Hi - new with a question re: claims filings

[justdeb]

Been lurking for a while, so Hi to all and thanks for the awesome information, much appreciated.

We had to file 13 earlier this month - 1st was modified via HAMP, stripping the 2nd - only 1 other loan, no cc debt, keeping the car (outside of 13 plan) as well as the house (1st is also outside of 13 plan).

My question is - what happens if a creditor does not file a claim, yet our plan is tenatively set already at the amount its at? Our 341 isnt until the end of April, however as you all know, the 1st Trustee payment is due way before 341, which we already paid last week for 1 April.

We are below the means test and qual. for a 7, however given we wanted to keep the house due to mod and the 2nd wouldnt work with us at all - we can strip it, so we will do so. Our assets determined our payback as we own our vehicles outright (paid them all off early last year) but husband lost his job unexpectedly, so now our payback is 100% based upon that according to the plan, but technically we're at about 34% of the debt to be paid back (make sense?). $36K in assets (as we're keeping all the vehicles *2007 F250, 2005 Civic Hybrid and our 2006 RV) and our plan so far, has been set at 5 years/$600.00 a month. Ouch...but we'll do it, we dont have a choice.

So lets say since the 2nd charged off (CU will not sell the debt) but they dont file a claim - will that reduce the amount we owe or have to pay every month? I know charge off is a technical term and doesnt release us from the responsibility of the debt, but if they dont file... ????? How would that work? As well as if others dont file?

Will be so glad when the 341 is behind us and this thing gets rolling. Come on 5 years!

Thank you for your time -much appreciated.

[k2k04]

I asked that same question to my attorney's office when all of my creditors didn't file a claim...to the tune of about $15,000. I was told that this would not lower my monthly payment. I would just pay off my plan before 5 years. It's good that I'll be paid off before 5 years, but it sucked to hear that my payments wouldn't go down. BTW, I'm at 100%...not sure if your plan was 100% or not, that may or may not make a difference.

ETA, I just re-read and saw that you were at 100%

[justdeb]

thanks for the response. Yeah...that does suck - but I'd be happy with a faster payoff as well.

So where does the money go then if no claims are filed?? Who gets it? LOL

[k2k04]

Where does the money go? I'm not sure I understand your question. My plan (like many) pays off my secured creditors first. If my secured creditor doesn't file a claim, then more money goes to pay off the other secured creditors until they are all paid in full. Once that's done, then the same thing happens to my unsecured. I watch my payments (online) each month to see the balances go down (totally invigorating).

[justdeb]

but everything I have IS unsecured at this point...

at least thats what it says on my Schedule J and all the paperwork - including the 2nd. Says 100% unsecured.

?? So.. if they dont file a claim - (which is unlikely, but lets play hypothetical for a moment ) and that is the majority of my BK payback, what happens to the $$?

Does that make sense? I dont know how else to word it LOL

[k2k04]

Say the TT designed your plan to pay $200 on creditor A, $300 on creditor B, and $400 on creditor C. If creditor A doesn't file a claim, creditor B and C will get what was going to go to creditor A. B would get $400 and C would get $500. Everything gets paid off earlier. Creditor A would get zip because they didn't file.

[justdeb]

so if Creditor A is 25K and creditor B is only 5 K... and creditor A doesnt file a claim (unlikely I know..but..lets say for giggles...they dont)... Creditor B will get a surplus of 20K when the org. debt was only 5K? The rest is lawyer and trustee fees (6K) - making up our 36K payback.

That doesnt sound right at all...

We only have 2 debts in our plan.

[k2k04]

If creditor A doesn't file, then you won't have 36K to pay back. You'll only pay back the amount that is claimed. Once that amount is paid, you're done.

[justdeb]

ok...thats what I wanted to know ;)

Good lord.. please let creditor A not file LOL!

but now I wonder.. if they dont file (again doubtful..) and they're the 2nd... can I still strip it at that point in time? Hmmm

[k2k04]

Good luck!

[LadyInTheRed]

but now I wonder.. if they dont file (again doubtful..) and they're the 2nd... can I still strip it at that point in time? Hmmm

Yes. Fortunately, it's not that easy for a creditor to avoid having a lien stripped.

Bankruptcy Code Section 506(d):

(d) To the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void, unless—
(1) such claim was disallowed only under section 502 (b)(5) or 502 (e) of this title; or
(2) such claim is not an allowed secured claim due only to the failure of any entity to file a proof of such claim under section 501 of this title.

[Universal]

It would be wonderful if all creditors wouldn't file.........
Discover and Greentree did not waste 1 second getting their claims filed. They hardly gave us time to get our petition filed. lol.

[lrprn]

?? So.. if they dont file a claim - (which is unlikely, but lets play hypothetical for a moment ) and that is the majority of my BK payback, what happens to the $$?

Folks are struggling to answer your question because what happens depends on two circumstances: (1) How many creditors actually do file claims; and (2) what the payback % to the unsecured creditors who do file claims ends up being.

(1) is quite variable between filers. All your creditors may file claims, a few may not file claims, or more than a few may not file claims. It's very individual.

You'll need to wait out the 90 days for regular creditors and 120 days for gov't creditors to file claims or not. Whoever doesn't file a claim gets paid $0 from your plan. The creditor loses the money you owe them (although their insurance may reimburse them for most or all of the loss).

(2) Depending on who files claims and who doesn't, you'll have a final payback % for your plan. If that payback % is *NOT* 100%, then your payment stays the same - your creditors just get more of their money back, that's all. Your plan will still go on for 60 months.

However, if your payback % is 100%, then your payment stays the same but your plan could be shortened.

Bottom line is that you stay in Ch 13 for your plan's designated number of months making payments for the confirmed amount or until all your unsecured creditors that filed claims are paid in full - whichever comes first.

[justdeb]

thank you all for the answers and information - very much appreciated!

Here's hoping our 341 goes smoothly and we get confirmed!