Payment plan different than what attorney quoted

[cspa522]

Thanks to everyone for all their help and advice. Truly, truly appreciated. Wondering how often it happens (I'm guessing a LOT) that the attorney gives you one quoted payment plan, but it changes when the trustee/judge get ahold of it?

We are planning to file in November. Still working out if that will be at the beginning, middle, or end, but it's set at November. Just got a new (used) car last weekend. $14,000 and per my attorney it can be put into the plan when we file. We'll have made one payment on it at that point, but it can't be avoided, and per Missouri law, it's all kosher.

Going to get an appraisal on the house about a week before we file, hoping to strip the 2nd mortgage. Fingers crossed. That will help us so much, words can't even describe. It means we might actually get to move when the C13 is done!

Then just saving up the attorney's fee for...FILING!! Right now our proposed plan doesn't include the new car or the 2nd mortgage, so it's at $550. I'm guessing it goes up to at least $1000 when the car is put in there, and if the 2nd mortgage goes in too.

Any advice out there for me? Anything I'm missing?


Thanks!!

[Pandora]

Is there any benefit in putting your new car into the plan? Usually thats only done if you're behind or if you can cram it down. If you can - try to keep it out of the plan as you'll just pay extra money to the trustee to distribute the payment. Your payment probably wont be decreased from what it is currently if thats what you're hoping for - interest rate possibly, but even thats questionable since you just purchased it. How long did you finance the vehicle for? If your plan ends up being 60 months yet your car payments are for 36 or so - then when your car is paid off, that extra $ may end up going to creditors in your plan as it will be "extra" DMI.

If you're going for the strip - that should not be included in your payback to the trustee. The only way that applies is if you cannot strip it - then it goes into your plan. However there are instances where you have to pay the 2nd regardless - JUSTBROKE (member on here) hit on this point in a post - if you search for it, you'll find it. I cant recall why its required or what its called, but he knows.

Be prepared for the payment that your lawyer quoted you may go up; our original quote was about $425-450. When all was said and done - our payback became $600 a month, quite the difference.

[cspa522]

According to our lawyer the new car has to go in the plan, that's how it works in our state/district. They will change the interest rate to at least 7.5%, which is way better than we were able to get. I talked to her about this before we decided to get the new car. My car was 9 years old with 128,000 miles on it, and wasn't going to last the five years we'll be in the plan. She advised it was best to get the car now rather than have to do it once we're in the plan. She also knew there had been changes to the law concerning putting new vehicles into a plan, and she looked it up for me specifically. According to her right now Missouri law says that we can put the new car in the plan after we've made one payment on it, they'll lower the interest rate to the state standard (7.5% right now) and we'll go from there. They'll also cram down on my husband's car, which is five years old and has a year to go on the payments. Apparently it's been brought before the courts that new cars shouldn't be included because people are buying them right before filing, then including them in their plans, but the courts overruled that for the time being, so right now it still stands, and we can include the car. The only reason we bought the car is because we knew my old one wouldn't last us, and we'd be hard pressed to get a loan while in C13. We followed our attorney's advice on that one.

From what I understand about stripping the 2nd mortgage - if we are eligible to strip it it goes into the plan. If we are not, we continue to pay it outside the plan as we have been.

Is it possible that the laws are just different where you are?

Mostly I was just wanting to get stories from people who have filed and their plan changed dramatically from what the attorney quoted vs. what the court approved.

Thanks!!

[momofthree]

Our plan payment didn't change from what was quoted to the amount that was confirmed. We didn't have any objections at all. That said, we are below median filers and our budget is pretty bare bones...

[despritfreya]

Your Plan is a proposal. The funding will vary on many factors such as the true payoff on the vehicle, the actual amount of taxes you owe, if you owe any, the actual amount of arrears on the 1st mortgage, the true value of any non-exempt assets and your Schedule I&J which is subject verification by the Trustee. In addition, a Trustee may pick up on a mathematical error. The Order Confirming the Plan makes the adjustments. Normally, if funding has to increase I raise the Plan payments beginning in the 25th month. That way my clients can plan ahead for the increase. Typically it is not a big deal.

You are correct. If there is simply not one penny of equity in the home after consideration of the 1st mortgage then your attny will file an adversary to strip the 2nd and reclassify it as an unsecured claim. If there is even one penny of equity then, under bk law, you have no authority to strip off the 2nd on your residence and must "cure and maintain" (cure the pre petition default while maintaining going forward payments) the mortgage.

Sounds like you have very competent counsel. Feel good about that and start breathing again.

Des.