considered late?

Also - QuinnReilly - good luck with the process!

[flashoflight]

Zombie13

It's determined by the lender. The trustee sends the lender a form to fill out that states whether you are current or not and whether you cured all of the arrearages. Most lenders will give you until the 29th of the month after the due date and still be current (<30 days late) if you pay the late fee along with the monthly payment. If you pay on the 16th day of the month or earlier, you don't have to pay the late fee even though you paid past the due date on the 1st of the month.

[Zombie13]

flashoflight - thank you for the detailed explanation, much appreciated!