Chapter 13 Repayment Plan- do payments need to be monthly.

[Acropora99]

Hello,
I am working on filing chapter 13 pro se and am working on designing a repayment plan. I was discharged from a Chapter 7 just four years ago and my only bankruptcy option at this point is Chapter 13. My income is below the median income for my area. I have many medical bills and have fallen behind on my mortgage. I have been sued for some of my medical bills and do not want my home to foreclose.

I have a job with regular income; however, I also receive regular tax refunds of about 5 thousand dollars each year due to the child tax credit. No income taxes are withheld from my paycheck. I also have restricted stock that vests each year and, depending on the market rate, is worth 4-6k each November.

Because my income is below the means, I am able to propose my own budget. My income is not very high and I can easily propose an acceptable budget that requires 100% of my salary (monthly income). Would a trustee accept a repayment plan that proposed the restricted stocks and a portion of tax refunds each year as repayment? I can't find much information about this type of situation. I have seen some literature suggest that it may be possible. Any Opinions?

[HHM]

Yes, the payments need to be monthly.

First, why are you going pro se, There was a recent post here that claims that NATIONWIDE, only 6 pro se chapter 13's survived to be confirmed, the rest were dismissed at one point or another, so that should give you some flavor of what you are up against. If you have income, you CAN afford an attorney, do yourself a favor, go get one. You are running into the main problem with pro se chapter 13's, much of how specific things are handled is not published ANYWHERE except in case rulings that you may not have easy access, but the attorneys know this stuff.

Chapter 13's are NOT like doing chapter 7, the difference is this, chapter 7's are like building a bird house, chapter 13's are like building an actual house.

Do yourself a favor, get an attorney now, because you are going to get one 6-9 months from now after your case is dismissed, so might as well do the smart thing now.

[justbroke]

As someone who has filed a Chapter 13 and has reached and received confirmation of my Plan of Reorganization, let me say a few things. First, just looking at your NQSO (non-qualified stock options), large child-tax credit, and other income, you do not want to mess this up! Generally speaking, the child-tax credit would be property of the Estate. Only "earned income credit" seems to be exempt in most States (Ohio amongst those that have an actual exemption). (See below since Utah's Model Plan allows the first $1,000 of the combined return to be kept.)

Second, I agree with HHM. You actually have some complexities that warrant an attorney. Despite what you may be thinking, you don't get to propose your own plan of reorganization by just saying I'll turn over the NQSOs and some of the tax refund. In fact, the Utah Model Plan only allows you to keep $1,000 of your combined state/federal tax refund. (See In Re Skougard a Utah case where the court keeps both the child tax credit and the earned income credit in excess of $1,000.) If you are paying back less than 100% of the unsecured debt, then you must propose a (confirmable) plan that would commit all of your disposable monthly income (DMI) to the Trustee to be distributed to the unsecured creditors.

Without the benefit of running numbers, I don't know what your DMI would be, but it's probably more than you want it to be. In order to propose a plan, your Schedule I & Schedule J are going to be very important -- and scrutinized. Some Chapter 13 Trustees somewhat despise pro se Chapter 13 debtors and make it difficult for them to use certain expenses. You may have to "fight" (litigate) for your plan to be confirmed.

Why not just get an attorney to fight this battle for you? Trust me, if I had it to do again, I would gladly have paid $5,000 to do my Chapter 13.

You may just be lucky number seven but I would go back and really think about the Plan. At least Utah has a Model Plan but completing it correctly and insuring that your Schedule I & Schedule J support it, will be important!

(The nice thing is, that in the Utah Model Plan, you get to keep the first $1,000 of your combined State and Federal tax refunds. You may also want to look at In re Leigh, 2004 WL 3419121 (Bankr. D. Utah Apr. 27, 2004) upon which the Skougard decision, above, was fashioned.)

[Acropora99]

I just wanted to say YAY! My pro se Chapter 13 was successfully confirmed today!

I just wanted to add my comments regarding the PRO SE vs Attorney debate. I feel the attorney's are over paid for what they do. How you may feel about that will depend on you. I feel that filing chapter 13 was complicated but only because of the numerous details and the lack of information or lack of people willing to discuss the issues. Researching the issues was way frustrating because anytime I asked a question, I was told, " you should really get a lawyer" Ultimately, I read the law, I purchased the Nolo guide and I proceeded to file my papers and respond to trustee and creditor objections as the came in. At the end of the day, every objection seemed petty to me and they were easy to resolve. I feel that an attorney would have filed my case and likely received no objections simply because he new which T's to cross and I's to dot. At most, I think my bankruptcy was worth $500 - $750; however, every attorney I spoke to wanted $3400. Total Rip Off. Looking back on what I have gone through the last 5 months with my Pro Se Chapter 13, I would do it again. If an attorney was willing to do it for 5-7 hundred dollars, then I would probably pay him to do it. However, in many of the various hearings I went to, I heard numerous cases where the attorney seemed like a bumbling idiot.

The system seems rigged in the attorney's favor. Information is hard to find. Filing pro se is risky, and, unfortunately, more difficult than it should be. For example, my opening question on this thread regarding monthly plan payments. The answer is yes. Yet, the two responses I got were miles off topic, why? I don't know. Just another example of people supporting a system rigged to make easy money for attorney's. One advantage in my favor is I am able to read contracts and legal code and get a general understanding of what is being asked. I found I was then able to take that understanding and plead my case in front of the judge and trustee. In Utah, while they seemed annoyed, they also seemed willing to nudge me in the right direction. I had to appear in front of the judge on 3 occasions and will have to appear once more as I managed to negotiate a mortgage modification with my lender during the chapter 13 process. The judge will need to approve the final mod. At this point, as long as I stick to my plan, all should be well.

PS - Not sure about the numbers in above posts regarding pro se filers. I find it hard to believe that only 7 had been confirmed nationally. If that is true, add number 8; however, my judge and trustee did not seem shocked when they confirmed my plan. None of the lawyers in the room had any comment either. They were probably just pissed that I got away without handing over 3 grand to any of them.

[justbroke]

Unlike you, I don't think the system is rigged for attorneys at all. The problem is the "practice" of law, knowing and understanding the relevant caselaw for your District and Appellete Circuit, and all the rules (FRBP, FRCP, FREv.). Of course it's frustrating and everyone is telling you to get an attorney, because they can't provide legal advice! The Chapter 13 Trustee, even though they may be an admitted and practicing bankruptcy attorney, can't offer your "legal advice" either. it is not a defect of the system. It is actually the active "debtor" (client) protection systems that are in place to protect clients!

You asked about the plan payments and if they needed to be monthly. HHM responded with a resounding YES in the first sentence of the response. I was responding to HHMs response on general attitudes towards pro se filers in the system. I don't want to speak for HHM, but I'm sure HHM would say that a lot of the problems with pro se cases is arrogance and the thought that it's so easy... a caveman can do it. They then ask, why do I need to pay an attorney all that money when it should only be worth $500.

Well, the "average" BK attorney bills $150/hour, yet you are talking as if it only takes about 4-hours of work to assemble, file your petition, attend the 341 meeting, and attend 1-4 confirmation hearings while policing claims and dealing with Trustee objections. (The median is probably higher and closer to or about $200/hour.) The average Chapter 13 takes 20-hours of work. I would suspect that you yourself spent more than 100 hours working on your case. I say that you pay for experience. No different than you trying to repair the engine in your Prius where you never had any experience as a mechanic. Sure, you could figure it out, details may be sketchy, and those darned mechanics charge too much, but you could get it fixed. Or, you could really mess up and destroy an $8,000 engine. Oops.

If you read or have read my blog, you (would) know that Judges are required to construe your pleadings very liberally, but they are not required to make your case. In fact, you have an advantage as a pro se, where you don't formulate (articulate) your argument correctly or with cause and the Judge "walks" you to the answer.

I'm sure the attorneys in the room couldn't care less about you doing it pro se. They tend to recognize the really good cases where the pro se is actually making caselaw or helping create new procedures in their district. Otherwise, you're just another attorney to them; perhaps inexperienced, but just another attorney.

Unfortunately, I think that you just have a negative view of attorneys and that is fine. I went pro se as well and was confirmed. In my case, however, I didn't receive any help or "nudging" in the right direction. My Plan ended up being used as part of the Model Plan for my District. In your case, you had the benefit that those that came before you, attorneys, had created a Model Plan for your District. That is why I said, in my earlier post, that you were lucky that there is such a thing in your District. My District never had a model plan until about 1 year after I filed (7 months after my confirmation).

Despite your misgivings about the responses your received here, from senior members of the forum, I hope you don't continue to think this is some conspiracy to direct everyone to attorneys. In fact we have, including you, 3 active members who have confirmed a Chapter 13 Plan. That's out of 1,000,000 visitors to this site a year.

Finally, congratulations on achieving something that most pro se filers can never achieve. That's confirmation! Now, just stay in plan and keep your head low -- off the Trustee's radar -- and make it to discharge. Then we can celebrate one of very very few that ever had a pro se confirmed and discharged plan.

[LadyInTheRed]

Conratulations on getting your plan confirmed.

I think your criticism of the advice you got here is off base. You were asking a very specific question about what a trustee would accept in your particular case which nobody other than an experienced attorney in your district who reviewed your situation is qualified to answer. You had a choice to hire an attorney or do the research yourself. Not everybody has the ability to research the law and court rules and navigate the court system well enough to get a Chap 13 confirmed. It would be irresponsible to encourage a complete stranger to try.

Nobody is here to support "the system". We are here to support people who are going through the same things we have gone through or are still going through.

The value of what you accomplished is much greater than you apparently realize. How many hours did you spend on your case? With my training and experience in legal research and drafting and navigating the court system, I think I could have gotten my Chap 13 confirmed on my own. But, I already had a full time job and didn't need another temporary one. My $6300 in attorney fees to prepare a Chap 13 petition and motion to value lien and all the related work was money well spent. It allowed me to spend my time relaxing instead of researching, drafting, reviewing, double checking and stressing over whether I've done everything correctly, no matter how thorough I was. That relaxation and piece of mind are priceless.

[Acropora99]

Thank you for your congrats. I certainly am pleased that my plan was confirmed.

Perhaps I make an argument from ignorance with regards to my complaints about the legal system. I am very happy that the legal system does allow Pro Se filers and even makes a decent attempt to accommodate them.

I will concede my criticism of the advice I received was a bit off base. Ultimately, it was the advice that I got here that sent me on the right path. However, the strong advice to not go pro se really bothered me and still does.

I understand the comment that this forum exists to support those who are going through what we have gone through. I would have enjoyed more support to go pro se and would like to support those who make that decision. I disagree that it would be irresponsible to encourage a complete stranger to try pro se. I agree that not everybody has the ability to research the law and court rules and navigate the court system. Those who feel inclined to try pro se, really do need to evaluate their ability to do just that. Because these individuals are strangers to me, I cannot make that determination for them and feel it is unfair to tell them not to consider it.

I tend to be very much in favor of do it yourself projects. Take the Prius example above, Due to my difficult financial situation over the last 5 years or so, I absolutely would try to repair my own Prius (assuming I had one) I have learned a lot about car repair over these last few years performing several major vehicle repairs. However, I find it much easier to research car repair than the legal system. I must say, that once I figured out how to use the internet to research case law, that is what really helped me to successfully follow through with my bankruptcy case to confirmation. I think any individual, who understands the risks, and feels inclined to file pro se, should not be discouraged. The risks are real, in my case, I filed bankruptcy the day before the foreclosure sale of my home, If my case were dismissed, I risked losing a home that I very strongly did not want to lose. During the times when I just couldn't seem to find the answers I needed to satisfy the latest trustee or creditor objection, I did feel quite a bit of stress. I also must say, I enjoyed the process, that may be a secret of my success. An individual who hates everything about trying to navigate bankruptcy law absolutely should not try to do it Pro Se. It is not so easy a caveman could do it. There was also a hurry up and wait element to the process that could lull you to sleep or a false sense of security. A Pro Se bankruptcy case requires attention to detail and good organization. I had to amend my plan three times prior to confirmation and at one point, sent several variations of a plan to the attorney for one of my creditors asking him if he was happy yet, fortunately, he cooperated and worked with me and finally withdrew his objection. I was frustrated with that process and felt that the wording he finally agreed to was weird and really had the same intent as my original wording.

Above I think I describe some of the reasons for my success and ability to navigate the system. It can be done. I felt confident I could do it from the beginning. That confidence did waver a few times and I was prepared to run to an attorney if I felt failure was imminent. I did not track how many hours it took me. However, I would estimate around 40-50. There were 2 or 3 moments where, I very nearly looked up a lawyer. In the early stages, filling out paperwork and the initial plan, I relied heavily on the Nolo Guide and had 0 objection to my budget or any other forms. All my complications (objections) came from my Chapter 13 Plan. I was able to resolve those issues by studying and researching available case law and reaching out to the objecting party and simply asking them what they specifically object to and what they would like to see. I just want to reiterate, it took a lot of effort and determination and was not an easy thing to accomplish.

[TheBajan]

First let me say congrats on your confirmation. I say it sincerely but you may not think so with my additional comments.
I'm something of a do-it-yourselfer. Like you, I prefer to learn how to do something and handle the task myself rather than hire someone and have to fix their mistakes. This has been the case throughout my life. When I was 9 I started drafting houses and eventually drafted the plans for and built our own 3500 sq ft home. When I was a single mom and my car broke down, I checked out the manual from the library and learned how to fix it. When my husband and I got into real estate and became landlords, I learned about case law and handled all the legal paperwork. I drew up our own documents to sell a house on land contract and then I represented us when we had to foreclose on that house. I understand the idea of wanting to save money and having the confidence to learn a subject and tackle it yourself so I get where your coming from. I even understand enjoying the challenge.

However, your criticism is ignorant, arrogant, and unwarranted. It's simply a brag session. This site is about offering encouragement and honest HELP to people who are struggling both emotionally and financially. In some cases, we are dealing with people who are at the lowest point in their lives. You, yourself, came to this forum for help posing a very simple, basic question. So basic that reading it left me wanting to scream at you to get a lawyer. HHM did answer your question directly. It wasn't obscure or vauge... it was just as you asked it. The fact that he went on to make another suggestion to you didn't take away from that. As a do-it-yourself kind of person, I still would never consider performing brain surgery (or any surgery) on myself or another human being. It's simply folly to do so. The risks far out-way the rewards. To encourage someone else to file pro se would be the equivalent to that in my opinion. Hurrah for you.... you did it... but that doesn't mean it's the right thing for everyone. I can replace a roof but I wouldn't suggest that my son try to. We pay professionals for their knowledge and expertise. Of course we can do the same thing cheaper (our time is free) but we get what we pay for and in some cases, that's not a good thing. This site is about helping people through encouragement and telling them what's right for them. It's not about you. It's not about bragging that you beat the lawyers. My sister-in-law is an attorney. She helped my brother-in-law file pro se about 15 years ago. I could have gone to her and gotten help to file pro se. I didn't. In fact, I didn't even tell her we were filing and the reason was because I didn't want her help. I wanted an attorney who specialized in BK. I wanted an attorney who really was "in" with the BK system and the people (judges, trustee) that are a part of that system here in my area. My sister-in-law was not that person. I am not that person. It took a bit to find the right lawyer but we did and every dime of the $3500 he charged was worth it. The stress I've been through for the past 3 years before filing, and the stress leading up to filing, was more than I know how to express. That sort of stress level is life changing. For some people it's just too much. I want to encourage you to be more sensitive to your audience and think about the advice you "ignorantly" hand out. It should be in their best interest. Again, it's not about patting yourself on the back or making "in your face" statements to people who sincerely had your best interest at heart. It's about what's best for them and for the majority of people, filing pro se is not the right thing to do.

Congrats again on your accomplishment. Hopefully you won't be back in a few years trying to file again as you are doing now.

Best regards,
The Bajan

[LadyInTheRed]

I would have enjoyed more support to go pro se and would like to support those who make that decision....

During the times when I just couldn't seem to find the answers I needed to satisfy the latest trustee or creditor objection, I did feel quite a bit of stress.

If you hadn't made unfounded judgements about the advice you received here and instead came back during your case with questions or just to vent, you would have found a lot of support. Your experiences also would have helped others who make the decision to file pro se. We have a prose subforum for the specific purpose of supporting prose filers. We will always discourage people from filing prose, especially those planning a Chap 13. But, once somebody has made the decision to file pro se, we don't hesitate to provide the best help we can to get them through their BK.

[justbroke]

Acropora99, I would have helped you and certainly other pro se and generally knowledgeable users and visiting attorneys would have helped you navigate the procedural and legal maze. Until now, I didn't know that you needed any other help other than asking whether plan payments needed to be "monthly".

From one Chapter 13 pro se filer to another, we need all the help we can get. This is probably the best resource online for networking with others who have gone through the same thing. Albeit there are very very very few Chapter 13 pro se filers anywhere online, but at least you found the site.

[Acropora99]

I did find the site useful. After how strongly I perceived the opposition to filing Pro Se, I simply chose to lurk at that point. In reading many posts the tone really seemed more anti-pro se than I expected. I will certainly continue visiting this site since my case has simply been confirmed at this point, there certainly is potential that issues may arise in the future.

Just to respond to TheBajan, while there is some brag in my post, that is not its sole intent. According to uscourts.gov, 10% of all chapter 13's files are pro se. Those people need some support and clearly need a better understanding of what it takes to succeed pro se. I am not here to proclaim how easy it is, just that its possible. Every case is different. Some will be more difficult than others. I would admit that my case was likely easier than most. A pro se filer needs to be able to evaluate that. There is a learning curve as demonstrated by my basic question that made you want to scream. I was just beginning a process of evaluating a chapter 13. That was in October 2011, I did not actually file until I felt I knew enough to succeed. I filed 2 days prior to the foreclosure sale of my home in April 2012. I had spent 6 months, casually researching Chapter 13 at that point. I say all this not to brag, rather, to explain to others considering a Pro Se bankruptcy that success takes effort and research and they will need to be committed to studying the topic. I started out with no knowledge, and had some very stupid and basic questions. Once I had answers, I built on that knowledge. Making a last minute decision to file pro se and, having no time to commit to studying the topic or no desire to commit any time, would be a huge mistake.

[TheBajan]

Just to respond to TheBajan, while there is some brag in my post, that is not its sole intent. According to uscourts.gov, 10% of all chapter 13's files are pro se. Those people need some support and clearly need a better understanding of what it takes to succeed pro se. I had spent 6 months, casually researching Chapter 13 at that point. I say all this not to brag, rather, to explain to others considering a Pro Se bankruptcy that success takes effort and research and they will need to be committed to studying the topic. I started out with no knowledge, and had some very stupid and basic questions. Once I had answers, I built on that knowledge. Making a last minute decision to file pro se and, having no time to commit to studying the topic or no desire to commit any time, would be a huge mistake.

This is a far more humble and digestible response. If in fact you want to help other pro se filers, we have a sub forum just for that. Since you've been lurking, you probably have already been there. Give back a little of what's been given to you by lurking there and helping answer questions for those people that you think you can help. Be honest with them and with yourself... six month of research (even casual) will add up to more than 40 or 50 hours not even mentioning the time to actually do the leg work and paperwork. All of that is time and energy spent that many people don't have. Be very careful not to make it sound so much easier than it is. Remember that your your there to help and perhaps give SOME credit to the people who have anonymously helped you.

Best regards,
The Bajan

[justbroke]

Thanks for reminding (or informing) Acropora99 that we actually have a Pro Se area specifically for pro se debtors to ask questions and get as many answers as possible.