Modifying a 13 to surrender house questions

[sthris]

Hi there,

Just wanted to say what a huge help the forum has been. I've been reading up here for a few months now and it's really nice to know there are other folks in my same shoes. If only I had found this before I filed, I think this whole thing would have gone much smoother for me. Anyway on to my question, hopefully someone can give me some insight on this modification I'm going through, my lawyer sure has been useless about the whole thing.

When my wife and I originally filed she had been performing some freelance work that has since dried up. Additionally right when we filed we had our 3rd child and I don't think we came up with a very realistic budget. So after dealing with over 6 months of no work for her we decided to go ahead and modify our plan to surrender our house. We are going to be 3 years since filing this February, our house is currently worth about 170-180k we owe 170k on the first mortgage and 60k on a second. The first is payed outside the plan by us and the 2nd is paid by the trustee. The was secured by equity at the time of filing, our lawyer had said he would be able to get it stripped using our personal exemption but that ended up getting denied, should have maybe known then that he's not such a great BK lawyer.

So we submitted our request to change the plan, did an updated budget and ended up with a plan payment about $600 a month lower than what we are currently at, this is even considering that the cost of the rental is lower than our mortgage. The plan payment change was objected to by the trustee because it would carry the plan length beyond 60 months. This appears to be due to the 2nd becoming unsecured and being paid out at the original dividend of about 40%. I did some quick math and it looks like the plan is good if we keep the current payment amount.

When I initially discussed this with our lawyer he felt that we could get that dividend changed due to us no longer holding on to the house, we have no other secured debt, it all becomes unsecured, the only property we will have kept would be one of our cars (we originally had a leased vehicle, the lease expired and we purchased a used car that is being paid outside the plan).

I've checked in with him recently and his most recent answer is that the trustee feels that the current proposed plan change will not meet all of the obligations of the plan. I've asked him the trustee will clue him in on the exact obligation amount and what it is for, and possibly getting a working dividend % from the trustee and his only answer is that the trustees use proprietary software that he does not have access to so he has no answer and all we can do is propose budgets and see if they object. This does not make much sense to me, is this really true?

Anyway I guess I have the following questions, not sure if folks will have any idea, I'm just trying to figure out if my lawyer really knows what he's talking about.

Can the dividend % change during and active 13?

When the trustee presents objections like this in court do the have to back up anything they say or can they just point to what comes out of their 'proprietary' software?

We're currently paying a student loan through the plan, payments made by the trustee. I've seen in multiple places that student loans should go into remission in a 13 but when I brought this up with my lawyer he knew nothing of this, mentioned that he thought I made too much money for that to happen and said I'd have to call them to check it out. Is he right about any of this? If he's not right where can I point him to do his research?

*sigh* I'm trying to figure out if I should fire him and go with someone else. I really don't want to, but he's never able to explain anything to us, is always horrible about returning e-mails and calls and I just get the suspicion he does not know enough to be able to help us out.

Just looking for some insight here, thanks for reading!

-S

[newbie2]

What a mess, I'm so sorry that this is happening to you. I'm having a hard time understanding why your plan cannot be changed (with a percentage change to unsecured creditors). This is what I would do: Call and make an appointment to sit down with your attorney face to face. Enough of the waiting on him for explanations. If you want to give up the house there should be a way to do it, whether it is modifying your plan or converting to a Chapter 7.

Also, when there are objections by a trustee you should receive a copy of it in the mail. Did you receive anything from the trustee? (I'm concerned that this has all been informally done for you between your attorney and the trustee without you being given the opportunity to have a judge make a final determination.)

If you are still not comfy with things after you have talked to your attorney then perhaps seek the advice of another and switch attorneys. That can be done. You have the right to representation that you are confident in.

[sthris]

Thanks for the suggestions, I may start looking for another attorney, I'm just concerned about being able to see one before I fire this one, and I'm not familiar with the process. I may start to try to interview some this week though...

I don't qualify for a CH7 just yet, I make a little too much, maybe if I get a pay cut I'll go that route but for now I'm stuck here.

The request for plan modification was filed, at the end of September (I check PACER and verify all this stuff now.) The trustee filed their objection October 22nd, they are only objecting to the plan payment amount change not the surrender of the house. I was in my Lawyers office on October 26th, we talked over things and he felt that we could go all the way down to a 0% dividend if needed, but had not been able to talk to the trustee yet. At that time he told me he'd be in touch as soon as he heard back from the trustee. I waited until November 15, then sent him an e-mail asking for an update, I recieved no response (par for the course). Around that time I recieved a notice that we had a court date for the plan modification on December 16th. I e-mailed him again today, and recieved his response that he has no way of knowing what the trustee wants because of their computer system. I've heard this from him before and I just don't buy it. I mean there are rules and laws or at least standard practices that the trustees use to figure this out, right?

So, yeah, if I find another lawyer I'm thinking I'd have to do it before the 16th, so I'm trying to figure out if anyone even has a clue about this plan dividend change stuff.

And the student loan thing too, because if that were to be taken out of what the trustee has to pay it should free up about $280 a month from the plan.