Scheduled Amt vs. Claim Amt, 0% payback

[JenR]

I'm in a 0% payback, ch13, 36 mo. plan ($505/mo). The only thing being paid is the trustee, attorney fees and my car. The scheduled claim amount is $1300 MORE than the actual claim amount Toyota Financial filed. My question is what happens in this situation? Will the trustee just continue to pay Toyota until the end of our plan and then we get a refund of the difference? Or once Toyota's claim has been paid in full.... would the $1300 difference be spread out among the unsecured claims?

Just wondering. We're 3 months into our 36 mo. plan...... we've got a ways to go, but so far so good

[SMinGA]

It could be interest - cars are usually paid w/ a slight interest rate. IF there is more paid in beyond that, it goes to unsecured.

[justbroke]

I The scheduled claim amount is $1300 MORE than the actual claim amount Toyota Financial filed. My question is what happens in this situation?

The Chapter 13 Trustee will pay what is claimed, not what is schedule. You may need to adjust your plan in order to deal properly with the claim though. This is why Chapter 13 plans spell out, with specificity, how a secured creditor is going to be paid, including listing their claim amount (as of the petition date).

[BNKRPTinNC]

Is there such a thing as 0%?

A bit baffled as the OP having a 0% payback in a 13. Isn't the idea to pay unsecured some back otherwise you could go with a 7 and just reaffirm car payments and such? Initially, I thought that I was in 0% plan on my 13 but it took 13datacenter about 6+ months to finally post what my payback was to unsecured.

[justbroke]

I was in a technically 0% plan in my Chapter 13. Some Districts don't like this. However, I was paying arrears and crammed down one car and modified the interest rate on the other. The Trustee was making $600/month from me. I think they like when they are making money.

In the end, it's District specific as to whether a 0% plan will fly. However, something must be paid "inside" the plan and through the Trustee.

[busby]

On my claim summary at 13datacenter.com - all of my claims are listed as 100% under the "% of Claim To Be Paid" column -although I'm definitely not in a 100% payback plan.

I assume it will be adjusted at the end as I'm about half-way through a 60-month plan. My plan base on the case summary is correct so I just haven't worried about the 100%

I am correct in not worrying about this aren't I? Even the claims that weren't filed are listed at 100% with a $0 claim amount.

[momofthree]

I just had my ch. 13 341 meeting and the trustee approved our 0% payback to unsecured. We are stripping our 2nd lien, which is the purpose of our 13. We are paying our car payment thru the plan. She did hem and haw over it a bit, but felt that our particular "totality of circumstances" did not indicate bad faith, so she approved & confirmed the plan.

[JenR]

That's our scenario. We want to keep our house, are current on it, but ended up stripping the 2nd mortgage. So, in the end, the trustee approved our 0% payback to unsecured. All we're paying (through the plan) is our car payment, the trustee for making that payment and attorney fees.

We were ultimately tettering between a 7 and 13 (because we had a - very minimal - negative DMI), and decided on the 13 (for 36 months) because in the end we wanted to keep our house.

[LadyInTheRed]

A bit baffled as the OP having a 0% payback in a 13. Isn't the idea to pay unsecured some back otherwise you could go with a 7 and just reaffirm car payments and such? Initially, I thought that I was in 0% plan on my 13 but it took 13datacenter about 6+ months to finally post what my payback was to unsecured.

The idea is to pay all of your DMI during the length of the plan to the trustee for distribution to your creditors. If there's nothing left after paying secured creditors and administrative expenses, the unsecured creditors are out of luck. As has already been said, a plan giving 0% to creditors may not fly in all districts. But, I don't think the objections would be to the percent going to creditors. A trustee will find something else to object to like the amount of expenses or how income is calculated. He'd use those objections to negotiate a plan that would increase DMI and get something to unsecured creditors. (I don't have any personal experience about how a trustee would respond to a 0% plan. It's just a guess based on my BK research, an obscene number of hours reading these forums and knowledge of how the legal system works in general.)

One attorney I spoke with said that "a token" should go to unsecured creditors (she has 5 years experience, mostly with Chap 7). Another said that it all comes down to your DMI (he has 25 years experience and has done many Chap 13s). I think it was a difference between how willing each attorney is to stand up to the trustee. The more experienced attorney may have more confidence doing so.