Trustee and Attorney Fees

[Floridagail]

My Stepdaughter and H, filed chpt 13,Apr 08, they were 8000 behind on house and car. and of course cc debt. They were confirmed and are paying 2795.00 a month for 60 mos. Paying zero to unsecured. attorney fees 3500 and trustee 8800. Basically 2795 is house pmt and car pmt + incl 200 month to catch up debt owed on them, and trustee and atty fees. They had missed 2 pmts, almost got dismissed, H mother gave them the money to catch up. No way can they afford this payment. I do not see how they will make the plan. My ? what happens if convert to 7 or dismissed regarding the trustee fees and attorney fees ( 12,000) they owe?
Or are they the first to get paid in plan.

[liz417]

These are priority debts and will be paid 1st through the plan. If they are having problems, maybe they need to sit down with their attorney and discuss the problem. We don't know if the repayment plan isn't written well or your daughter and hubby just can't stay within their budget. Something needs to give. Maybe they have too much house payment and should just walk away, they need to address this will their attorney. Has there been any change in their incomes/jobs?

[Floridagail]

Alittle of both. They just cannot afford a house pmt of 1900 (incl 2 mortgage) and car pmt too. They insist on wife only working parttime so their son can be home schooled. They will loose their home I am afraid. When the MIL gets tired of bailing them out. THe house is 10 yrs old and air went out. She bought them or signed for a new AC
4200. So the house is only worth about 80,thousand now. Florda values have gone way down. He may get laid off from job. She could go fulltime but not make as much as he did. Just have to hope for best. THanks for info.

[HHM]

The trustee and attorney bare the risk of the plan fails. The trustee gets a percentage of whatever is actually "paid" into the plan. So there is not debt for the entire trustee fee. The attorney's fees can be a little different and will need to be worked out with the attorney. Most attorneys assume the risk of the failed plan and will not pursue the fees.

[Floridagail]

They did pay the attorney 1300 upfront fees and bal in plan. It seems awful to me the Trustee gets so much. However they did not have to pay unsec creditors. Thanks for info.

[woeisme]

if they can't afford the house, they should let it go. no point throwing money away on something that isn't worth it, and if house is only worth 80K, no way should the mortgage be that high (that's what my house cost, and my monthly payment, with taxes and insurance included, is only $700/month). Sometimes you just can't have it all. If they can't make the house payment on their income, something has to give, and that something is giving up the house. A bummer, but true. But on the plus side, they should be able to get something they afford (probably have to rent until credit rebounds) with all the empty houses in FL.

[Floridagail]

Thanks for input everyone.