What determines length of payment plan?

[Lisamlacy]

Just curious, what determines if someone pays over a 3 or 5 year plan? Is it the same amount of money paid in total for each and it just makes a lesser monthly payment for the debtor over a longer period of time for a 5 year plan?...or do you pay more over a 5 year plan?...curious as a creditor of someone filing chapter 13 in WA state.

[justbroke]

In 99% of the cases, it's as simple as this. You make over the median income, it's a minimum and maximum of 60 months (5 years). If you're under the median income, it's a minimum of 36 months (3 years). You can have a plan with fewer than the mandatory 60 months (for over the median) or 36 months (for under the median) if your plan pays 100% to unsecured creditors with allowed claims. Fancy speak for.... that ain't ever going to happen!

If you're an unsecured creditor -- which it reads as though you are -- you will receive a pro-rata share of the "disposable monthly income" of the Debtor over that "commitment" period. You may receive anything from 0% to 100% of your allowed claim. Make sure you file a claim on time, and follow all the rules!

[Lisamlacy]

He owns a sole proprietorship and uses one account for business and personal use and has no thorough records of what he makes. Of course he has picked a number that is under the median so he can pay for 3 years. How would we go about showing that he pockets WAY more. His bank statements show thousand in cash withdrawls monthly that are unnacounted for. It's just frustrating to know that he HAS the money and is trying to screw me through bankruptcy. (divorce settlement). He has stated in the 2004 exam that his girlfriend is employed and he pays her 750 per wk to do his books, yet she does not file taxes get a w2 or 1099 AND he has claimed her as a dependant on his schedules. Seems to me like he is getting his cake and eating it too. If only Judge Judy ruled the world...eh.

[justbroke]

Well, in a business sense, the only amount that counts as his "income" is his business income less applicable expenses. That means if he grosses $250K a year in his business but has $200K in expenses, then his annual income is $50K, for purposes of the means test in Bankruptcy.

If you have a Rule 2004 Examination, you should have deposed the debtor as to what the cash withdrawals are used for. Perhaps his business requires the use os large amounts of cash. The deposition should have covered it, and if it didn't, then perhaps you lost the opportunity. You could always file a complaint to Determine Dischargeability, but you're going to spend a lot of money on it (thousands), and you may not be able to recover your costs, and also be taxed with the debtor's costs.

Sometimes, you have to know when to fold them.

[kornellred]

If you believe the debtor's case is fraudulent, you can go right to the US Trustee's website and provide the case number and any information. You will not receive any acknowledgment of your submission and there is no guarantee that the US Trustee will act upon your information (from the actual disclaimer at the UST website).
Filing bankruptcy requires honesty. Unfortunately , the rules and laws of this complicated game do inadvertently allow some debtors to hedge their bets and get away with things that most cannot get away with.

[Lisamlacy]

Would this hinder the attempts of myself and my attorney to go after him for bad faith or complicate matters? Or...would it be an added chance to have someone else pick apart his filing?? Another thing that happened in the 2004 exam was that he was caught red handed lying on his taxes. He wrote off a $20,000 payment to me on my divorce settlement as a business expense and "purchase of the business name". He admitted that no where in the divorce decree does it state that was for the purchase of his company name and he never bought the name from me. I could go on for hours about the inconsistencies and lies...grrr. But just want to know any and all options to collect the maximum amount I am able to and keep him from getting away with this.

[justbroke]

Then you have a case. Why haven't you contacted the Office of the United States Trustee (OUST) in relations to the debt? I'm not sure you'll be able to collect on any money that was owed to you, but if you are able to convince the UST/OUST that fraud has occurred int he case, perhaps the UST can have the case dismissed with prejudice and an injunction from filing on the included (pre-petition) debt forever.

[Lisamlacy]

Nobody has ever told me this... I don't really know much about BK, just what I "google" online and I sort of just go with what my attorney says. Do you think there is a reason he has not mentioned this? Is it a HUGE red flag or a shot in the dark that the trustee would consider this fraud?

[justbroke]

Nobody has ever told me this... I don't really know much about BK, just what I "google" online and I sort of just go with what my attorney says. Do you think there is a reason he has not mentioned this? Is it a HUGE red flag or a shot in the dark that the trustee would consider this fraud?

Maybe your attorney is not a good Bankruptcy attorney. I don't know and I can't pass pre-judge the attorney. After your Rule 2004 Examination, your attorney should have, or should be filing, a Complaint as to the dischargeability. If lucky, maybe you can join with the UST/OUST to prosecute the complaint.

It will cost money though. Adversary Proceedings (complaints) are actual trials in the bankruptcy context. What did your attorney say after the 2004 exam? Did your attorney indicate that you should move forward with a complaint?

[Lisamlacy]

He said that there are a TON of inconsistencies etc. that may constitute a bad faith filing, but was hoping that the 2004 had produced a huge red flag. He thinks it will be hard to win on bad faith but possible since it goes on the totality (?) of the circumstances. He is filing a motion to object to confirmation...I'm pretty sure that is what he said. And he did mention that if we go through with this that there will be a trial. I do know the costs in advance and am aware that I could lose it all, but the amount my ex is trying to get out of paying is well worth the battle. My attorney still thinks there is a chance that the ex's attny will try and convince him to settle with me but we are moving forward with the objection to keep the fire lit I guess.

[justbroke]

Okay then, sounds like you and your attorney have a plan.