Questions about payments Just got a letter of objection

[253BK]

Hello everyone I just got a letter from the trustee that states our 4650$ payment doesnt cover enough of our repayment anyone know how this works?

Our house is in the payment of 4650$ the hosue alone is 3798$ with taxes and insurance leaving almost 1000$ on the table below is a table from our claims that have filed

If anyone know how this works please fill me in... We cant swing much more than the 4650$ monthly with all our bills and everything!

Any info would be great

Total Number Of Claims: 5

Total Amount Claimed Total Amount Allowed
Unsecured $76053.44 Surrendered cars
Secured $70400.18 Second Mortgage
Priority $22888.15 IRS
Unknown $44924.60 Credit card
Administrative
Total $214266.37

[rrockinggramma]

If you could break down your figures a little more that would help me understand.

According to your post you are repaying about 60,000 to what you listed? If that is the case, it does not cover your second of 70,000 plus AND the priority debt of 22,000 (paid back at 100 percent)

So that would be why the trustee sent his letter. You will need to either pay more into the plan to fund it or strip your second?

1000 X 60 equals 60,000

and your secured and prioity must be paid back debt is 92,000 plus. Soooo you need to figure out a way to add 32,000 to your payback for the remaining months. or 533.00 more a month.
If you can't swing more, then you probably can't afford your house.

[253BK]

The crazy think is the second mortgage should be paid in our 3798$ payment that would free up the differance... our first mortgage is 3120$ and second is 536$ with rears of 44,000 I am not sure how to get anymore info besides what my attorney knows

Is there anything I should look for on pacer? I just started looking through that site in the last few days and dont really understand what I am looking at

[rrockinggramma]

check out your claim then because 70,000 owed to second doesn't match the 44,000 arrearage you are claiming or is 70,000 the whole thing. That might be where the confusing is.

so you actually have 852.00 going to priority and unsecured so that is 51,000 give or take a little and your arrearage is 44,000 plus the 22,000 for the IRS. That is still 66,000 and more than the 51,000 plus you are paying in. Although it won't be a 500 a month increase, to cover your attorney and the trustee, you probably will have to squeeze a couple hundred a month more into your plan I believe.

[253BK]

That isnt so bad I am going to call tomorrow hopefully all goes ok! I will keep you posted tahnks for your help it will help me sleep tonight!

Happy Holidays

[justbroke]

Usually, it's the Trustee fees that get some people... and/or the Attorney and priority fees.

Your lawyer will figure it out. Sometimes the lawyers use the posted Trustee fee of 6% or 7%, but the U.S. Trustee wants new plans to have a fee contingency of 10%... just in case it changes during the plan.

[sassiebaz]

Can someone explain how it all works?

[rrockinggramma]

It can be confusing.

Claims that are filed fall into certain categories.

IRS claims and taxes are considered Priority claims and those are always paid back at 100 percent. However interest and penalties cannot accrue so that is why it is advantageous to include them.

Secured debt like mortgages and cars (unless crammed down) are paid at 100 percent. However again only principal, no penalities and fees can be added.

The attorney is paid at 100 percent.

And the trustee gets his percentage which he sets (sometimes up to 10 percent. My trustee was always in the 4 percent range)

And then all of your unsecured debt (credit cards and anything else not secured by property that is worth anything)

The payments go in this order:

The attorney gets paid first before any other creditor. (and the trustee gets his percentage with each disbursement)
Priority debt
Secured debt
Unsecured debt (they get what is left over. Determined by how much money is left over in your plan and how many creditors of yours file claims. No claim filed they receive nothing and are discharged at the end of your plan)