Filing Fee: Pay in Full or Installments?

[TurnThePage]

Does the Court or Trustee look unfavorably on one who opts to pay the filing fee in installments versus payment in full? How many filing fee installment payments are typically made in a Chapter 13?

[justbroke]

No. It has no impact on the case itself... unless you don't pay. I believe there are 2 installments no matter what chapter you are filing. it is basically divided in half and made in 2 payments.

In reality, I have never heard of a Chapter 13 filing fee being paid in installments when the debtor is represented. It makes no sense in the grand scheme of things. I say this because a debtor is already paying the Chapter 13 attorney at least $2,500 or more up front with other fees in the plan. It doesn't make sense that the debtor can't afford the $313 filing fee in that scenario.

If you are filing a Chapter 13 without an attorney, I would recommend that you rethink doing so.

[TurnThePage]

I had a meeting with my attorney who wanted a non-negotiable $4000 retainer for Chapter 13. The irony is that if I could afford an attorney, I would be current on my car payments.

I read somewhere that 93% of unrepresented Chapter 13 cases fail. My Attorney's advice, "Maybe the Trustee will help you." I'm going to give it the old college try.

[justbroke]

Most people that pay their attorneys, stop paying certain debts prior to filing. This includes, but is not limited to, mortgage payments, credit card payments, installment loan payments, and even car payments (if filing within 30-60 days). The savings from not paying the creditors is used to pay the attorney. Any arrears on a home or car are rolled into the plan and satisfied by the plan.

As a Pro Se Chapter 13 debtor, you should seek out any Pro Bono attorney support or determine if your district has a good Pro Se clinic. If you have real property, I would strongly discourage trying to file without an attorney. I'd simply not pay my lender for a couple of months and fund my chapter 13 in that manner.

It can get tricky and as a Pro Se Chapter 13 debtor you can end up leaving money on the table and certainly not understanding the procedural requirements. The court will be somewhat helpful, but they will not exeucse any procedure errors. This is why the supermajority of Pro Se Chapter 13s fail.

Did you shop around for 4-5 Chapter 13 attorneys? There are some that will fund at least half of their fee into the Chapter 13 itself. (The standard no-look fee seems to be $3,500-$4,500 for a normal Chapter 13. Some attorneys will take $2K up front and put the rest in the plan. It is good to shop around.)

I'm not saying that it can't be done Pro Se. I'm living proof and we have a few others on here that have dared try and succeeded with a Pro Se Chapter 13. It just takes a lot of work and there are boobytraps everywhere.

[shipo]

Before filing my Chapter 13 with an attorney I went through the exercise of doing a Pro-Se filing; good thing I decided to bail on that idea as the monthly payment I ended up with was less than a third of what I'd come up with on my own. Said another way, the $5,000 I paid my attorney was effectively paid back in just the first several months of my Chapter 13.

[TurnThePage]

Thanks justbroke -- I definitely could benefit from Pro Bono representation. I gotta find one! It's a steep learning curve for sure, but I need to act quickly. I have a creditor that is ready to send the Sheriff out with a Replevin order to cut the chain or break into the garage to repossess the vehicle.

[TurnThePage]

Shipo, I definitely understand the need for an attorney -- and yet, the attorney I consulted apparently had no idea about a "business cramdown" on my new car purchased last September. I could benefit though from the software they use to calculate the monthly payments. I can't see that I'd be able to afford anything more than $100 a month max to the unsecured creditors.

The car payment is tricky because I have to lowball the amount as far as possible so I can realistically afford it, and so the Court will approve the plan -- I've put about 34k miles on it (as a business expense for Uber and Lyft, Uber Eats, Door Dash, GrubHub, etc.)

[justbroke]

I can't see that I'd be able to afford anything more than $100 a month max to the unsecured creditors.

That's the issue with doing a Chapter 13 Pro Se. It's not as simple as saying that you can only afford a certain amount. The amount you pay is based on your calculations and you being able to defend the calculations. More specifically being able to draft a plan and have used adequate and defensible values for expenses. The Trustee is not going to help you and is going to try to squeeze you. This is where experience matters.

For example, did you know that your vehicle gets re-amortized in a Chapter 13. (There's a nuance for vehicles very-very recently purchased.) There are also considerations if the vehicle was purchased less than 910 days prior to filing. Yet another nuance is if the vehicle was refinanced despite being purchased less than 910 days prior to filing.

The car payment is tricky because I have to lowball the amount as far as possible so I can realistically afford it, and so the Court will approve the plan

You don't get to just make up a payment. It is based on a calculation based on the balance of the car over the plan period. The Till Rate, which will be applied, will likely be over 6%. You may have issues negotiating Till. If the more than 910 days old you may be able to bifurcate the claim... but if it is not, then you will be paying the entire balance plus the arrears.

So many rules, so many ways to address expenses. I will say that a Chapter 13 Trustee is definitely going to scrutinize the expenses more for the Pro Se. It's not a matter of trust, it's a matter of experience.

If you file within the next 14 days, it is likely that you're going to file a skeleton petition.It's likely that you'll follow up later with your plan and other schedules. You need to find out if there's a model plan in your District. It's not just about using software to make the calculations (the software just makes it easier for the calcs and fill in the forms).

If all of this is Greek to you, you will likely spend 100 hours over the next 2 weeks trying to learn these things. They are important to the outcome of your plan.

[TurnThePage]

Justbroke, yes and no. For instance, the creditor could say a 2021 Nissan Rogue is valued at over 48k (far above sticker price, and I was stupid enough to sign the financing papers), whereas the Kelley Blue Value beings it down to about 28.5k with 34,000 miles in fair condition. Plus it needs new tires, new brakes, and the dealership was never able to diagnose a "rotten egg smell" from the AC vents. 28.5k is generous for its replacement value, and I intend to argue my case.

[justbroke]

I intend to argue my case.

It's not what the creditor says. It goes by the claim filed by the creditor. If you objection to claim, you may need to set a hearing to determine the value (Motion to Determine Secured Status/Value) and/or they may file an Objection to Confirmation of Plan which you'll have to deal with in an evidentiary hearing.

Chapter 13s value personal property differently than in a Chapter 7 "liquidation" event.

If it goes to a valuation hearing on a Motion to Value, or an evidentiary hearing as part of the creditor's Objection to Confirmation of Plan, then it will be based on what your District allows for the vehicle value. If the vehicle is a so-called 910-vehicle you can almost bet that you'll pay the claim balance over the course of the Chapter 13 at the Till rate.

If it's not a 910-vehicle, then you will argue over the value based on the standard for your district.In my district, the value is the NADA Southeast "clean retail" value as of the date of the hearing. I don't know of any Chapter 13 district that uses anything less than clean retail.

It's not as easy as it sounds. The 910-vehicle status is going to make the biggest difference since the code doesn't allow a debtor to modify a 910-vehicle. If you're arguing that this vehicle is 100% a work vehicle, then you'll have to make that argument but it will likely not change the guidebook and valuation used in your district (e.g. NADA clean retail).

I had to "fight" mine, so to speak. The creditor ended up coming within $500 of my value ... it was less. But they did fight about it for 3 months.