Question about disbursements

[Carlybean]

I am totally confused. I have made my 61st payment on 6/24 which was applied on 7/1 so I will hopefully get that extra payment back at the end of all this. I was under the impression that since I had more than enough money for when the trustee disbursed at the end of the month of June that I would see my usual amount of disbursements showing up at the beginning of July. Once those disbursements are made then my creditors would all be paid and I could move forward to eventually getting my discharge. The problem is I only see 2 disbursements on July 5th one for my trustee and the other for another creditor. No other disbursements have been made and the trustee still has the remainder of the money. I called my attorneys office and was told that the rest of the disbursements will happen at the end of July. I said well why didn’t they pay all of them instead of just 2. Does that make sense to anyone?

[shipo]

At least in my case the discharge was issued weeks before the final disbursements; what needs to wait for all monies to be distributed to creditors is the closing.

[justbroke]

I called my attorneys office and was told that the rest of the disbursements will happen at the end of July. I said well why didn’t they pay all of them instead of just 2. Does that make sense to anyone?

We don't question how or when the Trustee makes payments to creditors. They do so on a schedule and it's usually only once per month. How they determine or pay a particular class or creditor, we dont' question. It's their system and they have their reason for how they make disbursements.

In your particular case, I suspect that the Trustee holds money for at least 14 days before disbursing the money. Therefore, they will not may a payment to a creditor within a few days of having received payment form the debtor. It may not make sense to you, but they have their share of issues that they don't want to literally bounce millions of dollars in payments because something backfired. Remember, the check is issued by the Trustee and not the debtor.

[Carlybean]

I understand they have their system it just doesnt make sense to me that the 60th payment arrived at the trustee on May 20th so I would have thought it would have been disbursed at the end of June

[justbroke]

I understand they have their system it just doesnt make sense to me that the 60th payment arrived at the trustee on May 20th so I would have thought it would have been disbursed at the end of June

It makes perfect accounting sense for the Trustee. Remember, they make payments only on certain days and the cutoff for received payments is another day. So if their cutoff is the 15th of the month for "seasoned" funds for payments made at the end of the month, then your payment would have missed the cutoff.

The United States Trustee Program (USTP) has run for years and they have established a system which prevents, or attempts to prevent, mistakes. One of the well known mistakes is fund availability. To avoid the mistake, you simply wait for funds to season before you use them. The second thing that the USTP does, is that most Trustees only make payments to creditors once per month.

In large accounting operations, of which the office of the Standing Chapter 13 Trustee is certainly one, payments are made monthly. Cutoffs are designed to allow the handling of millions of dollars of payments in a coordinated manner and to help prevent mistakes, allow for an approval workflow, and to account for discrepancies prior to disbursement. Is it 100% foolproof? No. Does it work in practice, yes!

A little perspective, for those that care: The Chapter 13 Trustees, in 2021, collected $5,029,174,197 from plan payments. Yes, you read that correctly, that's $5B. There was $182,688,239.00 in refunds; yes refunds. to debtors. There are over 500,000 active cases overseen by 170 Chapter 13 Standing Trustees. This is a massive accounting operation.

(Source: USTP https://www.justice.gov/ust/private-...and-statistics)

[GL57months]

That sheds even more light on the system and sadly how many are in C13, 170 in 50 states, and $5+ B in one year, Wow! Mine when super smooth, and the Trustee initiated the review before my final payment was made. I however had NO modifications and NO missed payments. I think the results vary from Trustee to Trustee, from the responses I have read over the last 5 years in this forum.