Trustee trying to speed up plan after 2 years in can she do that?

[dlinid]

I am on a 100% payback plan for 60 mos, the trustee says we can pay more each month to make it pay off faster. How can I pay more than 100% you ask, well she says we can pay it off faster according to our income. Why dont we want to? Because we are comfortable with the payments as is. Can she speed up the plan that way? Our attorney says if we make enough, the trustee can force us to pay all our creditors faster than the 60 month plan. We dont want to pay it off faster, we are happy the way it is! What say you?

[newbie2]

I am on a 100% payback plan for 60 mos, the trustee says we can pay more each month to make it pay off faster. How can I pay more than 100% you ask, well she says we can pay it off faster according to our income. Why dont we want to? Because we are comfortable with the payments as is. Can she speed up the plan that way? Our attorney says if we make enough, the trustee can force us to pay all our creditors faster than the 60 month plan. We dont want to pay it off faster, we are happy the way it is! What say you?

Yep, they can do that. In fact, it is preferred to do it that way. In any plan if your income goes up or you have more you can pay to unsecured creditors the trustee can adjust the plan. The trustees want to get the plan done as quickly as possible in case anything should go wrong (IE a job loss, or something like that.) The more you can pay early in, the quicker it can be done if you are paying 100% to the unsecured creditors.

[IamOld]

Yep, they can do that. In fact, it is preferred to do it that way. In any plan if your income goes up or you have more you can pay to unsecured creditors the trustee can adjust the plan. The trustees want to get the plan done as quickly as possible in case anything should go wrong (IE a job loss, or something like that.) The more you can pay early in, the quicker it can be done if you are paying 100% to the unsecured creditors.

Wow - what do they consider "more" income? A few thousand per year more due to raise? As in a FEW - like one or two thousand more PER YEAR???

On the other hand..I guess if you can do it, you'd be rid of it faster...

[newbie2]

In a Chapter 13 one of the "nuts and bolts" is that all disposable income must be paid in to the plan. If you have an income increase and the trustee in your district thinks it is worth going after, they will. Each district is different in what they want. Most trustees don't mess with cost of living increase type raises, but always always ask your attorney how things work in your district.

[HHM]

If your income has increased since confirmation, the trustees have the legal right to audit you periodically and request an increase in the plan payment. It is rare that this happens. Reason being, if they move to increase the plan payment, then you submit a modified plan with increased expenses (Cost of living). The result depends on the specific circumstances.

On average, a trustee won't mess with a plan once it is confirmed, if they do, they are looking for 10% + increase in income before moving to modify the payment.

[IamOld]

In a Chapter 13 one of the "nuts and bolts" is that all disposable income must be paid in to the plan. If you have an income increase and the trustee in your district thinks it is worth going after, they will. Each district is different in what they want. Most trustees don't mess with cost of living increase type raises, but always always ask your attorney how things work in your district.

Thank you!!!!!!!!!!!!!!!!!!! - and I live in a VERY VERY high cost area...the funny thing is I'm below the median for my state but WAY!!! below the median for my metro area...Funny hmm...yes, IF I get a raise it'll be barely inflation...IF.

[olivies]

Well, in the case of more income would you be able to or have to submit more expenses (schedules)? An increase in income does not necessarily mean an increase in DMI, since you may have had your auto or health insurance double or have switched employers that now requires you attend training or classes at your cost, etc.

[dlinid]

My husband is in sales and had a nice one time sale last year, so we did see a jump. Will it happen again this year, who knows? We havent seen that kind of thing this year. My attorney at the jump said if we were in at 100% they would leave us alone, we could go to the Bahama's or buy a Hummer, they would not care. Now all of a sudden they care? We were instructed to pay our 100% and that was all. New schedules would not help, our teenage sons are both now over 18, and not much has changed in the 26 months other than a good year last year. Its sales, thats the game, feast or famine. I am not sure how we can go from 2125 to 4300, but that is the suggestion. I am redoing the schedules and have nothing good to report. I was living under a false premise that I just needed to make my 100% payment for 5 years and be done with it. I guess I should think about divesting our 401k's and IRA's to give her as much as I can to try to lower that monthly payment.

[olivies]

My husband is in sales and had a nice one time sale last year, so we did see a jump. Will it happen again this year, who knows? We havent seen that kind of thing this year. My attorney at the jump said if we were in at 100% they would leave us alone, we could go to the Bahama's or buy a Hummer, they would not care. Now all of a sudden they care? We were instructed to pay our 100% and that was all. New schedules would not help, our teenage sons are both now over 18, and not much has changed in the 26 months other than a good year last year. Its sales, thats the game, feast or famine. I am not sure how we can go from 2125 to 4300, but that is the suggestion. I am redoing the schedules and have nothing good to report. I was living under a false premise that I just needed to make my 100% payment for 5 years and be done with it. I guess I should think about divesting our 401k's and IRA's to give her as much as I can to try to lower that monthly payment.

That just seems wrong. :/ There's got to be court decisions where debtors in a 13 earn a commission salary.

[puggymoo]

sometimes you don't get a choice. Our plan is also a 100% and because of 2 loans being paid outside of the plan ours will end in 48 months. The tiered payments are 1140(13months), 1500 (13months) and 1800 for 12 months. We were told we had to shorten the term because we had extra money available. We are freeking out because I am losing $450 a month starting next month.

[dlinid]

Maybe some verbiage is in order, I thought it was 100% or all disposable income, not 100% AND all disposable income. Havent I met the language by paying 100% so far? Cant see my attorney for 3 weeks argggghhh.

[steveok]

Maybe the trustee is seeing that your children are now over 18 and you might not be supporting them at home and using that as a basis...not positive...just a thought...

[newbie2]

Maybe some verbiage is in order, I thought it was 100% or all disposable income, not 100% AND all disposable income. Havent I met the language by paying 100% so far? Cant see my attorney for 3 weeks argggghhh.

The 100% you are seeing is 100% of the total of unsecured claims being paid back in your plan. Also, if you have had that much extra income each month (from reviewing your past posts about having quite a bit of extra money each month) then you haven't been paying 100% of your disposable income to the plan. The wait to see your attorney will be hard, but make sure they fight for you based upon the fact that the income is variable because of commission.

[IamOld]

Maybe the trustee is seeing that your children are now over 18 and you might not be supporting them at home and using that as a basis...not positive...just a thought...

BUT - even if your child is over 18 as long as you can and do claim them on fed tax return as dependents (meaning you provide them with AT LEAST 50% support) does not that mean that they're part of your household??? Especially if they're FT students??

[dlinid]

We are going to court over this one, even if my lawyer does not want to, and he doesnt. We are going to apply Lanning based on my husbands income is part commision and is extremely variable. We are also going to argue that the commision has been put in our retirement accounts and that we are over 50 and need to begin saving. We drained our IRA's to stay afloat before our BK began, so we are trying to play catch up. If anyone has been succuessful with this arguement, please chime in!