lack of feasibility?

[Ziggy]

We received a lack of feasibility notice for the trustee today. I didn't quite completely understand it, but the gist I get is that our payment is going to have to be higher. Is that right? We just got the letter today, but we filed our case with the court on Dec. 10 2009 and had our 341 meeting on Jan 4th. All payments to the trustee have been current and up to date so far (they come out of our checks).

Thanks!

[tigergem]

This means the Trustee thinks that your proposed plan is destined to fail. In order to confirm a plan, the court must find that the debtor will be able to make all payments under the plan and to comply with the plan. Red flags that a plan is not feasible: when the debtor’s budget on its face reveals insufficient disposable income to make plan payments; the budget is unrealistic and does not provide for basic needs (in other words, your living expenses exceed your income.)

[Ziggy]

Does that mean the payments will be lower then?

[optimistic1]

Did you file Pro Se, because you should fire your attorney if he submitted a plan that was destined to fail.

[becky20]

Does that mean the payments will be lower then?

If there is not enough money to at least pay the attorney fees (if any were rolled into the plan), the trustee payment, any secured payments (if your house or car payments are rolled into your payment), and if you have to pay a certain amount due to asset, then there is no way the payment can be lowered.

For example, we filed an amended plan and proposed an amount of $391 a month but the trustee came back and said we had to pay at least $520 a month in order to pay off everything that would have to be paid. We were able to absorb it in a few different areas, but if they feel your budget is already too tight, that could be why he says it's not a feasible plan.

[Ziggy]

Did you file Pro Se, because you should fire your attorney if he submitted a plan that was destined to fail.

No, we used an attorney. It was one that is well know for bankruptcy and gets lots of business (and good ratings). I will be very upset if it doesn't go through. We can't afford to get another attorney.

[tigergem]

You should be on the phone with your attorney asking why he filed a plan that is not feasible.

[Ziggy]

You should be on the phone with your attorney asking why he filed a plan that is not feasible.

I will be on Monday. We got it in the mail on Friday after they closed and they aren't open on weekends.

[HHM]

You should be on the phone with your attorney asking why he filed a plan that is not feasible.

Tiger & Optomtistic...back the truck up a bit

It is the trustees job to object; in fact, if the trustee doesn't object, that means the attorney left money on the table. We don't have anywhere near enough information to be recommending to the OP to throw the attorney under the bus. But yes, the OP should contact their attorney next week. A feasibility objection means that the payment is not high enough to cover the claims that must be paid.

There could be several reasons for the objection.

Ziggy, what in particular is the trustee objecting to in your plan?

[tigergem]

Tiger & Optomtistic...back the truck up a bit

It is the trustees job to object; in fact, if the trustee doesn't object, that means the attorney left money on the table. We don't have anywhere near enough information to be recommending to the OP to throw the attorney under the bus. But yes, the OP should contact their attorney next week. A feasibility objection means that the payment is not high enough to cover the claims that must be paid.

There could be several reasons for the objection.

Ziggy, what in particular is the trustee objecting to in your plan?

Oh I don't think the attorney needs to be fired or railed necessarily, I was just concerned that Ziggy was NOT asking the attorney. But getting the notice on a Friday after hours... that all makes perfect sense.

But I hope you are just a little bit wrong about no trustee objection meaning there is money on the table. Because the trustee didn't object to mine. I funded to the penny my crammed down secured widget at Till rate and my IRS debt and less than one percent to unsecured creditors. And I got a red feasibility flag on my calculation program when I tried to reduce my payment by $1.00 per month from what it is now. I was trying to avoid BOTH leaving money on the table AND trustee objections. I am guessing that worked?

[HHM]

Oh I don't think the attorney needs to be fired or railed necessarily, I was just concerned that Ziggy was NOT asking the attorney. But getting the notice on a Friday after hours... that all makes perfect sense.

But I hope you are just a little bit wrong about no trustee objection meaning there is money on the table. Because the trustee didn't object to mine. I funded to the penny my crammed down secured widget at Till rate and my IRS debt and less than one percent to unsecured creditors. And I got a red feasibility flag on my calculation program when I tried to reduce my payment by $1.00 per month from what it is now. I was trying to avoid BOTH leaving money on the table AND trustee objections. I am guessing that worked?

In that type of scenario, where you have debts that "must" be paid in the plan, the problems arise when the creditors file their proof of claims. So be sure to stay on top of that. In cases involving priority debts and arrears, a proof of claim higher than you expect will trigger the feasibility objection.

[tigergem]

[Depressed]

Ziggy, just curious as to why you had to go with a 13 instead of a 7?

[Ziggy]

Forgot to update the thread. My husband called the lawyer on Monday and they basically told him not to worry about it. They also told him not to worry about anything that we get, unless they contact us. I didn't like that answer at all, I think they should have given my husband an explanation. Of course, once they said not to worry about it, he didn't. I would have questioned them more to get a reasoning.

Depressed, We did a Chapter 13, because it's what the lawyer recommended. It was a lot less out of pocket and they told us that we would have had to keep our car payment current and pay all our owed taxes, which we couldn't afford. With the chapter 13, we get to keep the car and not worry about the taxes.

[SMinGA]

I wouldn't be happy with the 'don't worry about it' answer either.

My attorney seems to 'not worry' about anything til its closer to a court date. Like we received objections (freaked me out) right after the 341, and he didn't deal with them til just before the confirmation hearing. Which got reset because we're trying to find a way to get our 09 refund treated as an asset and not additional income during the commitment period.

Anyhow... Do you know approx. what is required to be paid thru your plan in terms of minimums? For us, we have mortgage arrears and a vehicle being paid in the plan. So those amounts, the amount to our attorney (who didn't require anything up front) and trustee fee make our bare minimum. We couldn't afford to do that in 36, so we're doing 60 even though we're below the median income guidelines. I don't know if that would be an option for you??? 2 more years of payments are hard to swallow, but my logic was its better to have a reasonable plan than try to cut back more than possible to do higher payments than we can afford.