Any objections? What happens next?

[BKinOH]

We had our creditor meeting yesterday and it went very well (way better than I expected). No difficult questions, no challenges to anything and no questions where we felt like our Trustee was opposed to anything we had filed.

(I've mentioned this before) Our atty is fairly certain that someone will object to our current rent amount. So we are prepared for that. And we discussed with the Trustee that we will have to make 2 changes to our plan.

My question is - what happens if there are objections? Are all objections considered valid? What if the Trustee is ok with the plan, but there are objections? Do we have to respond to each objection? What if we just don't agree with an objection?

Thanks!

[rrockinggramma]

well it would be the trustee who would object. A creditor can only object if he feels a cram down isn't fair etc. So yes the trustee could object and it would be noted on pacer if he does.

You compromise with the trustee. So your rent must be higher than allowed? Sounds like your attorney is aware and will tell you how to deal with that if the trustee objects. But basically your attorney and the trustee will meet somewhere in the middle.

[BKinOH]

Holy smokes....! We just got an objection...one... The trustee wants 100%. When I read it (yesterday), its like the didn't even have our creditor meeting on wednesday. It actually states things opposite from what we discussed at the creditor meeting...

Not sure what to do next....

[sharina]

Holy smokes....! We just got an objection...one... The trustee wants 100%. When I read it (yesterday), its like the didn't even have our creditor meeting on wednesday. It actually states things opposite from what we discussed at the creditor meeting...

Not sure what to do next....

What was your proposed percentage?

[BKinOH]

It was 43.5%.... The trustee listed out about 5 things that he felt were over stated or didn't have enough supporting documentation (or any). Which is why I'm really confused - because we supplied everything to our atty (sometimes twice or three times)....

[justbroke]

My question is - what happens if there are objections? Are all objections considered valid? What if the Trustee is ok with the plan, but there are objections? Do we have to respond to each objection? What if we just don't agree with an objection?

Any creditor in interest can object to your Plan (of Reorganization). This is usually due to their "treatment" within the Plan. Unsecured creditors can complain that your Plan doesn't pay enough to the unsecured creditors, but this usually will come from the Trustee. However, smart unsecured creditors (like eCast Settlement where they have purchased much of your unsecured debt) will be more apt to file objections because they have more to lose.

It was 43.5%.... The trustee listed out about 5 things that he felt were over stated or didn't have enough supporting documentation (or any). Which is why I'm really confused - because we supplied everything to our atty (sometimes twice or three times)....

Providing documentation, doesn't mean it accurately reflects what you claimed or is sufficient. If the documentation is relatively new and doesn't cover a good time period or the expense appears to be "new", the Trustee can and should question it. For example, you never claimed $3K a year in charitable contributions on prior tax returns, yet you are claiming so now. Even with canceled checks, it could still bring up a question on faith (pun intended).

The Trustee may think things are overstated, especially with respect to tax withholdings! If you are having $2K/month withheld, yet you get a $6K annual refund, then you are overwhitholding by $500/month and your actual tax liabilities are only $1.5K/month.

Remember, there are certain areas where the Trustee is very very adept at figuring out what the real expenses are. They not only check your tax returns and payroll statements, they are also checking your Schedule J versus your Schedule B22C.

The Trustee 100% Requirement May Not Be Coming From Expenses.

I add that because you may be keeping some property that is not exempt and the Trustee wants you to pay the value of that property back to the unsecured creditors. This becomes really obvious with investment properties, but sometimes equity in other property can cause this.

In the end, work with your lawyer to figure this out.

[BKinOH]

Thanks for the info! A lot of good stuff to think about. Now that the initial shock has worn off and have had a chance to catch my breath, I'll start putting everything (back) together for my atty... We'll see what happens from there.

[sharina]

Often, plans proposing to pay less than 70% are more scrutinized.

The bankruptcy law is 100% or all disposable income. MAYBE this means you could just spread the amount over the 60 months and not commit all disposable. This varies by district, but there was a recent case in Illinois where the debtor was able to do this. They finally got the trustee to see the light on 100% cases. Check with your attorney - he should know how they do 100% cases in your area. I do know my attorney did not understand it - the 100% confused him, actually.

Even though I am paying 100%, my plan was not done well by our attorney, so it would not be a good example 100% case. Thankfully, our income has increased some and the plan is now liveable and we have some extra money each month. And yes, it's still hard to write out that check every month.