Amending plan AFTER 341 meeting but BEFORE confirmation

[jjwzk]

Hi everyone and thanks so much for everything!!! This forum has been invaluable as my husband and I have been researching (and then filing) Chapter 13.

We just hit our first road bump. We had our 341 meeting last Thursday (it went very smoothly), but then on Friday we were informed that the bank financing a car we bought in February was exercising its right (in the really fine print in the sales contract) to terminate the loan because it learned we filed for bk.

Fortunately, the dealership found another bank that makes "open 13" loans to finance the car for us. Also, our trustee agreed to make an exception and issue a "no position" letter despite the fact that our plan hasn't yet been confirmed .

Unfortunately, our interest rate will triple, which will increase our monthly car payment by around $100.

My two main questions are:

1. If we amend our plan now (to reflect the higher car payment) AFTER OUR 341 MEETING BUT PRIOR TO CONFIRMATION, will that start the clock over and require another 341 meeting?

2. Our trustee has already done us a huge favor by agreeing to make an exception and issue a no position letter even though our plan hasn't yet been confirmed. We're afraid that amending our plan to reflect the higher car payment and request a lower monthly trustee payment could be viewed negatively (i.e. greedy) and could put our plan in jeopardy.

I hope this makes sense. Any feedback/suggestions would be GREATLY APPRECIATED.

Thanks so much!!!
Morgan

[LadyInTheRed]

Hi, Morgan, welcome to BKforum.

I deleted your other post asking the same question in the "General Bankruptcy Talk" forum. Please do not post the same question twice. This is the correct forum for your question because it is specific to Chap 13. Be patient and somebody will come along eventually to answer your question.

You should not be afraid to amend your plan when you have a verifiable increase in an expense, as long as your plan is still feasible. Have you discussed this with your attorney?

[jjwzk]

Thanks, LadyintheRed. I haven't discussed these specific questions with my attorney yet. We were recently reassigned to a different attorney in the firm who isn't as responsive as our previous attorney. So I wanted to get some info here first.

If we amended our plan to reflect the higher car payment, I believe the plan would still be feasible. It would just shrink our monthly trustee payment from $250 to around $150, which seems awfully low.

Two more questions... if we changed our plan as discussed above but our original plan hasn't even been confirmed yet, is that still technically called an amendment? And would doing so require another 341 meeting?

Thanks so much!
Morgan

[LadyInTheRed]

Yes, it would be an amendment whether it is amended before or after confirmation. I don't know if another 341 would be required.

Please don't delay contacting your attorney. Leave a very specific message about what you are calling about so that your can prioritize your call appropriately. I suspect that modifying the plan before modification would be preferable, but that isn't based on anything other than a hunch. The sooner you talk to your attorney, the better.

[despritfreya]

We just hit our first road bump. We had our 341 meeting last Thursday (it went very smoothly), but then on Friday we were informed that the bank financing a car we bought in February was exercising its right (in the really fine print in the sales contract) to terminate the loan because it learned we filed for bk.

Hold on a minute. . . what road block, what right? You are in a Chapter 13. Your lender DOES NOT have the right to “terminate” a financing contract - no matter what the contract states. In fact every vehicle finance contract has that UNENFORCEABLE “default” provision.

If the vehicle was purchased within 910 days prior to filing your must pay the lender in full, typically through the Plan. Some jurisdictions allow direct payments but most are through the Plan. If you pay the vehicle through the Plan you can adjust the high interest rate down to something more reasonable. If you purchased the vehicle within the 910 window and your Plan does not provide for the full pay, you need to amend the Plan to so provide.

My guess is that your lender filed an objection to the Plan because your Plan does not properly provide for its claim. You need to discuss resolving the objection with an attorney as I assume you have filed pro se. Do this BEFORE you give up your rights.

Des.

[jjwzk]

Thanks so much for the info, Des. We bought the car in February with $1500 down and "no payment for 90 days," then we filed for bk in March. Our first car pmt is due next week on May 10th, but we're being told that the bank will not honor the loan because we didn't make any payments on the vehicle before we filed bk. Does that make any difference?

We actually do have any attorney, but I'm not sure he's giving this situation the attention it needs. I'll definitely be talking to him tomorrow. Actually, I think I'll copy and paste your post above and send it to him.

Morgan

[despritfreya]

If the dealership did not finalize your loan and allowed you to leave the lot with the vehicle, IMO, the dealership has bought the paper and is now your lender. I assume the vehicle is titled to you therefore it is property of the estate subject to the lien of the lender which must be provided for in the Plan. I did have this happen once. Dealership demanded the return of the vehicle or financing with a different lender. I said no. The judge agreed, overruling the objection and the Plan provided payment (in full) to the dealership based upon the contract my client signed.

Since you purchased the vehicle on the eve of filing, good faith would dictate that your Plan provide full payment of the purchase including the contract rate of interest. The dealership is trying to do a bait & switch forcing you to pay more than you contracted for and thus getting a bigger kick-back off the higher interest rate. That is bull - and feel free to print out this post and show it to your attny and the bad, bad dealership.

Des.