Discharge audit letter from trustee

[flowerchild]

So I open up my mail tonight and there is a letter from the trustee. It reads:

As of 5/25/12 a discharge audit has been completed on this case. The outlined checklist indicates items that are obstacles to the discharge process.

1.) The bar date for claims has expired. Based on the claims that have been filed, the dividend to unsecured creditors has been adjusted from 8% to 15%. This adjustment will allows debtor's case to meet the term requirements outlined in the plan without interruption. This percentage may be adjusted downward in the event of court orders for disbursements not anticipated at the time of this audit. In no event will any adjustments reduce by debtor's confirmed or modified plan.

2.) Plan expiration 8/28/12 but plan modification filed 5/21/12 is pending.

The item 2 is because I requested to keep a portion of my tax refund. I sent in the remaining monies already but 13datacenter hasn't posted it yet. So I think item 2 is okay. But what about that 8% to 15% hike? Do they want me to pay more money now? I have made all of my payments each month. I am on a 60 month plan that was filed in 03/07 but wasn't confirmed until 08/07 but I was making my payments during those 5 months. Lord I hope this isn't some hiccup coming at the last minute.

Does this mean that they have already completed my audit? I thought that the audit wouldn't be completed until after all payments were made. Gosh I have just 6 more payments to make and I am biting my nails now....getting stressed out tremendously. Has anyone received a letter like this before?

[LadyInTheRed]

But what about that 8% to 15% hike? Do they want me to pay more money now?

I don't think so, except that if your plan modification is not approved you may have to turn over the rest of the tax refund. It sounds like your plan estimated that 8% of unsecured claims would be paid. That assumed all creditors would file claims. The trustee has calculated that the unsecured creditors will get more than that. This is probably because not all creditors filed claims and/or your tax refunds resulted in more being paid into the plan than included in that initial calculation.

Call your attorney in the morning and get some reassurances.

ETA: I guess you'll have to wait until Monday to call your attorney. Try to enjoy your weekend and don't worry too much.

[Flamingo]

Note - the tax refund money that will be kept by the trustee will increase the percentage paid out to the creditors. We had to turn over a portion of an inheritance my hubby received during our Plan upon the death of his father. The amount was not that large but it increased the payout percentage of the plan to the creditors. It does not modify any monthly payments, just ups the percentage. I believe that is what is going on here - a call to your attorney will will help.

[flowerchild]

Thanks LadyInRed and Flamingo. Yea after I passed out last night from drinking myself into a drunken mess, I awoke this morning with a much clearer picture of what is going on. You're right, when I added up the amount of my tax refund plus the remaining 6 payments owed, it amounted to very close to amount required to push my percent from 8 to 15. So I think everything is good. I sent out an email this morning to my attorney and he is very responsive so I should hear something next week. It's just that I'm a nervous wreck because I just want this all to be over. Lately any communication from the courts just sends me in a tizzy and I can't think straight.

On to the second thing, so I haven't monitored my credit reports much at all during these last 5 years. Just figured it was screwed anyway. So I decided to get my free reports from that annual credit website and I see one of my creditors that shows charge off and isn't listed on my BK petition. I know, I know dumb move. How I could have missed a $5K balance is beyond me. This was a pre-bankruptcy filing creditor. Do you think its too late to add them with only 3 months left, or should I leave sleeping dogs alone? This credit union has not sent me one notice at all about anything since the BK. Do you think the courts will check my credit report during the final audit and see the account that I missed, although from the letter posted above it appears as if they completed the audit already? If I can include them I surely will, but I just don't want to create a wave and jeopardize my case. Any suggestions?

[LadyInTheRed]

The court is not going to check the credit reports. But, if the creditor didn't get notice of your BK, the debt could come back to haunt you later. Talk to your attorney to find out if it is possible and advisable to add the creditor at this late date.

[flowerchild]

I just heard back from my attorney and he said that its not too late so I can add that missing creditor .

I was so so worried because this is $5K that they could have come back to me for after the discharge. I'm just so close to the end of this all and to be 63 months in....well I'm just tired now. I have two more months to go and the anticipation is unreal. Anyway I don't want to vent anymore but I had to get that off of my chest

[LadyInTheRed]

Excellent!

[frogger]

I just heard back from my attorney and he said that its not too late so I can add that missing creditor .

I was so so worried because this is $5K that they could have come back to me for after the discharge. I'm just so close to the end of this all and to be 63 months in....well I'm just tired now. I have two more months to go and the anticipation is unreal. Anyway I don't want to vent anymore but I had to get that off of my chest

Add that creditor! There are so many people that do not list all of their creditors in their chapter 13 and they will come back to haunt you as fresh, undischarged debt.

[SMinGA2]

Flowerchild, what is the statute of limitations for debt in your state? Ask your attorney (or maybe someone here knows?) does filing bankruptcy toll the SOL? If not, and its less than 5 years, they can't sue you anyhow. Its obviously ~5+ years since you stopped paying on the account.

[flowerchild]

Flowerchild, what is the statute of limitations for debt in your state? Ask your attorney (or maybe someone here knows?) does filing bankruptcy toll the SOL? If not, and its less than 5 years, they can't sue you anyhow. Its obviously ~5+ years since you stopped paying on the account.

I did ask my attorney what the SOL is and he said 6 years. I'm not sure when the account went bad but I think I could just be on the edge of the SOL...just in time for them to sue me once I'm discharged in August. So my attorney just asked for the name, address and balance owed and he will add it. I sure as hell hope that doesn't add any extra payments. I am soooooo waiting for August 28th that I have jitters in my stomach.

[LadyInTheRed]

Flowerchild, what is the statute of limitations for debt in your state? Ask your attorney (or maybe someone here knows?) does filing bankruptcy toll the SOL? If not, and its less than 5 years, they can't sue you anyhow. Its obviously ~5+ years since you stopped paying on the account.

A creditor can sue you after the expiration of the SOL. You then have to file an answer raising the affirmative defense that the SOL has run and incur the filing fees and attorney fees if you are uncomfortable filing an answer yourself. There really is no point in going through a Chap 13 (or even a Chap 7) and not getting every dischargeable debt discharged, regardless of the SOL. If a creditor sues you on a discharged debt, you send them a notice of discharge and threaten to sue for violation of the permentant injunction if they don't immediately dismiss the case. A discharge is much more powerful than the expiration of a SOL.