Potential plan/objection dilemma

[BKinOH]

Our attorney thinks we may get an objection to our proposed plan (based on a past bonus and/or the amount of our current rent). If an objection is made and our payment increases, my wife will have to pick up additional shifts and work more. Which means our 4 year old will have to go into preschool/daycare full-time. This would increase our allowable IRS deductions by about $625 per month. Which, in turn, could actually lower our disposable income.

Is this possible? We have consulted another atty to get a 2nd opinion and she believes that we would be able to do this (she is verifying and getting back to us). Why would a creditor or trustee do this?

[justbroke]

Is this possible? We have consulted another atty to get a 2nd opinion and she believes that we would be able to do this (she is verifying and getting back to us). Why would a creditor or trustee do this?

[BKinOH]

Family of 5 - allowance $1,080. We are currently paying $1,800 per month. (We actually thought we did a good thing before we filed by getting it down to that...we were paying about $4,200 in 1st and 2nd mortgage pymts.)

[justbroke]

Family of 5 - allowance $1,080. We are currently paying $1,800 per month.

Now I can clearly see the objection. Unless you can prove that the area that you live in has higher rents (the "local" standards are not representative) or you have some other reason to expend $700 over the standard... you'll have issue. Some Trustees are sticklers on this, and others don't really care (especially in a Chapter 13).

My original petition had me renting at $1,950/month when the local standard was about $1,200 for family of 4. The Trustee never said anything. However, before confirmation, I moved back into my homestead because I was able to strip the 2nd.

I hope your Trustee just lets it go.

[BKinOH]

So, what could the Trustee do? (Our atty told us he can't make us move). Make us "eat" the differnce? When I was looking for a rental house, the lowest I could find was about $1,600/mo.

[justbroke]

So, what could the Trustee do? (Our atty told us he can't make us move). Make us "eat" the differnce?

The Trustee can't make you move, but can make you literally eat the difference.

When I was looking for a rental house, the lowest I could find was about $1,600/mo.

Well, then that would be your argument. That the local standards published by the IRS are neither indicative nor reflective of actual rental costs in your area.

[BKinOH]

Hhmmm.... Ok.

Any recommendations? Should we just wait to see what happens? Are we able to resubmit an "updated" plan with the preschool and daycare costs included, so it does not appear as though it is in response to an objection?

[justbroke]

Any recommendations? Should we just wait to see what happens? Are we able to resubmit an "updated" plan with the preschool and daycare costs included, so it does not appear as though it is in response to an objection?

If your lawyer says to just wait and see... then do just that. If the Trustee isn't complaining, perhaps they know what the rents are like in that area, and you are not too much out of par.

I would follow the advice provided by your attorney. Don't start making drastic changes to your plan as though you're trying to pre-empt some Trustee objection. I assume you haven't been to your 341 Meeting yet? The Trustee usually makes his/her intentions known at the 341 Meeting. They'll make a statement like "we don't believe that you are committing all of your disposable income to the Plan".

So if the Trustee made no statements about your Plan, then you're probably okay.