Done Early-Does This Make Sense?

[Maximo]

We filed in October 2008 for a 5 year plan @ 100% payback. Calculating out we will be fully paid off in June of 2013....this includes 8% for the trustee. Does this make sense or am I possibly missing something?

[HHM]

Perhaps not all creditors filed claims.

[Pizza]

Perhaps not all creditors filed claims.

I didn't think it mattered if they filed claims or not... I thought you had to pay back every penny to everybody you owe.

[justbroke]

I didn't think it mattered if they filed claims or not... I thought you had to pay back every penny to everybody you owe.

This is not correct. In a Chapter 13, the creditor MUST file a claim and the claim MUST be "allowed". If they file no claim, they get no money and the debt is discharged. The only exception is for "secured" property that you keep, as well as "priority" tax debt.

Also, remember that in a Chapter 13, you may actually pay "less" than 100% of the allowed unsecured claims if your disposable income (DMI) doesn't support a 100% payoff.

[Pizza]

This is not correct. In a Chapter 13, the creditor MUST file a claim and the claim MUST be "allowed". If they file no claim, they get no money and the debt is discharged. The only exception is for "secured" property that you keep, as well as "priority" tax debt.

So it's possible that credit card companies won't file claims and get paid nothing? Interesting. What if most of them don't file anything?

Also, remember that in a Chapter 13, you may actually pay "less" than 100% of the allowed unsecured claims if your disposable income (DMI) doesn't support a 100% payoff.

Sorry, I typed it wrong. I meant 100% of your creditors.

[justbroke]

So it's possible that credit card companies won't file claims and get paid nothing? Interesting. What if most of them don't file anything?

It happens more often than you would imagine; it even happens with large sophisticated creditors. I had one BofA Signature VISA with $20K balance and BofA didn't file a claim in my Chapter 13 (the debt wasn't resold either).

It is even quite possible that no unsecured creditors file and you can actually buy our of your Chapter 13 and be done! I think this happened to one BKForum member within the last year. It was quite impressive that no unsecured creditor filed!

[Maximo]

Every creditor filed a claim...sorry for not being clear about it

[Pizza]

It happens more often than you would imagine; it even happens with large sophisticated creditors. I had one BofA Signature VISA with $20K balance and BofA didn't file a claim in my Chapter 13 (the debt wasn't resold either).

It is even quite possible that no unsecured creditors file and you can actually buy our of your Chapter 13 and be done! I think this happened to one BKForum member within the last year. It was quite impressive that no unsecured creditor filed!

Impressive indeed. Not extremely surprising either, considering so many creditors give up on collections and let the statue of limitations expire (especially around here).

[bam531]

This confused us also..as we are in 100% payback..and are getting done early. Our attorney explained to us the basic figures they used were not including tax refunds the trustee received. So in the 4 1/2 years we have been in this, our trustee has received over $5,000 of our tax refund. Which actually is equal to about 3 months worth of payments. This may be why you are getting done early.

[IM2Stressed]

I looked at my numbers this last week, and I too will be done early. I filed in Dec 2008 and should be done by June 2013. I am in 100% payback as well. It appears that all of my creditors filed claims.

[Maximo]

I guess that is a good thing then.....by the way the new system my Trustee uses out of state is still taking weeks to post deposits to 13 data center....it is 2 payments behind from my bi-weekley deduction.

[frogger]

considering so many creditors give up on collections and let the statue of limitations expire (especially around here).

There are basically two ways to play the collections game.

1. You don't worry about filing bk claims, don't worry about the stats, and don't hire the manpower that it takes to police the claims/stats.

2. You file everything, stay on top of the stats, have someone that takes care of this, and pay them to do it.

IMO, most of the time, they both work out about to the same % for the collector. It really just depends on the style of collections and how aggressive the collectors are for their clients.

All it takes to change the picture however, is a couple of good claims with a high % pay to the unsecured and it makes it all worthwhile.

Your mileage may vary....