Trustee files objection to modification - 4 days late

[13herewecome]

We have recently been confirmed (1-12) with our Chpt13. However one of the creditors - IRS - only made a claim for a fraction of what we anticipated in the plan. Apparently most of the debt was past the 3 year window and became unsecured. We are paying 0% to unsecured.

My lawyer filed a Request to Modify to reduce the monthly payment based on the lower claim. We received an amended Order to Pay Wages document from the court showing our new monthly payment. The date for creditors to object (none was expected since the Request was due to IRS claim and IRS would be only creditor with the ability to object) was was 3-15-12.

The date came and went with no objections. My layer filed an Affidavit of No Objection with the court. But then we get a letter in the mail from the Trustee dated 3-19-12 saying that he objected to the modification. His objection was based on the fact that we had been paying our original monthly payment for x months and therefor we were able to continue to make that same payment, regardless of the lower IRS claim.

I discussed with my lawyer and he had a couple of different ways to proceed and thinks he can work it out with the Trustee. Worst case, we have a hearing scheduled for early April.

I understand why the Trustee is objecting. I don't understand how he can legally make the objection 4 days past the deadline. Seems to me to be black and white: file,object,pay,appear,etc before the stated deadline or you are SOL. Does the Trustee get preferential treatment from the Court or are they viewed as just an extension of the creditors?

Curious to hear any thoughts. Thanks!

[catleg]

The trustee would prefer that you make payments to unsecureds since that's what he makes his commission off of!
Sounds like you will have to take it to the judge.

[13herewecome]

Thanks catleg.

I understand the trustee's logic and motivation, but I'm really questioning the legality of making his objection 4 days after the deadline. If I or my lawyer failed to meet a deadline, I don't think there would be any second chance from the court to make it right, would you agree? The trustee's objection shouldn't even be accepted or recognized by the court/judge and thus there is no need for a hearing on the matter.

What am I missing here? Why is this not black and white?

[SMinGA2]

I don't know anything about procedural requirements - you said the date for creditors to object was 3-15. And no creditors objected. The trustee is not a creditor...

My understanding is your plan payment is your DMI. A change in claims doesn't change the amount you pay in. I'm surprised your attorney tried to lower your payment based on this reason. If your DMI is the same as when you filed (unless your expenses went up or income down?) what was your attorney's rationale?

Sounds like trustee is saying: rules of a ch. 13 is that all DMI is paid to the plan. You've been paying $X without problem - so it must be your DMI. Therefore, no change to payment. Unless you can document income/expense changes.

[TheBajan]

I don't know anything about procedural requirements - you said the date for creditors to object was 3-15. And no creditors objected. The trustee is not a creditor...

My understanding is your plan payment is your DMI. A change in claims doesn't change the amount you pay in. I'm surprised your attorney tried to lower your payment based on this reason. If your DMI is the same as when you filed (unless your expenses went up or income down?) what was your attorney's rationale?

Sounds like trustee is saying: rules of a ch. 13 is that all DMI is paid to the plan. You've been paying $X without problem - so it must be your DMI. Therefore, no change to payment. Unless you can document income/expense changes.

This is my understanding also. My attorney said that sometimes a plan amount can be lowered if we can show a change in income/circumstance that creates new financial hardship. On the other hand, if our DMI increases any time throughout the plan, the trustee can raise our payment. It sounds like his objection is not related to the IRS issue at all but rather due to your DMI.

[goon]

I have been told that, in my jurisdiction at least, the rules around dates don't really apply to the trustees, as they can claim they are overwhelmed and are able to get way with just about anything in the regard.

[keepsmiling]

Where the heck does the rest of the dmi go if there are no claims????

[keepsmiling]

I don't know anything about procedural requirements - you said the date for creditors to object was 3-15. And no creditors objected. The trustee is not a creditor...

My understanding is your plan payment is your DMI. A change in claims doesn't change the amount you pay in. I'm surprised your attorney tried to lower your payment based on this reason. If your DMI is the same as when you filed (unless your expenses went up or income down?) what was your attorney's rationale?

Sounds like trustee is saying: rules of a ch. 13 is that all DMI is paid to the plan. You've been paying $X without problem - so it must be your DMI. Therefore, no change to payment. Unless you can document income/expense changes.

so then... unsecured percentage just changes, correct?

[LadyInTheRed]

Where the heck does the rest of the dmi go if there are no claims????

The plan ends at the end of the 36 to 60 month committment period or after all allowed claims are paid in full, whichever comes first. Any funds left after paying all claims and trustee fees go back to the debtor.

[keepsmiling]

So tt gets percentage of all payments even if no claims are filed?

[TheBajan]

So tt gets percentage of all payments even if no claims are filed?

I'm a little confused. Are you saying that none of your creditors filed claims? Please elaborate.

[keepsmiling]

This isn't about me at all. It's about the OP. It is all a bit confusing

[TheBajan]

KeepSmiling,
I saw that after I posted! Sorry for further confusing the thread.

The Bajan

[keepsmiling]

I don't fully get what we are talking about here, but I am wondering about the very first sentence. Is "unsecured" the correct term? Isn't all IRS debt "unsecured"? Perhaps the term should be "discharged" or "forgiven" or some other word?
And OP said 0% was being paid to unsecured. So, I thought maybe the percent would change.

[TheBajan]

I don't fully get what we are talking about here, but I am wondering about the very first sentence. Is "unsecured" the correct term? Isn't all IRS debt "unsecured"? Perhaps the term should be "discharged" or "forgiven" or some other word?
And OP said 0% was being paid to unsecured. So, I thought maybe the percent would change.

It is a bit confusing. The OP didn't tell us how much unsecured debt he/she has but if anything less than 100% is being paid, then the entire DMI is used to pay creditors as much as possible. (Of course, the trustee gets a % and priority debt is paid before unsecured... etc.) It may or may not change the percent from zero but we can't know that without more info from the OP.