Dismissed Chapter 13 What happens to the money the trustee is holding?

[kcfaninin]

We dismissed our Chapter 13 last week and plan to file for Chapter 7 in the fall. The trustee is currently holding $4100 to pay our creditors. What happens to that money? Will he make our next mortgage payment or will he give it to us to pay? Will our attorney get her full payment of $3500 even though we were only 20 months into our repayment plan? We retained a new attorney and he said our old one might send us a bill for her remaining fees, but stated we will include her in our Chapter 7. It doesn't seem fair she would get paid for something she didn't fully earn.

[rrockinggramma]

if your plan was confirmed, which is sounds like it was, after 20 months, then your trustee will pay the attorney (if not already paid, usually attorneys are the first paid) and then his fee for disbursements made and then the rest to your secured creditors. Unsecured creditors are last in line and probably will not see anything.

[Flamingo]

That's a shame after 20 months you had to dismiss your chapter 13. All funds will be distributed to creditors as described in your confirmed Plan. Your attorney is always paid first and then priority/secured creditors. The funds remaining that the Trustee has will be distributed accordingly. When you retain an attorney for a Chapter 13, you pay that attorney to represent you fur the full course of your Chapter 13. If you allow your Plan to be dismissed, that is the end of your Plan and the end of your attorney's representation unless you have some other agreement with that attorney, as in your instance, as to fees and filing a Chapter 7.

[kcfaninin]

We had to dismiss our plan because we couldn't keep up with the plan payments any longer due to decrease in income. Our first attorney refused to help us ammend our plan payments and stated we didn't qualify for a Chapter 7. So, we found an attorney that could help us and said we easily qualify for a Chapter 7.