Converted Chap 7 to 13

[gwar11d2]

So I was riding the line between a 7 and 13 and the attorney, BK judge, etc put me into a 13. Looks like the 13 was granted today, but there is some weird stuff on the docket.

#1 Gone from No asset to Asset (I assume that is ok, but...)
#2 NOTICE that, pursuant to Standing Order of this Court, the Debtor, within four (4) days after receipt of this notice shall contact the Trustee's
Office, at...for an interview appointment. Pursuant to 11 U.S.C. Section 1326 the Debtor shall commence making the payments
proposed by the plan within 30 days after the plan is filed; and take further...

(Not sure what the above means)

Then the letter goes on to tell me about the 341 meeting.

My lawyer will probably ease my nerves, but he is usually hard to get in touch with so I figured I would ask the friendly people here!

Oh and I have to change my signature now...

[SMinGA]

Normally in a 13 - you make your first payment to the trustee within 30 days of filing. Sounds like this is what part of your notice is about. Your attorney should go over your plan with you - regarding what is to be paid into the 13.

[gwar11d2]

Hopefully they don't want it in 4 days My 341 was scheduled for 4-16 so hopefully we can get this moving pretty quick. Originally I filed the Chap 7 back in October so I'm looking forward to starting payments!

[potsie834]

I filed Chapter 7 and I have my 341 in about 2 weeks. I'm pretty confident that we will survive the 341 and remain in a 7, but anything is possible. If you don't mind me asking, why were you forced into a 13....is it because of too many assets? Over your state medium? or too much disposable income? My main concern is the trustee questioning my expenses and forcing me into a CH.13 claiming I have too much disposable income....

[gwar11d2]

My Schedule J (future expenses) due to my 401K contributions, etc... We had no assets to speak of, but they thought that we made too much money and our 401K contributions should be going towards creditors... We had a long history of contributions, but unfortunately they didn't care. The funny thing is that 401K is perfectly allowable in a Chap 13, so it's almost like we're getting an extended Chap 7. Only thing we are paying back is the car and the attorney fees for the next 5 years Luckily it is a new vehicle!

[potsie834]

I see. well thanks for answering my question, and it all works out for you.

[forgotten]

401K contributions should be going towards creditors... We had a long history of contributions, but unfortunately they didn't care. The funny thing is that 401K is perfectly allowable in a Chap 13, so it's almost like we're getting an extended Chap 7.

You need to insist your attorney hold ground on the 401k thing and take it to the judge if needed. You are allowed a 401k contribution.

[SMinGA]

I think I understand what you're saying Potsie... Your plan payment will consist of paying your car, balance on what you owe to attorney (since the 13 fee is higher than what you paid the atty to file 7), and of course the trustee gets a little %. The apr your car loan gets in the 13 may be less than what your contract was at, that happened for us... And your 401k deductions continue. So you won't be paying much more by paying the 13 (than paying the car on your own) ?

If they were able to get you into a 13 this way I guess it benefits the trustee as he/she not gets a % of your payment. And if your income goes up then your plan payment might get readjusted for you to ultimately pay more.

From the wording in your first post - it sounds like the first plan payment is due within 30 days of filing your plan. You should be able to stop making car payments directly to the lender now - and use that money to make plan payments.

[gwar11d2]

I think I understand what you're saying Potsie... Your plan payment will consist of paying your car, balance on what you owe to attorney (since the 13 fee is higher than what you paid the atty to file 7), and of course the trustee gets a little %. The apr your car loan gets in the 13 may be less than what your contract was at, that happened for us... And your 401k deductions continue. So you won't be paying much more by paying the 13 (than paying the car on your own) ?

If they were able to get you into a 13 this way I guess it benefits the trustee as he/she not gets a % of your payment. And if your income goes up then your plan payment might get readjusted for you to ultimately pay more.

From the wording in your first post - it sounds like the first plan payment is due within 30 days of filing your plan. You should be able to stop making car payments directly to the lender now - and use that money to make plan payments.

Yes, My attorney advised me to stop making car payments because they will be included in the plan. The interesting thing is my plan payment is actually going to be lower than my car payment because I had made about 10 months worth of payments already.

My attorney was willing to fight it, but this BK judge I was informed just threw out a Chap 7 case similar to mine. The particular Judge supposedly heavily favors creditors....unfortunate but true.

[SMinGA]

The trustee perhaps figures you have no reason to fight it - on the basis you're not 'really' paying more this way. But if your income goes up, your plan payment may go up. And in the meantime the trustee gets a % of your payment...

[gwar11d2]

That is my thought...and with the economy, I'm lucky if I get any raise at all...
So maybe in some odd way the trustee is making things easier by having my car payment 'cheaper'.

The trustee perhaps figures you have no reason to fight it - on the basis you're not 'really' paying more this way. But if your income goes up, your plan payment may go up. And in the meantime the trustee gets a % of your payment...

[Faust]

How much are you putting into your 401K if I may ask.

[gwar11d2]

How much are you putting into your 401K if I may ask.

Approx 15% of my salary which is under the Federal max contribution (I think now that is $16,000/yr?)

[Faust]

Approx 15% of my salary which is under the Federal max contribution (I think now that is $16,000/yr?)

Thank you!

[pete42]

I noticed a lot of people stating that their monthly payment in a chap13 may go up if they receive pay increases from their employers. When I asked my attorney that question, he stated that once the plan is confirmed, your payment will stay the same amount for the entire 60mnths. Maybe it's different from district to district, Im in western PA.