Unexpected letter from Trustee increasing base to unsecured creditors. Please help.

[PurplePanda]

Merry Christmas to me. I just received a letter from the trustee increasing my base amount to be paid to unsecured creditors by over $12,000. It is a holiday weekend so I will not be able to contact my attorney's office until Tuesday. I do not understand what is happening and I feel like my biggest fear has become a reality.

After review of your case, it was noted that your Plan was running less than the Applicable Commitment Period as required by the terms of your Plan. All cases less than 100% to general unsecured creditors are required to pay all disposable income for the Applicable Commitment Period, including all tax refunds, if any. This process allows for general unsecured creditors to receive more than the percentage or base amount provided in your confirmed Plan. Pursuant to your Chapter 13 Plan, your income commitment period is 36 months.

Your case has been adjusted to meet the 36-month income commitment provision in your plan. the base amount to be paid to the general unsecured creditors has been increased from $3,441.29, less any additional approve attorney fees, to $15,757.83 based on a 36-month payment calculation.

Please note, if you miss or have missed any of your regular Plan payments or have failed to turn in any required tax refunds, the length of time that your Plan runs will increase.

Please contact your attorney if you have any questions or need more information.

I don't understand any of this. I am 16 months into my plan and because of some large employment bonuses I have received since filing, all of my secured creditors have been paid in full and my unsecured creditors have already received more than the initial base amount. Does this mean that my plan payment will be increased to cover the $12K discrepancy? If so, why doesn't the letter state this and provide the new monthly payment amount? I have never missed or been late on any payments.

Any help would be greatly appreciated. It's Christmas weekend and my anxiety is off the charts. Thank you.

[SuzHous]

Good morning!
The timing of this letter is unfortunate. Are you saying that your plan was confirmed with less than a 36 month commitment period? It is my understanding--and I may be 100% incorrect--that the minimum commitment period is 36 months, and unless you are on a 100% plan, you have to continue paying through that time period. However, I do not think that means your monthly payment will be increased.
Someone with more information than I, may respond, but that is my understanding.
I know you said you can't get ahold of your attorney until Tuesday, please try not to stress about it and enjoy your Christmas weekend.
sj

[PurplePanda]

Are you saying that your plan was confirmed with less than a 36 month commitment period? It is my understanding--and I may be 100% incorrect--that the minimum commitment period is 36 months, and unless you are on a 100% plan, you have to continue paying through that time period. However, I do not think that means your monthly payment will be increased.

No, my plan was confirmed for 36 months. I was under the median income at the time of filing. I am currently 16 months in and have 20 months to go. My confirmed plan base repayment amount of $3,441.29 was the amount of my non-exempt assets and my payments to unsecured creditors has already exceeded that amount. As of today, I have paid almost $10K to my unsecured creditors and I have paid the secured creditors in full.

But, I think I may have figured this out. I haven't stopped thinking about this and there is only one way I can make sense of this letter. To date, but for the minimum 36 month commitment period and the requirement to pay 100% of my disposable income to the plan during those 36 months, I have paid my base plan in full, in theory. Considering all secured creditors have been paid and my base plan amount has also been paid, and that I still have 20 month to pay, my plan base must be increased to account for the additional monthly payments to be paid in the next 20 months. Right? If I take the base amount for my non exempt assets, plus the amount of my remaining monthly payments, plus the remaining amount of the claim for allowed attorney fees, and then add an additional 10% of that total for the trustee's fees on that amount, that totals $15,771.29, which is about $20 off from the trustee's amended base amount. That would make perfect sense in my mind, but I may have no idea what the heck I am talking about.

[justbroke]

Unfortunately you'll have to confirm with your attorney. But, in the interest of you getting some sleep tonight and over the Christmas break...

I believe that your plan had the wrong number of months for some reason. They adjusted it to 36 months and updated the plan base amount to reflect that correct period of time.

It doesn't read as if there is an actual payment increase. Without a very detailed look, there's no way for anyone to really give you the bottom line answer, but I think it's just an accounting issue on their side.

[PurplePanda]

Unfortunately you'll have to confirm with your attorney. But, in the interest of you getting some sleep tonight and over the Christmas break...

I believe that your plan had the wrong number of months for some reason. They adjusted it to 36 months and updated the plan base amount to reflect that correct period of time.

It doesn't read as if there is an actual payment increase. Without a very detailed look, there's no way for anyone to really give you the bottom line answer, but I think it's just an accounting issue on their side.

Thanks for responding, justbroke. It helped ease my stress to hear you say that you didn't think there would be an actual payment increase. I tried calling my attorney this morning and found out the office is closed today. I emailed him and he responded to say that he would be in touch with me in a day or two once he has had a chance to get back in the office and see the letter. In his email, he said he thinks it's "simply a calculation of the base from what you’ve paid in and what is left of the plan" and he thinks there is no concern. He hasn't seen or read the letter yet, so I am still not getting my hopes up because there is more to it than what he said in his email. I do not expect him to remember the details of my case and he clearly doesn't, or else he would realize that my confirmed base plan amount has already been paid. Obviously, I am aware that I am not paid in full until either the end of the 36 months or until I have paid 100% of my unsecured debt.

In response to what you suggested, my plan did not have the wrong number of months. It was confirmed for 36 months with total monthly payment of $425. The base repayment amount was $3,441.29 (representing unexempt equity) and $125 of the monthly payment was attributed to that base repayment amount. Also included in my plan was a secured boat loan for $20K which accounts for the the remaining $300/month. I am 16 months into my plan and to date, I have paid in over $40K. So, the base amount, the secured debt and all attorney fees have been paid in full. I still have 20 months left in my plan, so there will be an additional $8,500 of monthly payments to be paid into the plan. I will also turn over 50% of my monthly work performance bonuses over the next 20 months, which will be considerable. My plan was confirmed with a 3.9% payback to unsecured creditors but because my work bonuses have been so high, they will likely receive around 75% by the time my plan is complete.

I think I have a fairly unusual case, in that I was under median at the time of filing, it was driven by a very small amount of equity, and my work bonuses have been much higher than expected. I am wondering if the letter I received was a form letter of sorts that doesn't really apply in my case but was used to increase the plan base seeing I have already paid the base and all secured debt in full. Is that possible? I guess I will know more once I hear back from my attorney. I will let you know what he says. Thanks, again, for your help!

[justbroke]

In my Chapter 13, I had to surrender my tax refunds and any bonuses. This increased my plan base. The plan base was adjusted annually to reflect the "additional" money that came into the plan. This may be the reason and it has nothing to do with your payments. It may simply be accounting to keep up with the "additional" mopey that came in above the plan base what was calculated when your plan was calculated.

[PurplePanda]

In my Chapter 13, I had to surrender my tax refunds and any bonuses. This increased my plan base. The plan base was adjusted annually to reflect the "additional" money that came into the plan. This may be the reason and it has nothing to do with your payments. It may simply be accounting to keep up with the "additional" mopey that came in above the plan base what was calculated when your plan was calculated.

Yes, I am thinking (and hoping) this is what is happening with my case as well. Thank you!

[PurplePanda]

In my Chapter 13, I had to surrender my tax refunds and any bonuses. This increased my plan base. The plan base was adjusted annually to reflect the "additional" money that came into the plan. This may be the reason and it has nothing to do with your payments. It may simply be accounting to keep up with the "additional" mopey that came in above the plan base what was calculated when your plan was calculated.

My attorney's office contacted the Trustee's office to find out what is going on because they didn't understand the letter either. The Trustee told them that the base amount was being increased because I have already met/paid the original base amount prior to the 36-month ACP. So, to determine the new base amount, the Trustee multiplied my disposable income by the remaining months left in my plan and added the amount that I have already paid. I checked the math on that and my numbers are coming up different, but whatever I guess. My payment isn't being increased and my plan isn't being extended. My attorney's office also confirmed that my plan will be completed at exactly 36 months seeing the first requirement has already been met.

Thanks, again, for helping to calm my panicked brain over Christmas. The Trustee's timing sucked.