Plan Amount Changed?!

[Foofy610]

Hi everyone,

We're 7 months into our plan. We received a message from our attorney that our plan amount & payment were going up due to the trustee fee.

I have a document showing a total amount of $63,101.40 payable at $1,051.69 monthly. The plan has been increased to $72,860.09. Bumping the monthly payment to $1,232.42 for the remaining 53 months.

The doc states that the unsecured debt AND TRUSTEE FEE would be paid from the original amount. Am I missing something? Can they do this?

[Flamingo]

A certain percentage is added to your Plan to pay the Trustee for his/her services. The percentage amount varies between districts. That should have been explained to you by your attorney prior to filing.

[Foofy610]

Our attorney specifically said that the most we would have to pay is the total amount of all claims divided by 60 months. Her fee & the trustee's fee would be taken from there. She never mentioned an add-on until last week. I guess we'll just have to bend over and take it.

[BNKRPTinNC]

It does strike me a bit odd that you have a plan base, which I assume would include trustee % and atty fee(mine did), and a scheduled payment to pay off the base. How can you arbitrarily change payment amount? I guess my question would be, if you are only making so much and then it has been determined that you can afford to pay this amount, how can you pay more once the plan has been confirmed by the court? Where does the extra money come from? My trustee's % has fluctuated up and down but my payment remained constant. I'm with you Foo, sounds a bit off to me too.

[HHM]

Has your chapter 13 plan been "confirmed"

Two possibilities.
1. Your plan is not confirmed, and the increase is the result of normal back and forth between your attorney and trustee and your attorney has not fully explained the change.
2. Your plan has been confirmed, the only explanation is that the trustee fee actually "increased" in your area. But even then, that would not result in an revised payment, it would result in less money going to unsecured creditors (unless there are no, or very few unsecured creditors being paid).

My money is on #1 and we don't have the full picture.

[Foofy610]

Has your chapter 13 plan been "confirmed"

Two possibilities.
1. Your plan is not confirmed, and the increase is the result of normal back and forth between your attorney and trustee and your attorney has not fully explained the change.
2. Your plan has been confirmed, the only explanation is that the trustee fee actually "increased" in your area. But even then, that would not result in an revised payment, it would result in less money going to unsecured creditors (unless there are no, or very few unsecured creditors being paid).

My money is on #1 and we don't have the full picture.

No confirmation yet. Constant rescheduling. Like I said previously, I have no choice but to accept whatever she tells me.

[HHM]

Okay, unless there was some defect in the plan your attorney submitted, I don't think the "trustee fee" is the issue. Although 7 months to get a plan confirmed is by no means uncommon, it is pushing it. It should only take that long if you have known issues in your case or are stripping a 2nd mortgage (and even then, if you file the 506 motion when you file the case, the lien strip shouldn't delay things too much). Given the amount of your plan payment, I suspect the trustee is pushing pretty hard on some expenses.

what else is going on in your case, what type of debts are you paying, are there any priority debts?

[kornellred]

The trustee's fee is not an "add-on" expense. It is deducted from the payment amount stipulated in the Chapter 13 Plan Confirmation document. Changes in the payment amount can only be accomplished by the trustee submitting a request for modification to the BK court.

[Foofy610]

Okay, unless there was some defect in the plan your attorney submitted, I don't think the "trustee fee" is the issue. Although 7 months to get a plan confirmed is by no means uncommon, it is pushing it. It should only take that long if you have known issues in your case or are stripping a 2nd mortgage (and even then, if you file the 506 motion when you file the case, the lien strip shouldn't delay things too much). Given the amount of your plan payment, I suspect the trustee is pushing pretty hard on some expenses.

what else is going on in your case, what type of debts are you paying, are there any priority debts?

The only debt included is credit cards. Our mortgage, HELOC & car payment are being paid outside of the BK.

[Pandora]

The only debt included is credit cards. Our mortgage, HELOC & car payment are being paid outside of the BK.

Since you're in a 100% payback to unsecured creditors (according to your previous posts) - and not confirmed as HHM states, it makes perfect sense that your plan would increase due to the Trustee's fee however that does cap out at 10%. Usually the first to get paid out of your payments is your attorney, then it goes from there to creditors with the trustee taking their percentage each month, at least, that's how ours has worked.

I'm more concerned at how you went from a -$800 DMI / looking at a Ch. 7 prior to filing - to having an excess of +$1000 per month to fund a Ch. 13. Obviously for that to happen your schedules had to show excess DMI, which can happen of course, but to the tune of $1K + seems very odd. Gather you're over median however that doesnt necessarily cement a Ch. 13 over a Ch. 7; it's all about the DMI at that point.

Are you certain you've claimed every expense allowable or per IRS standards? Since you're not confirmed yet, you can amend your schedules if need be; are you trying to strip your HELOC or are you not underwater from value to 1st? Does seem strange that you're not confirmed after 7 months especially since you're in a 100% payback to unsecured creditors and are paying all secureds outside of your plan.

Are you absolutely sure you're in a 100% payback as well or are you looking at 13Datacenter to obtain that information? If you do the math from your proposed plan currently, does it add up (60 mos x $1051.69 (dont forget the trustee's fee as well ) to what you owe your unsecured creditors / claims submitted thus far?

[DavidT11]

Perhaps the plan base increased (and, with that, so did the percentage paid to the Trustee) because proofs of claim were filed for amounts that exceed what your original plan accounted for.