More problems with my case! Schedule J didn't include a secured creditor!

[vicmost]

Currently I'm post 341 meeting that was continued do to a payment error. The meeting is scheduled to be continued and then confirmed 3/10/11. Since I already had the 341 meeting with Trustee and we worked out an agreement I do not have to show up to the next meeting, the lawyer will. In my district the plans are confirmed the same day.
I had many issues with my attorney and the 341 meeting that were covered in a previous post http://www.bkforum.com/showthread.ph...essons-learned..
I have a new issue.
I went to make a payment with Snap-on Tool Corp. today. They are a secured creditor that I absolutely need to keep since I'm a mechanic by trade. I can't work without my tools and tool box. They declined my payment and informed me that they will be filing a motion to collect their secured interest. Why? Because they are not listed on my plan! They are listed as a secured creditor but are not listed on my schedule J like my car payment is.
They told me that they would still file the motion even if I paid them because they are risk of the Trustee taking all the payments made to them since filing. They have to be listed in the plan (or approved outside of plan)...They've tried contacting my attorney but haven't received a response-I'm not surprised!
I've contacted my attorney via email and phone and he promises me he will look into soon and get back to me...From past experience (see above link) I have no confidence that he will address the issue in time. I don't even know that he can address the issue since we already had a tentative agreement with Trustee..
In fact my Trustee increased my payment because of a "phantom" child care expense listed by attorney ($351). I'm hoping that we can change this before confirmation. I fear that the Trustee will just throw the whole thing out because of the errors made....I also noted that they marked the incorrect boxes where it states are real estate taxes and insurance included....They are and they aren't listed elsewhere so I think I'm okay..
What are my best options at this point?. I'm trying my best to communicate with my attorney in a courteous professional manner..it's just not working. This is beyond frustrating. Am I over-reacting? Can this be fixed?

[chicagoannie]

You DO plan on showing up for the next meeting with the trustee (regardless of the fact that you don't have to) because I would not trust your attorney!

[vicmost]

Good suggestion!
Odds are that my attorney's attorney (aka as "Avatar") might be late - again...or heaven forbid..absent!

[despritfreya]

I have followed the posts from the other thread but decided not to respond. However, based upon this new issue, I feel compelled to respond.

Your continued hearing is 3/10. That is this coming Thursday. On Monday morning call the attorney and "demand" a meeting with him (not his paralegal) no later than Wed. morning. At that meeting you are to go over each and every page of your Petition, Schedules, Statement of Financial Affairs and Chapter 13 Plan. Assuming you have a copy of the documents that have been filed (you should have a copy), review everything this weekend so that you are familiar with the problems (currently known and/or what you subsequently find) before meeting with him. Any and all changes should be made before the 3/10 hearing.

From experience, mistakes are made. Sometimes the client catches them, sometimes the attorney does. Mistakes are expected and corrections are "par for the course". However, based upon your posts there are way too many mistakes. Your attorney needs to take charge of the file, not the support staff since the "buck stops with him" as it relates to a bar complaint and/or malpractice issue.

Just curious. . . is the firm a small operation or one that floods the market with advertising?

Best of luck.

Des.

[vicmost]

Thanks,
Sound advice. I pulled copies off pacer and started marking the errors that I can see. I will take care of things with the attorney Monday.
Despite his shortcomings all of this could have been avoided had I been a little more pro-active in following up with the paperwork. Had I pulled the case off pacer a month ago I wouldn't be in this mess. I incorrectly assumed that everything was in order.
The firm is small and appears to be extremely busy, I wouldn't know about the advertising all over the place. I chose them because they were very knowledgeable about lien strips.

[walkthaplank]

Sorry Vicmost... Hopefully he'll get all of this worked out. The good news is that Snap-on isn't in danger of having your payments to them seized by the trustee as they are secured debt. Hopefully it is just a quick amendment and they'll get it sorted. Good luck!

[catleg]

Stuff happens. Everything can be amended, if caught in time.
You should make sure Snap On files a secured claim before the cut off date, if necessary, file it on their behalf (I think you can do this).
This will not change the amount of your plan payment and Snap On will get all the money they are owed through the plan.
Now, whether the trustee will argue against the "secured" status of their claim, I do not know.
However, I tend to doubt it since they (as well as Snap On ) has probably dealt with this many times.
The trustee is there to get a maximum payout for unsecured creditors, but I think in most cases this is accomplished by getting the highest plan
payment, not knocking secured creditors down to unsecured.
It was a mistake not listing them as a creditor on your petition.

[vicmost]

Thanks catleg,
Snap-On is listed on the list of creditors and they are also listed as "Creditors Holding Secured Claims". They are just not listed on Schedule J. I'll find out more Monday.

[momofthree]

Thanks catleg,
Snap-On is listed on the list of creditors and they are also listed as "Creditors Holding Secured Claims". They are just not listed on Schedule J. I'll find out more Monday.

Are they being paid thru the plan? If they are, they wouldn't (and shouldn't) be listed on your schedule J.

[vicmost]

Are they being paid thru the plan? If they are, they wouldn't (and shouldn't) be listed on your schedule J.

From my limited understanding your statement doesn't seam correct. It reads "Schedule J-Current Expenditures of Individual Debtor". This seams to be a proposed budget showing my "plan" payment with all of my expenses and income averaged. My auto payment is paid outside of the plan but is still part of my budget. Where else should they be listed showing that I can afford to pay them?... ..The more I look at it the more legitimate expenses I see they didn't include..
I contacted Snap-On and had them email there intentions and there claim that they are not in the plan. I then contacted the attorney and he is going to make the amendment and put them on some schedule somewhere but doesn't want to try and modify my plan at this point since it is (in his words).."approved". He doesn't want to risk the Trustee throwing the plan out at this point and tells me that he can petition to have the plan changed after confirmation a couple of months down the road...It just doesn't sound right to me...Won't the Trustee see that the paperwork was amended prior to him approving the plan? What happens 2 months down the road when the Trustee finds all of these changes that were omitted before buy now added? I see they didn't include any of my life insurance policies that I've been paying for several years now (not included in my pay check)...The more I research the more errors I find....and they're costly errors!

I've got three days to sort this out. I've got an appoint with a different lawyer tomorrow who can perhaps tell me whats really going on and what will really happen down the road. ...I have the distinct feeling that I'm just being railroaded. ...

[vicmost]

Does anyone know what happens if my case is dismissed because of all these errors? My thoughts are to get this case dismissed and refile with a different lawyer. The only draw back I can see is that it might take a long time to do this. There's probably some rule where you can re-file within x amount of time since dismissal..I should be refunded my tax return from Trustee and that would give me enough to pay the next attorney.

[momofthree]

It's this comment that I'm responding to:

Snap-On is listed on the list of creditors and they are also listed as "Creditors Holding Secured Claims". They are just not listed on Schedule J. I'll find out more Monday.

It sounds like the creditor is listed somewhere, so it would seem like it must be accounted for somehow. Where are you seeing them listed? On Pacer as a claim? Or on your schedules?

From my limited understanding your statement doesn't seam correct. It reads "Schedule J-Current Expenditures of Individual Debtor". This seams to be a proposed budget showing my "plan" payment with all of my expenses and income averaged. My auto payment is paid outside of the plan but is still part of my budget. Where else should they be listed showing that I can afford to pay them?... ..The more I look at it the more legitimate expenses I see they didn't include..
I contacted Snap-On and had them email there intentions and there claim that they are not in the plan. I then contacted the attorney and he is going to make the amendment and put them on some schedule somewhere but doesn't want to try and modify my plan at this point since it is (in his words).."approved". He doesn't want to risk the Trustee throwing the plan out at this point and tells me that he can petition to have the plan changed after confirmation a couple of months down the road...It just doesn't sound right to me...Won't the Trustee see that the paperwork was amended prior to him approving the plan? What happens 2 months down the road when the Trustee finds all of these changes that were omitted before buy now added? I see they didn't include any of my life insurance policies that I've been paying for several years now (not included in my pay check)...The more I research the more errors I find....and they're costly errors!

I've got three days to sort this out. I've got an appoint with a different lawyer tomorrow who can perhaps tell me whats really going on and what will really happen down the road. ...I have the distinct feeling that I'm just being railroaded. ...

My statement actually is correct. ;) Though it may or may not apply to you since we don't know if Snap-on tools is being paid thru the plan or not. Secured creditors being paid by the plan (rather than directly by you) should not be listed on your schedule J. Your plan payment is based on your DMI, which is figured by subtracting Schedule J from Schedule I. If a creditor who is being paid thru the plan is also listed on your schedule J then it will have been counted twice and will throw off the entire calculation.

The response from your attorney about not wanting to rock the boat is throwing up a huge red flag though as it does make it sound as though Snap-on isn't being paid at all. But then, where are they listed as a secured creditor? And how did the trustee not catch the omission?

I hope your appointment with the different attorney can shed some light on the situation for you. Keep us posted!

[vicmost]

Mom-of-three,
Snap-on tells me that they they are not listed as being paid in the plan or outside of the plan. They can see they are on the list of creditors and they are even listed as a secured creditor but there is no mention of payment to them anywhere. Since they are not listed as being paid they will have no choice but to secure there interest and file a motion of "whatever" to secure there interest. I don't know the legalities, that's why I hired a lawyer.
Why wouldn't secured creditors be listed on my schedule J ? I have my mortgage and auto payment there....Doesn't the Trustee want to know that I am paying a creditor? Schedule I is just my income, don't see why a creditor would be listed there? The way I had things figured I actually had negative DMI and since I am below the median income that would allow me to do a 36 month plan at 0 payments per month. However, all of the districts are different and they won't confirm a plan unless it shows that I can at least pay $150 per month so the attorney...(paralegal) told me that he had to play around with my exemptions to get the numbers right so we can get the plan through. And that's were my problems start. The wrong exemptions / creditors left out and a child care expense that no longer exits put in....
Anyhow I'm rambling on now..time for bed and Tylenol Pm. I mean Tylenol PM and then bed, I'm starting to sound like my lawyer!


Thank you for comments and support.

[momofthree]

Mom-of-three,
Why wouldn't secured creditors be listed on my schedule J ? I have my mortgage and auto payment there....Doesn't the Trustee want to know that I am paying a creditor? Schedule I is just my income, don't see why a creditor would be listed there?

Maybe you're not understanding my terminology. If the payment is paid thru the plan, the trustee himself is paying the creditor. He'll know that that creditor is being paid. ;) Since YOU are paying your mortgage directly and your car payment directly, it needs to be listed on the schedule J. I was simply questioning whether maybe Snap-On had been included as part of your plan payment that the trustee makes. IF that were the case (sounds like it is not the case), then it would need to be omitted from the schedule J. We are paying our car payment (and nothing else) thru our plan, so it's not listed on our schedule J.

The way I had things figured I actually had negative DMI and since I am below the median income that would allow me to do a 36 month plan at 0 payments per month. However, all of the districts are different and they won't confirm a plan unless it shows that I can at least pay $150 per month so the attorney...(paralegal) told me that he had to play around with my exemptions to get the numbers right so we can get the plan through.

My district is the same way, though my attorney told me the payment had to be at least $200. Because of that, we simply opted to pay our car payment in the plan and nothing to the unsecureds. Did your attorney suggest that at all? Might save you some money since you have to make the car payment regardless. You mention your paralegal a lot. They are NOT supposed to be giving out legal advice. There's a reason for that...

Honestly, if I were in your shoes, I might just voluntarily dismiss the whole thing and re-file with a different attorney. I don't think there's a waiting period for re-filing when you voluntarily dismiss.

[vicmost]

I met spoke with two different attorneys about the issue and got some different ideas. I demanded a meeting with my attorney and finally got an appointment. The attorney went into a lot of unnecessary explaining about the process and the hidden agenda..blah...blah..blah.. M y points; I requested six times before 341 meeting via email and several times by phone to review paperwork. You didn't comply. The result was outdated or phantom expenses and a total lack of legitimate expenses (Snap-On, life insurance, Disability insurance, etc... Omitting Snap-On Tools knowing that I was a mechanic and obviously need tools to work was unacceptable. It was my fault for not involving myself in the paperwork aspect sooner...
Mistakes were made from both parties. It doesn't matter at this point. What matters is how is this going to be fixed. Who is going to pay for it and can we salvage it. Otherwise I'm gonna request dismissal. They tell me they can amend the plan after two months of payments and can satisfy Snap-On's concerns of having the plan amended showing them as a secured paid creditor before confirmation. All future legal costs will not be charged to me (they bill my plan via Trustee). I went along with this because I would know rather quickly if Snap-On was handled. If they are unable to get plan amended as they promised I can get the plan dismissed at that point (if it makes financial sense).
The result today.
Snap-On was contacted by attorney-they are to receive a copy of the amended plan within a few days
Plan was confirmed at $205 for first month and $450 a month for the remaining 47 months.

This is an increase from the original proposed plan of $205 for 36 months.

Happy? Not really...I'll have to just wait and see.

The good of this--perhaps I will help others not to make the same mistakes I did!