Discharge of Chapter 13 bankruptcy in one year??

[smkrishna]

I dont know where to start. I filed Ch.13 in February. 341 meeting was 27th June 2011. Confirmation was on 10th August 2011. Claims bar date was on 26th September 2011. I have started making payments from February 2011.

I had a huge HELOC from BofA ($130k) and they didn't claim??!?!?!?!?! But, they claimed for $315 (one missed payment last year for HELOC). Discover Card made a claim for $4,280 approx. That's all. None of other unsecured creditors (citi - $18k, Chase -$32k) and secured creditors made any claims.

I went through the whole BK forum and understood little bit about Claim Amount, Scheduled Amount, NDC, pacer, etc.etc... I went and talked to my attorney today and he told me that nobody can file claim now and even if they claim, their claim bar date is passed and so, there is nothing to worry. He said that he will receive e-mail if some creditor files a claim. I expected this.

But, he told me one more thing that made me really really happy.

As I have only $7000 approx. as the plan base amount and I have already paid $1500 into Plan, I have only $5500 remaining in my plan (% to unsecured or unsecured plan base is 0) and I expect to get $4000 as tax refund next year (Feb. 2012), attorney can help me in paying off the full plan amount and discharge me from chapter 13 as early as Feb./March 2012??????? by working with Trustee as he has done similar thing before.

I couldn't believe what he told me. If what he said is true, then I will be out of ch.13 (discharge of bankruptcy) by end of 1st year and don't have to go through 5 years fully???? Is it possible (or) has anybody gone through similar experience???

Thanks again for all your time, advice, ideas and feedback.

[justbroke]

It's up to the Trustee if they'll let you get out without paying 100% of the allowed unsecured claims. It's not 100% of the plan base since the plan base is just what's expected to be paid, based on a debtor's disposable monthly income (DMI) projection.

If you actually get out of your plan, having paid 0% to unsecured creditors, before the 60 months is over... please let us know! It will be one of, if not the, first post-BAPCPA (2005) confirmed plans that we would have on record as having happened. In the "old" days, pre BAPCPA, they'd let you buy out early if you had been in for at least 36 months of the 60 month plan. Now, there are people who refinance or otherwise come into a windfall that are able to payoff their Plan early, but I haven't read of a single case where this was allowed for less than 100% of the allowed unsecured claims. I think there was one person on here last year that was trying to do something similar, but I don't recall what happened with that.

I would also think that the unsecured creditors would object. However, this is all my opinion on this topic.

[newbie2]

It's up to the Trustee if they'll let you get out without paying 100% of the allowed unsecured claims. It's not 100% of the plan base since the plan base is just what's expected to be paid, based on a debtor's disposable monthly income (DMI) projection.

If you actually get out of your plan, having paid 0% to unsecured creditors, before the 60 months is over... please let us know! It will be one of, if not the, first post-BAPCPA (2005) confirmed plans that we would have on record as having happened. In the "old" days, pre BAPCPA, they'd let you buy out early if you had been in for at least 36 months of the 60 month plan. Now, there are people who refinance or otherwise come into a windfall that are able to payoff their Plan early, but I haven't read of a single case where this was allowed for less than 100% of the allowed unsecured claims. I think there was one person on here last year that was trying to do something similar, but I don't recall what happened with that.

I would also think that the unsecured creditors would object. However, this is all my opinion on this topic.

Justbroke, I don't think the unsecured creditors can object if they didn't file a claim. The way I'm reading the OP is that only one unsecured creditor filed a claim, the rest didn't bother. My understanding is that once the OP pays 100% of the claims from the unsecured creditors, and any arrears on secured debt, then he is done. If that's the case, then the OP hit the jackpot :-)

[justbroke]

Justbroke, I don't think the unsecured creditors can object if they didn't file a claim. The way I'm reading the OP is that only one unsecured creditor filed a claim, the rest didn't bother. My understanding is that once the OP pays 100% of the claims from the unsecured creditors, and any arrears on secured debt, then he is done. If that's the case, then the OP hit the jackpot :-)

You're right that the ones that didn't file can't object, but I'm talking about the ones that did file! That's why I wrote "allowed unsecured claims", which means claims that are both "filed" and have not had an objection sustained. In a 0% plan, you still actually have unsecured creditors that have filed. In my case, my Plan ended up being 0% with over $330K in unsecured claims with about $270K of it "allowed".

Reading back, though, it looks like at least one unsecured creditor did file for $4,280. If the Plan Base is only the attorney and arrears on a first (or something else), then I think an additional $4,280 would be needed to payoff early. (This is what we both noticed, that there is at least one "allowed unsecured claim".)

I based my opinion on what the OP wrote:

• I had a huge HELOC from BofA ($130k) and they didn't claim -- secured creditors do not HAVE to make a claim. They keep their "security interest" regardless unless you move to void their security
• (% to unsecured or unsecured plan base is 0) -- means that no unsecured creditors are being paid
• Discover Card made a claim for $4,280 approx. -- they were the smart ones!
• None of other unsecured creditors (citi - $18k, Chase -$32k) and secured creditors made any claims. -- secured creditors do not HAVE to file a claim. Looks like Citi and Chase will lose on this one!

smkrishna, have you actually gone on PACER and looked at the Claim Summary?

[smkrishna]

Justbroke, there is no 'Claims summary' in pacer but in 'NationalDataCenter' website.

Moreover, status of my secured claims:
a) Bank Of America ($129k) - HELOC on my primary home - we already got the filed motion and the was granted in July 2011 for 2nd lien stripping.
b) Chase($226k) - for my 2nd home - I didn't want to retain that house and foreclosure proceedings are continuing for this.

When I went into National Data Center website, it says the following:
CREDITOR NAME CLAIM DESCRIPTION % OF CLAIM TO BE PAID CLAIM AMT. SCHEDULED AMT.
DISCOVER BANK UNSECURED GENERAL 0% $4,283.05 $4,283.00
BANK OF AMERICA UNSECURED GENERAL 0% $314.71 $0.00
BANK OF AMERICA DIRECT-PAY 100% $0.00 $129,017.00
CHASE BANK STAY-LIFTED 100% $0.00 $226,462.00

My payment details into plan:
Attorney fee in plan is $2,275.00. I have been paying $220 per month until Feb. 2012 (for the first year -> 220 x 12 = 2640) and then, it will be $90 per month (90 x 48 = 4320). Total is 2640 + 4320 = $6960.

[smkrishna]

I am waiting for anyone's reply...justbroke, newbie2 or any other moderator....can anyone help me by answering? I just want to make sure that I get opinion/view point from experienced bk people in this forum...

[justbroke]

Yes, there is a claim "summary" but I mistakenly mislabeled it. In PACER the link it labeled Claims Register. This is where the "actual" claims are kept. I do not trust 13DataCenter or 13Network to tell me what claims have been filed and when they've been entered into CM/ECF (PACER).

a) Bank Of America ($129k) - HELOC on my primary home - we already got the filed motion and the was granted in July 2011 for 2nd lien stripping.

This automatically becomes an "unsecured" claim when you have a lien strip granted. This would mean that your unsecured claims are (now) at least $129K.

b) Chase($226k) - for my 2nd home - I didn't want to retain that house and foreclosure proceedings are continuing for this.

In most cases, a secured debt for which the collateral has been surrendered in the bankruptcy, becomes an "unsecured claim" automatically. That would mean another unsecured claim. However, the claim is "disputed" because it has not been liquidated yet (because there is no foreclosure). Florida is a recourse State so there would be a deficiency that would become an unsecured claim. (Unless the lender doesn't foreclose before your case closed... although that's another situation that I don't want to get into.)

I would NEVER use National Data Center or 13 Network for the "true" status of claims. It is solely the Trustees system that they use to generate checks. I think nothing more of it than that!

[smkrishna]

Justbroke, I went into Claims Register in Pacer and found only 2 claims (1 from Discover Bank for $4283.05 and another 1 from BofA for $314.71) and total amount claimed is $4597.76.

As both BofA (HELOC) and Chase (2nd home creditor) have not made any claims and they became unsecured (as you said above), what will be my "Allowed Unsecured Claims"?

I am under the impression that "Allowed Unsecured Claims" is total amount of claims made by unsecured creditors. Please correct if I am wrong or clarify me on this. Thanks for all your help.

[justbroke]

First, excellent that the Claims Register shows nothing else!!! That means no late-filed claims either. You did write that you only found "two" claims, but did you mean that you only found "two unsecured claims"? That could make a difference as well.

Allowed unsecured claims are as follows;

• Unsecured Claims filed before the claims bar date and that have not had an objection sustained. (All claims filed before the claims bar date are prima facie evidence of a valid claim.) In your case you have 2 allowed unsecured claims.
• Any late filed unsecured claim where the creditor can show excusable neglect or that they were never notified! (There are some caveats to this, but mainly if there was "ANY" distribution to unsecured creditors, any unlisted or omitted unsecured creditor would not be discharged.)
• In Florida -- and much of the 11th Circuit (Alabama, Georgia and Florida) -- a lien strip changes an otherwise secured claim into an unsecured claim. Your attorney should have used the "lien strip" template which includes the following language

  Claim No. XXX filed by _____________ Mortgage Company shall be treated as an unsecured claim in the Chapter 13 Case.

  (emphasis is mine)

I hope that helps! If you have your Order Granting Lien Strip (or whatever your attorney filed it under), check the language! (It may be an Order on Debtor's Motion to Determine Secured Status and Avoid Lien.)

It is quite possible that you have the perfect storm and that your attorney is willing to argue. If the secured creditors never filed a claim at all, then you may have a winning Motion (to Modify Confirmed Plan) that would allow an early payoff (or completion). It appears BofA, your HELOC, may have messed up, but I don't think they need to amend their claim, since the Order granting your motion to strip the lien, probably states the value of their lien and... that it's now an allowed unsecured claim.

[smkrishna]

Justbroke, I am really happy to read your post because of the following reasons as I think I am in the side of wining motion (as you said above):

a) There are only 2 claims in claims register in Pacer and those 2 claims are unsecured claims. I dont see any secured claims in Claims Register.

b) I just cut and pasted from the document "Order Granting Motion to Value and Determine secured status of lien on real property held by BofA on real propery - homestead":

A. The value of the debtor’s real property (the “Real Property”) located at xxxxxxxxxxxx and more particularly described as ORDERED in the Southern District of Florida on July xx, 2011. ....... is $190,xxx.00 at the time of the filing of this case.
B. The total of all claims secured by liens on the Real Property senior to the lien of XXXXX Home Mortgage (the “Lender”) is $ 218,xxx.00.
C. The equity remaining in the Real Property after payment of all claims secured by liens senior to the lien of Lender is $ 0 and Lender has a secured interest
in the Real Property in such amount.
Consequently, it is ORDERED as follows:
1. The Motion is GRANTED.
2. Lender has an allowed secured claim in the amount of $ 0 .
3. [Include only if appropriate: Because Lender’s secured interest in the Real Property is $0, Lender’s mortgage recorded on x/x/xxxx at OR BOOK xxxxxx Page xxx of the official records of xxxxxxxx County, Florida shall be deemed void and shall be extinguished automatically, without further order of the Court, upon entry of the debtor’s discharge in this chapter 13 case. If this case is converted to a case under any other chapter or if the chapter 13 case is
dismissed, Lender’s mortgage will no longer be considered void and shall be restored as a lien on the Real Property.]
4. (Select only one): The following is selected
(emphasis is mine)
X Lender has not filed a proof of claim in this case. The trustee shall not
disburse any payments to Lender unless a proof of claim is timely filed.
In the event a proof of claim is timely filed, it shall be classified as a
secured claim in the amount stated in paragraph 2, above, and as a general
unsecured claim for any amount in excess of such secured claim,
regardless of the original classification in the proof of claim as filed.

[justbroke]

Looks good! I wonder what "timely filed" means? I'm hoping that means that it's filed by the claims bar date. If so, you may be amongst the luckiest people who have had the fewest unsecured creditors file claim! It's common for several claims to not be filed, but it is not too common to have almost NONE of them filed! I had at least two claims totaling over $20K that were not filed myself.

I love the language indicating that "Lender has not filed a proof of claim in this case". That's the clincher. I like your attorney!

[smkrishna]

WoW!!!! I feel like shouting and screaming in joy!!!! I get the same feeling now (after I heard from BK expert like Justbroke) as I had when I heard from attorney on Friday..... Thanks again Justbroke.... There are still couple of points that I would like to mention:
a) The amount $190k (primary home value in lien stripping) that you see above (the value that we claimed) is assessed value from tax records... I took a big risk in this as all the realtors and appraisers gave me the value $250k and the first loan on my primary home is $218k.....My attorney just gave me the confidence that we will give a try and see what happens...As there is no other option for me, I was forced to take this chance and it looks like it worked in favor of me...Thank God...
b) It's been a week since the claims bar date (26th September)...Is there any possibility that BofA comes back and says that we have not received the communication or we have specified the amount incorrectly or any other valid reason and trustee accepts that???
c) Justbroke, I went through atleast 10 to 15 bk attorneys last year and ended up with this attorney as we felt he is knowledgeable and smart.. He is based at ft.lauderdale... I can send you his information by PM if you are interested in knowing...
Thanks again Justbroke...May God Bless you and other experts here who are helping people in making decisions and sharing wealth of knowledge and experience that you guys have....

[justbroke]

b) It's been a week since the claims bar date (26th September)...Is there any possibility that BofA comes back and says that we have not received the communication or we have specified the amount incorrectly or any other valid reason and trustee accepts that???

Bank of America is a sophisticated creditor with all the access in the world (to your bankruptcy). That they fell asleep is not excusable neglect. Your attorney probably filed the Motion to Value and Determine Secured Status (Value Motion) with negative noticing. Bank of America didn't feel like fighting, which I find most HELOCs don't, so they never answered. Their fault and loss!

Let me add that once the order was entered, BofA can't "come back" and cry foul! They were notified and chose to do nothing. The value of your property is now res judicata -- already adjudicated. They can't go back and say, "well, we don't think it was worth the value specified in the Motion and Order granting the Motion". The time for them to do that... was when the Motion was filed and before the Order was granted. (Or, in limited cases, after the Order is entered and before 14 days after the Order was entered to ask for "Reconsideration" or to "Vacate" the Order.) The Order became "final" after the 14 days. I mean, if there's a question of law, they could certainly appeal the Order, but their chance to appeal is gone too!

c) Justbroke, I went through atleast 10 to 15 bk attorneys last year and ended up with this attorney as we felt he is knowledgeable and smart.. He is based at ft.lauderdale... I can send you his information by PM if you are interested in knowing...

You did well. (I don't need the attorney's info. I'm just glad that your paperwork looks really great!)

[smkrishna]

OK. I got the point. Thanks again justbroke for everything. I really appreciate your help.

[IHateChase]

Here's a wish that it all goes as it sounds it should. I don't really understand it all but it sounds very exciting! better than winning the lottery!!!
Keep us posted.