Chap. 13- Exactly how many days late can you be on trustee payments?

[TiredandWeary]

Hi, all. I am new to this forum, but am thankful to have a place to learn more and share more about all of our experiences!

I have a question which doesn't appear to have been answered recently very clearly...my husband and I have been in Chap. 13 BK for the past 12 mos. Exactly how many days late can you be on a payment to the trustee before they will "throw the book at you"? I mean, the last two months or so, we have been 3-6 days late according to the info posted on 12datacenter.com website for our case. Does this severely risk getting dismissed? I can't take the mental and psychological stress this continually puts me under! I am thinking things are fine...no news is good news...but am worried that they may suddenly send us a motion to dismiss or something out of the blue for being a few days late. I mean, come on, are the trustees really that aggressive when it comes to Chap. 13 plans? I mean, if we were all doing well financially and not having any trouble making ends meet, then none of us would be in BK in the first place! I just find it quite disturbing to think that I can never be a day late without getting dismissed. I would appreciate any insight others may have regarding this.

Thanks so much!

~Chap. 13 BK in Florida (filed 07/31/2006)

[arkienurse]

I just have to ask for everyone.... Why were you late with your payments?

I would do anything possible to be sure that my payments were in on time if I had to make them myself.

[TiredandWeary]

Husband's paydays came right at the BK trustee due date. So, mailing time obviously was a factor. But, basically the previous payday, which we had intended to put a portion of in order to make the payment on time had to be used entirely to keep our "boat floating". We've gotten stuck in a terrible situation with trying to pay back some ridiculous payday advance loans and our bank account has been consistently in the negative for the past year. It's a whole vicious cycle of being negative before the payments for those stupid payday loans get debited, which ends up costing us double the negative account balance fees (@ $25 per transaction)...it's a whole awful scenario which I can go into if needed elsewhere on this site, but suffice it to day that if you have been caught in the payday loan hellhole, you will totally know where I am coming from.

Simply put, not having the money to make the payment exactly on time is what caused us to be a few days late...and having to wait until the next payday to go to the bank and get the cashier's check to send to trustee. Does this make sense? Doesn't anyone else have these issues with coming up short right at the time you have to send off the trustee payment?

[lrprn]

I would do anything possible to be sure that my payments were in on time if I had to make them myself.

Arkie is right - NOTHING is more important than making your trustee payments on time. Did something happen recently (unexpected car repair, illness, ARM mortgage increase, etc) to make the payment difficult for you? Or have you been operating very close to the financial edge consistently since you filed?

If there's been a significant change in your income or expenses since filing, your lawyer can rework the Means Test to see if filing an amended Ch 13 plan can get you a more livable payment.

Frankly depending on how picky your trustee is, he/she has the right to dismiss your case if your payments are even one day late. If your trustee is more understanding, you might get away with it if it isn't a pattern (which yours seems to be becoming). Is your lawyer aware you are sending in some payments late to the trustee?

[arkienurse]

Husband's paydays came right at the BK trustee due date. So, mailing time obviously was a factor. But, basically the previous payday, which we had intended to put a portion of in order to make the payment on time had to be used entirely to keep our "boat floating". We've gotten stuck in a terrible situation with trying to pay back some ridiculous payday advance loans and our bank account has been consistently in the negative for the past year. It's a whole vicious cycle of being negative before the payments for those stupid payday loans get debited, which ends up costing us double the negative account balance fees (@ $25 per transaction)...it's a whole awful scenario which I can go into if needed elsewhere on this site, but suffice it to day that if you have been caught in the payday loan hellhole, you will totally know where I am coming from.

Simply put, not having the money to make the payment exactly on time is what caused us to be a few days late...and having to wait until the next payday to go to the bank and get the cashier's check to send to trustee. Does this make sense? Doesn't anyone else have these issues with coming up short right at the time you have to send off the trustee payment?

Why on earth didn't you file on the payday loans?

I guess I am one of the lucky ones. I wasn't given an option to do anything except have my payments deducted from my paycheck before I even see it. Granted there have been some weeks that I took home $300 for 2 weeks, working as an RN, but my payment has always been there.

[lrprn]

We've gotten stuck in a terrible situation with trying to pay back some ridiculous payday advance loans and our bank account has been consistently in the negative for the past year.

Hang on....am I understanding this right? You are continuing to pay on payday loans even though you are in bankruptcy?

Did you take out these loans before you filed (which means they should have been included in your plan and you shouldn't be paying on them any longer - your automatic stay prevents the payday loan place from continuing to collect payments). Or did you take out the loans after you filed (which is a huge no-no without your trustee's prior permission)?

[TiredandWeary]

Oh, dear...I can see I opened up a can of worms by asking the original question on this thread!

OK, here's the story. We had retained the attorney in Jan. 2006 and did not officially file until July 31, 2006. It took that long I guess to get all things in order. Anyway, during those months, we were still struggling, as we were attempting to get our mortgage current and to keep it that way in order to avoid including the mortgage payment into the trustee payments. I had to take out a couple of small payday loans a few times in order to prevent utilities and such from being turned off. It's been that tight for us here. I fully knew when I took out the payday loans that I would be filing Chap. 13 soon and I had every intention to pay those loans back. It was never my intent to defraud those payday lenders or to try and take out loans when I knew I would soon be declaring bankruptcy. Not to mention the fact that I believe you can't do so within 180 before filing anyway. Isn't that right? You can't include unsecured debts that you've incurred right before declaring bankruptcy? Anyway, it tooks several months to get them nearly paid off, which happened after the filing took place in July 2006.

While getting close to paying these stupid loans off, I found myself in a situation again where we were living to close to the financial edge and were consistently having our "backs against the wall". Checks were bouncing and I was trying to prevent things like insurance coverage lapses, etc. So, I had to renew these stupid loans after nearly having had them paid off. Needless to say, we've been caught in this horrible cycle that we are only just now beginning to emerge from. It's taken this long to nearly pay those stupid loans off and I will NEVER, EVER, EVER do that again. I will have to swallow my pride, should this happen again, and simply resort to borrowing from a family member temporarily if need be. But, I am hopeful that this will not happen. I will NEVER touch a payday advance loan again...it's that much of an insidious trap!

So, that's the basic story of it. Our mortgage payments did end up getting put into the bankruptcy because a month after filing, and several months before the plan confirmation, we fell behind on our mortgage payment one month and the mortgage company went into panic mode and filed for it to be included. I guess I don't blame them for protecting their interests.

OK, well that's my reply for now. I definitely do not intend to be late at all on more payments, but I just wanted to see if anyone else out there has had any experience realistically with being a few days late? I can't imagine that we're the only people whom this has ever happened to in a Chap. 13 BK, despite that fact that neither of us has had a terrible setback such as a job loss or illnesss so far.

~Tired & Weary in FL

[Minnymouth]

Okay, you have created a good mess for yourself..............

DO NOT use anymore "payday loans" - do without, make a late payment on utitlites or anything else to keep your Chapter 13 payment current and on time........... You are looking at "dismissal" if you continue to do what your doing.....

Get a family member to payoff payday loans for you if you can and get out from underneath of them.....

Since your seem to be struggling so hard under the present Chapter 13 plan check with your attorney about getting the plan amended to a smaller payment for the time being. But you have to have a better reason than - I'm tired of being broke, or I just want extra spending money..... THAT'S NOT GOING TO HAPPEN...... not while in a Chapter 13.

You best hope and pray that the Trustee does not find out that you have been doing "payday loan" while in Chapter 13. And you attorney is going to be highly "teed-off" also...... You cannot create more debt while y our in a Chapter 13..........

Suck it up, tighten you belt, get yourself on a budget...... be a lean machine till the Chapter 13 is over..... will be the best thing you ever did..... believe me!!

Start cutting corners, quit using payday loans, and get back on track.......OTHERWISE there will be "bad" percussions for your actions. Right now YOU BELONG TO THE TRUSTEE AND THE CHAPTER 13 PROGRAM...... THEY CONTROL YOUR FINANCES....... and this is the Federal Government, not "joe blow" down the street............

If possible discuss this with your attorney(and believe me, he's going to be very unhappy with you) and see if you need to do a Chapter 7 liquidation to help solve all your problems...... may be the only way out for you now.....

If your late payments were due to illness, emergency, etc and Trustee will work with you.......but not over payday loans that your not supposed to be doing........

Minny

[TiredandWeary]

Thanks for all the responses. We did have a family member loan us some funds recently to pay off the payday loans completely. We should be able to pay the family member back within the next few months. Anyway, it's not as if we haven't tightened our belts by now. We have done nothing except buy groceries and gas. I think we have eaten out in a restaurant maybe 5 times in the past year. We don't go to movies, we don't take the kids to any theme parks in the area. We never go on vacations, I have had hubby cut my hair for the past two years, neither of us has cell phones, none of the kids participate in any extra-curricular activities (dance lessons, swim lessons, soccer, etc.)...the list goes on and on. I totally understand that our lifestyle can not be what it was prior to filing bankruptcy. That's what frustrating...knowing that we are living as basic as we can and it just never seems to work. There is no way with three children that I can let a utility bill be late to the point where we have utilities get cut off. That's ridiculous! When there is no room for any bill to be late, where is one supposed to ger reprieve when your account comes up short every single week? There is literally no where to turn. It's no wonder to me that many people, including ourselves, end up in debt in the first place in life. When you are never able to save a dime, how in the world does anyone else keep a boat floating when your back's up against the wall? It's catch-22.

Anyway, I am hopeful that now the payday loans have been paid off, we can finally begin to emerge from all of this and actually be able to survive without having a negative checking account balance. Maybe now we can begin to actually save something.

Thanks again for everyone's responses.

[lrprn]

That's what frustrating...knowing that we are living as basic as we can and it just never seems to work. ... When you are never able to save a dime, how in the world does anyone else keep a boat floating when your back's up against the wall? It's catch-22.

Sounds like you've done everything humanly possible to cut your budget, T&W. Didn't mean to open a can of worms or point any fingers - just wanted to be sure I understood your situation and you understood the possible outcomes of payday loans while your Ch 13 is active.

It's obvious you've learned a hard lesson here, and it's great news that you've paid off the loans before your trustee found out. Still do let your lawyer know what's happened so he/she is aware and won't be caught off guard if the trustee somehow uncovers the loans (unlikely but you never know).

Hang in there - hopefully sweeter times are just ahead for you and your family!

[Minnymouth]

Okay, sounds like you need to see about re-working your payment plan......

With the cost of EVERYTHING going up (utilities, gas, groceries, etc) it may be feasible for the Trustee to work out a better plan for you.

All you need to do is contact your attorney and let him discuss it with the Trustee..... especially if you are in the "hole" every month after your basic bills are met...

You never said how long you have been in your Chapter 13, but if its been a year or more, then the price of everything has gone up tremendously since your plan was designed and approved.

This the first thing I would do is contact my attorney and run it by him....see where you stand and options available to you. The Trustee would rather see you stay in the plan at a lower rate, then to drop out of it before you finish the plan.....

Sorry, I sounded so "harsh" about the payday loans, but they are money pits and have been the downfall of many a person on this forum.....

We just want you to know that during a Chapter 13, you financial life belongs to the Trustee, and any actions you take to mess that up, can cost you in a dismissal of your case, and then your CREDITORS ARE BACK in full force, plus!!

Cover your butt, and we know your struggling (nobody said it was going to be easy), but you won't regret getting to the end of the tunnel....... Will be one of the best decisions you've ever made in your life..... you'll see!!

[TiredandWeary]

Yes, we've just hit the 12 month mark into our Chap. 13 plan this month. I'm not sure that reworking the payment plan would actually benefit us right now. We've eliminated some things in recent months that should help our overall budget out. We had been paying approx. $600 a month in child care costs for me to work part-time. But, I have since changed my schedule and am able to pick up my two oldest from school when they dismiss so that I no longer have to pay to put them after-school child care. Also, my youngest just now qualifies for a program in our state beginning in August that will basically pay for her part-time preschool education. It's called VPK (Voluntary Pre-K) and the state [Florida] voted a couple of years ago to pay for 15 hours per week for any 4-year old to attend the pre-K program of their choice, from a selected group of providers. Fortunately, the preschool she's already been attending is one of those providers. That expense alone has been costing us over $350 a month in the past several years. Since she is now entering her last year of preschool before kindergarten, we will no longer have to pay that amount every month. So, overall, we will be able to save $600 a month in child care costs based on what our original payment plan to the trustee had submitted. Thankfully, the hours and days that she will attend coincide with my current work schedule. So, in that regard, we should finally start to see some improvement in the overall monthly budget within the next month or so.

Anyway, I think in our case, the payday loans became much more of a slippery slope than I EVER anticipated and we were already struggling so hard just before filing. We never really got off to a solid start and things just seemed to keep getting worse by the month. When you are consistently in the negative in your bank account, every single transaction that's made gets compounded by outrageous bank overdraft fees of $25 per transaction. We found ourselves spending literally hundreds of dollars each month in bank overdraft fees! That certainly did not help our situation at all either! It's been an exhausting 12-18 months so far and I would not wish this circumstance on anyone!

Thanks again,

Tired and Weary

[FeelingHopeless]

I just wanted to say I feel your pain T&W. Now, I've never had a Payday loan ... but way (WAY) back in the day when I was single and just starting out, there was a time when every single dollar I made went to bills.

At one point, my brother came to visit and started riding me. He said, "You need to make a budget. Everyone has money that "slips away." You can't know where every dime goes." And I said, "YES ... I do know where every dime goes. If you have $800 a month in bills and $750 a month in income, then it's very EASY to know where every dime goes."

Things were hard for awhile ... it came down to trying to shop for groceries on $12 a week. You know ... a carton of eggs is 12 little meals. Or if you buy the cheap macaroni and cheese, it's only a quarter a box. Things like that.

Back then, it really wasn't debt ... as much as it was immaturity. I'd chosen an apartment that was *way* over my budget and I chose to finance a car when I should've driven my old beater around a few more years. A move to a more reasonable apartment made a world of difference.

Years go by ... I'm older ... and like Scarlett O'Hara (shaking fist) ... I will NEVER eat quarter macaroni and cheese again (cue dramatic music). Hang in there ... things get better.

[sandhall]

If i would ever have to make a choice of food or paying light bill I would look at calling a church to ask for help lots of churches nowadays have food closets and you need not be a member to use it. and when you get back on your feet make a canned good donation to that church

[CindyLou]

Close your checking account and go with cash if you are running so close. This would avoid your fees!! Or just keep enough in it to keep it open. When you are living to the penny a checking accout is not always the way to go.