Bad News...Trustee says we are "the test case"

[lrprn]

I don't want to make you more anxious, Dovette, but our trustee filed an objection to our Ch 13 plan citing that our "plan does not amortize with $(dollar amount) pool to general unsecured creditors, per the means test." We are high income filers also, and from your description I'm thinking our objection is very similar to yours. In our case there's a difference of $300/month, and our trustee is taking the position that our monthly payment should be increased by that amount. We were told by our lawyer that we were the perfect test case for this issue in our district as well.

After our lawyer and our trustee could not agree on a compromise, we had a pre-trial hearing with our bankruptcy court judge, the trustee, our lawyer, and ourselves present last October 06. Again, no consensus was reached. So 11 months after filing, we are hanging out paying our monthly payment on time (does not include the $300 the trustee wants) waiting to see if the trustee decides to head to court to get an official ruling from our bankruptcy judge on the matter.

However, during our pre-trial hearing, our judge appeared to be leaning in our direction and the latest case law decisions about this mismatch in Ch 13 cases are as well. Our lawyer thinks our trustee is going to drag his feet as long as possible because our trustee doesn't want an official ruling by our judge that will not support his interpretation of the new bk law. So for now we remain unconfirmed with no control over what's going to happen, and we just keep making our monthly payment on time staying under the trustee's radar. Eventually our trustee will either request a court date for an official hearing or he will decide to withdraw his objection. Only time will tell.

[dovette7]

Sounds very similer. Did you have to pay additional to attorney to go to these hearings?
I guess it is good news that the trustee is in our favor on this. Just praying and trying to be patient until Thursday and of course based on your experience, I may not have an answer Thursday either.

[aa06a47]

Thanks for the support. I sure hope so...gotta have faith right now in the midst of all this whirlwind around me. In normal cases, does the trustee decide the payment based on means test and scheduale j? That's what I thought. Ch 13 cases from people on here.... where did the actual payment come from? I guess my trustee does not or feels he cannot decide a payment that would be so much diffrence in means test and scheduale j.

I still am confused as to why we have to argue it because I thought that trustee determined payment.
I think my attorney's feel I am too involved and want to know EVERYTHING.. which apparantly their other clients don't. But I really do want to know EVERYTHING and UNDERSTAND EVERYTHING.

The question you ask above is the basis for the test case and intrepation of the law. Some trustee's feel the means test is it, what you see is what you get. Some trustee's feel the I&J is the actual payment. In my particular case, the I&J and the means were pretty close. My payment ended up a little bit higher than the means test showed, but my attorney stated I will get done "early". Still don't know about that one.

In your case, you had a significant income decrease (if I remember correctly) and that reduction is not the basis of your means test figures. There are rulings that the plan should be based on "future" income instead of "past" income (which is what the means test is). You judge should rule in your favor with the decreased income. I am not sure why the trustee even wants to fight it and take valuable court time up . Using this as a test case is not practical. In my opinion, the test case should be all things being equal (income/expenses before and after being the same).

[aa06a47]

I don't want to make you more anxious, Dovette, but our trustee filed an objection to our Ch 13 plan citing that our "plan does not amortize with $(dollar amount) pool to general unsecured creditors, per the means test." We are high income filers also, and from your description I'm thinking our objection is very similar to yours. In our case there's a difference of $300/month, and our trustee is taking the position that our monthly payment should be increased by that amount. We were told by our lawyer that we were the perfect test case for this issue in our district as well.

After our lawyer and our trustee could not agree on a compromise, we had a pre-trial hearing with our bankruptcy court judge, the trustee, our lawyer, and ourselves present last October 06. Again, no consensus was reached. So 11 months after filing, we are hanging out paying our monthly payment on time (does not include the $300 the trustee wants) waiting to see if the trustee decides to head to court to get an official ruling from our bankruptcy judge on the matter.

However, during our pre-trial hearing, our judge appeared to be leaning in our direction and the latest case law decisions about this mismatch in Ch 13 cases are as well. Our lawyer thinks our trustee is going to drag his feet as long as possible because our trustee doesn't want an official ruling by our judge that will not support his interpretation of the new bk law. So for now we remain unconfirmed with no control over what's going to happen, and we just keep making our monthly payment on time staying under the trustee's radar. Eventually our trustee will either request a court date for an official hearing or he will decide to withdraw his objection. Only time will tell.

I would push for a decision soon. It is my understanding that whatever the payment is confirmed at, you will have to make up the difference that you have not paid while waiting for confirmation. So, 1 year x 300 = $3600.00. That would be alot, at least for me, to come up with. My case was confirmed so fast, I was able to make the difference up in a couple of months. Not sure what I would do if I was a year behind!

[dovette7]

I asked my attorney about if payments were increased..would we have to make up difference. She said NO. However she has been wrong and made errors on a number of things so far so I don't know if she is correct or not. Don't know where that money would come from in addition to more money to attorney to even go to court. Attorney said they would make a pay plan, however being in bankruptcy and all my money being accounted for, where would they expect me to get that?

I can't wait to post something really positive on here with one of these Smilies smiling and yelling in glee!!

[aa06a47]

dovette, that could be trustee to trustee. When I asked my attorney, she said yes, but I could make them up a few dollars at a time in the plan as long as it added up. Could be that some trustee's accept the original plan until the confirmed plan settles out.

[daisey]

our payment increased at confirmation and we did not have to make up the difference........at least not as of yet, or attorney acted like I was nuts when I asked if we needed to.

[lrprn]

I would push for a decision soon. It is my understanding that whatever the payment is confirmed at, you will have to make up the difference that you have not paid while waiting for confirmation.

Thanks, aa. Like Daisey, our lawyer told us that he did not think we would have to make up the extra - it's the trustee who is dragging his feet, not us. But he walked us through this worst case scenario:
* IF our trustee's objection does go to court and
* IF our judge rules against us AND says that we have to pay the $300/month extra AND says that we have to make up the extra owed back to the start of our plan, then
* since currently our plan payment at its current level is going to pay 100% back to all our creditors that filed claims in a little over 40 months and
* our unconfirmed plan is currently set for 57 months
* we'll just keep on paying the higher monthly amount owed until we make up the extra owed (it will be very hard but we'll do it because we have to).

Everyone, please keep sending lots of positive thoughts our way!