What can they do to you if you don't make your Ch. 13 payments (by choice)?

[PaKettle]

Okay, I'm good to go with a Ch. 7 so this isn't for me, but for a friend of mine who has already been approved for a Ch. 13 plan.

He says the plan he has leaves him with so little money it's hard to have any kind of life and he's thinking of just stopping paying and "disappearing", perhaps to another country.

I told him that if he does that they may attach his social security income, which he is only a few years away from getting, and so on. I told him to try and go back to the judge to plead for a better payment plan but he says they told him this is the best he can get, already.

So this brings up the question:
What can they do to him if he "skips" on the Ch. 13 plan?

Can they attach his Social Security benefits? Can they put him in jail? Attach his 401k? What is the law regarding skipping out on a Ch. 13 plan? If he were to "disappear" could he still re-appear to get his soc. security in a few years, or would they automatically get that or part of that? (I don't know how much he would be getting from SS; I did not ask.)

But this brings up another point: Why is it that some people seem to get plans via Ch. 13 that really seem unfair, that they are left with almost nothing to live on? Is it mostly due to a bad attorney, a bad judge, or ???

[SinkingFast]

Getting a reasonable Ch 13 Plan is partly luck of the draw, partly the attny you hire, and partly the Rules of the Court you file in.

Luck of the draw would be the Trustee that's assigned to your case.

Some Trustees are very lay back. Once you file and are Confirmed, they're done with you as long as you make your payments on time. Very nice to work with if you have a problem and need an adjustment. Don't have to see your filed income taxes every year. Just stay below their radar and life goes on pretty normally.

Other Trustees are "letter of the Law" types. Pin filers down to their last penny in their budgets. Want to see every year's filed income taxes. If you get a pay raise, they wanna know. etc. etc. etc.

Some Courts, in general, are reasonable. Some Courts, in general, are stricter.

Even tho we have one BK Law, it's not applied the same every where in the country.

Having an attny that will work for you and your interests rather than grease the palm of the Trustee. As one attny told us,.......... Flirting on the edge of the Code is where Law is made. But under New Law, that's where an attny can be held accountable now too. So many are less than enthusiastic to pursue their interpretation of the Code.

Pretty much, I **think**,.......... All your friend would have to do is quit making his payments. The Court would Dismiss his case for non payment. Generally speaking, not making your Plan payments is a "Dismiss without Prejudice". Meaning your friend could refile on the same debts again in the future.

At that point,........ After getting his case Dismissed,......... The BK Court would be the least of your friend's worries. Once the Ch 13 Plan is Dismissed, the Automatic Stay lifts and your friend's Creditors will be all over him. Even worse than before.

[CindyLou]

could he not reduce his work hours or change jobs and convert to a 7? seems easier than "disappearing" to another country!

[chpxiii]

I'm sorry but, how much of a "life" does he want? Granted, I know that we can't always anticipate what is going to happen - I didn't myself. But I knew that I owed money and I had to pay it back. My chapter 13 helped me to reorganize my finances and get it under control. For the longest time I didn't have "much of a life" myself. But I owed that money that I borrowed. There were times when I didn't have *any* life, but I made that payment to the trustee.

At anyrate, I think SinkingFast has the best post so far. I think I heard somewhere that at some point a person can convert to chapter 7, but I don't know the laws on that.

Good luck to your friend.

[PaKettle]

Thanks for the comments.
I passed these along. He's going to see if he can get an adjustment on his payment plan. There are payment plans and then there is indentured slavery... From what he has told me, his plan is more toward the latter.

He'd still like to know:
If he were to skip out on his plan and his debts, could they attach his social security income a few years from now? Let's say he does go to another country (He's originally FROM another country, and has relatives there, so it would not be that hard for him to do.) Then he would just have his social security payments set up to be forwarded to him, there. Could the creditors touch those ss payments?

[PaKettle]

could he not reduce his work hours or change jobs and convert to a 7? seems easier than "disappearing" to another country!

Is one allowed to VOLUNTARILY reduce one's work hours? I would assume not...
And changing jobs... let's say one were to quit a job at $20/hour and take one at $10/hour, then file for a conversion to Ch. 7. Wouldn't they Ch. 7 and Ch. 13 trustees or whatever they are, look askance at that?

In MY Ch. 7 position for example: Let's say that I get offered more hours at work or a pay raise, but I turn it down voluntarily because I want to continue to qualify for Ch. 7. Can I get away with "manipulating" my income in that way to qualify for Ch. 7? I would assume that doing so voluntarily would be illegal. No?

[lrprn]

Could the creditors touch those ss payments?

Filing an amended Ch 13 plan is the best way for your friend to go at this point. He has a chance to redo his expenses and liberalize them to make his life more tolerable. And no, social security cannot be garnished by creditors whether he's in this country or abroad.

[CindyLou]

There is nothing in the BK law that I know of that requires someone to work at all and its his private business if he quits a higher paying job for a lower paying job. Its not the courts business. Maybe he hates the one for 20 and the one for 10 is his life long dream...who knows.... I have seen postings on here where people have quit jobs to qualify for chpt. 7. Please chime in if anyone remembers those......

[PaKettle]

Thank you! I'll pass this along...

Thanks to all for the answers.
I'll pass these along!

[treehugger1]

The new law allows one to convert a 13 to a 7, provided one will pay as much required under a 7. However, who knows how the local trustee will interpret this rule. Others have quit jobs and converted to chapter 7, so this can be done. If your friend is currently drawing social security, did your friend retire? If so, he must have retired with a substantial benefit to qualify for a 13. If your friend cannot get a reduced payment plan, and doesnlt care about his/her future credit, then there is little any creditor/collector can do about garnishing social security and/or qualified pension/retirement plans.

[aa06a47]

Thanks for the comments.
I passed these along. He's going to see if he can get an adjustment on his payment plan. There are payment plans and then there is indentured slavery... From what he has told me, his plan is more toward the latter.

He'd still like to know:
If he were to skip out on his plan and his debts, could they attach his social security income a few years from now? Let's say he does go to another country (He's originally FROM another country, and has relatives there, so it would not be that hard for him to do.) Then he would just have his social security payments set up to be forwarded to him, there. Could the creditors touch those ss payments?

A chapter 13 is voluntary. The court will not attach nothing, and I don't believe a creditor can attach social security. Sounds like he wants to just skp out on his debt.

[PaKettle]

A chapter 13 is voluntary. The court will not attach nothing, and I don't believe a creditor can attach social security. Sounds like he wants to just skp out on his debt.

No, he doesn't WANT to, otherwise he'd have done that in the beginning instead of filing Ch. 13.

He is not yet collecting Soc. Sec., it is something he will be collecting in the near future, that is why he was concerned about it being attached.

I am going to recommend as some have advised, that he go back and try to convert to a Ch. 7, OR get a better Ch. 13 deal.

Thanks to all.

[6ftladycop]

What if You stop making payments: reply

I thought based on all that has been said here that bankruptcy or chapter 13 would allow you to have some things. If they will take your money down to the penny, maybe the things you want to do are unreasonable. No need to get upset because I am in the same boat as you are, I just wanted to check and see if you are trying to live like you did before the bankruptcy...if so, most of us here already know we have to change our lives once we file.