Our CH13 Plan was confirmed last year with a step after 12 months. The payment would increase by $300/month. The reason is that our daughter would be finishing her final year of Montessori (for which they gave us a 50% break on tuition because of our BK situation), and the tuition with the break is $300/month. We have 3 payments to go for her school. She will go to public school next year.
The Plan was confirmed last May, so we were expecting the payment step to come in June. It came this month, automatically generated. We received a letter about it from the TT. We contacted out ATTY. He sent a letter to the TT asking why the step came now, instead of June. The TT responded that the step took place 12 months after our first payment in the 13 (last March), prior to confirmation, which as many of you know is made within 30 days of actually filing for CH13 (which in our case was actually a conversion from a CH7 that was facing a Motion to Dismiss from UST). This was not the INTENT of the CONFIRMED Plan, as should be obvious. We are now left $300 in the hole for the next 3 months. The TT is saying he can't help. This is no small deal.
Anyway....this is a portion of a follow up letter I am contemplating sending to my ATTY regarding the situation in general. Suffice to say I am one EXTREMELY angry and frustrated individual!
I have not sent this, but I am very tempted to do so, and I am very tempted to also send it to the TT. It would probably accomplish nothing to do so, and would probably tag us as some sort of potential problem, maybe even put us in line for even more scrutiny! I am just tired of being a pawn in this game, sacrificed to JDBs and banks. And I find the fact that we must be under the thumb of CH13 for 5 years nearly intolerable when so many can be over and done in the roughly 6 month process of a CH7.....simply because we work and and have an income above some arbitrary number set forth by the government.
Thanks for reading.
The Plan was confirmed last May, so we were expecting the payment step to come in June. It came this month, automatically generated. We received a letter about it from the TT. We contacted out ATTY. He sent a letter to the TT asking why the step came now, instead of June. The TT responded that the step took place 12 months after our first payment in the 13 (last March), prior to confirmation, which as many of you know is made within 30 days of actually filing for CH13 (which in our case was actually a conversion from a CH7 that was facing a Motion to Dismiss from UST). This was not the INTENT of the CONFIRMED Plan, as should be obvious. We are now left $300 in the hole for the next 3 months. The TT is saying he can't help. This is no small deal.
Anyway....this is a portion of a follow up letter I am contemplating sending to my ATTY regarding the situation in general. Suffice to say I am one EXTREMELY angry and frustrated individual!
Having to come up with an extra $300/month for the next 3 months is prohibitive! We are living under the strictest of budgets. I would "point out" that frankly I believe its egregious that certain debtors can file a Chapter 7 and be moving on with their lives in roughly six months from filing without any further government intervention, yet because we worked hard and are blessed to have decent paying jobs that put us slightly over the Means Test calculations for Chapter 7 eligibility, we were forced to convert to Chapter 13 and submit our VERY LIVES to the scrutiny and veritable control of the government for five years, though we committed no crime!
Gas prices are way up. Food is way up. Payroll taxes have gone up by 2%. Health care costs are up. We have maintenance issues with the cars and house that the IRS allowances do not come close to covering. The cars are both around 90,000 miles and expected to run for the next four plus years. They will NOT without maintenance and repairs. I can hardly afford to buy underwear and socks for myself! If our original Chapter 7 had been allowed, and we had NOT been forced to convert to Chapter 13 by the United States Trustee, we'd be in the process of rebuilding our lives and credit right now. But no. We are to live under draconian rules for FIVE YEARS if we are to enjoy the same benefit of a discharge that those under Chapter 7 enjoy in 6 months.
I'm not even saying that we shouldn't pay back some to our creditors, since we are able to do so! Yet the process is one of extreme governmental control and oversight of a family's lives, almost as though we are under some form of home arrest and under suspicion. Now I know that some might answer that the process is voluntary on our part, and that we "signed up for this". I would counter that we did NOT submit to having the freedom to live our lives as we see fit stripped, especially as we have ALWAYS endeavored to be responsible citizens. Up until it became clear that we would have to file bankruptcy, we still made our payments to our creditors every month. We went into further debt to try and avoid bankruptcy by refinancing our home (which is STILL under water by some $40,000, and which we still pay ON TIME every single month). We transferred balances to lower interest cards, and consolidated debts. We sold off everything "extra" we could. We stopped taking vacations. We tried to do things the right way. And this is our reward. This process is counter to everything that being an American stands for, in my opinion.
Another senseless circumstance of this Chapter 13, is that our payments to the unsecured creditors will actually go to junk debt buyers in many cases, and NOT to the original creditors to whom we actually owed the money. The debt was sold for pennies on the dollar, and written off by the banks so that they enjoyed tax benefits, yet we are still expected to pay the full original claim up to whatever percentage our so-called "disposable income" allows, which is in fact far more than what is realistically our disposable income. Our particular confirmed Plan even sets an actual dollar amount of payback (ordered by the Judge) that will REQUIRE us to take out a loan on our retirement funds to complete it, so by definition that would seem to be MORE than our "disposable income"! And we live under the THREAT that if for some reason our case gets dismissed, we would once again be open to lawsuits and harassment by these "creditors", mainly the JDBs, not to mention that all of the money we have paid in legal fees would be for nothing - money we could ill afford to pay in the first place. In other words, "do this, OR ELSE".
If the Trustee cannot help a debtor in a situation such as this one, where the very intent of the Plan was not recognized, then it honestly does not speak well of the Chapter 13 system, and it is no wonder that so many debtors fail to reach discharge. Five years is a LONG time, and unexpected scenarios in life will unavoidably occur. Resolution must be reached in these scenarios, and one would think that those resolutions shouldn't be hampered and handcuffed by so-called "red tape".
Gas prices are way up. Food is way up. Payroll taxes have gone up by 2%. Health care costs are up. We have maintenance issues with the cars and house that the IRS allowances do not come close to covering. The cars are both around 90,000 miles and expected to run for the next four plus years. They will NOT without maintenance and repairs. I can hardly afford to buy underwear and socks for myself! If our original Chapter 7 had been allowed, and we had NOT been forced to convert to Chapter 13 by the United States Trustee, we'd be in the process of rebuilding our lives and credit right now. But no. We are to live under draconian rules for FIVE YEARS if we are to enjoy the same benefit of a discharge that those under Chapter 7 enjoy in 6 months.
I'm not even saying that we shouldn't pay back some to our creditors, since we are able to do so! Yet the process is one of extreme governmental control and oversight of a family's lives, almost as though we are under some form of home arrest and under suspicion. Now I know that some might answer that the process is voluntary on our part, and that we "signed up for this". I would counter that we did NOT submit to having the freedom to live our lives as we see fit stripped, especially as we have ALWAYS endeavored to be responsible citizens. Up until it became clear that we would have to file bankruptcy, we still made our payments to our creditors every month. We went into further debt to try and avoid bankruptcy by refinancing our home (which is STILL under water by some $40,000, and which we still pay ON TIME every single month). We transferred balances to lower interest cards, and consolidated debts. We sold off everything "extra" we could. We stopped taking vacations. We tried to do things the right way. And this is our reward. This process is counter to everything that being an American stands for, in my opinion.
Another senseless circumstance of this Chapter 13, is that our payments to the unsecured creditors will actually go to junk debt buyers in many cases, and NOT to the original creditors to whom we actually owed the money. The debt was sold for pennies on the dollar, and written off by the banks so that they enjoyed tax benefits, yet we are still expected to pay the full original claim up to whatever percentage our so-called "disposable income" allows, which is in fact far more than what is realistically our disposable income. Our particular confirmed Plan even sets an actual dollar amount of payback (ordered by the Judge) that will REQUIRE us to take out a loan on our retirement funds to complete it, so by definition that would seem to be MORE than our "disposable income"! And we live under the THREAT that if for some reason our case gets dismissed, we would once again be open to lawsuits and harassment by these "creditors", mainly the JDBs, not to mention that all of the money we have paid in legal fees would be for nothing - money we could ill afford to pay in the first place. In other words, "do this, OR ELSE".
If the Trustee cannot help a debtor in a situation such as this one, where the very intent of the Plan was not recognized, then it honestly does not speak well of the Chapter 13 system, and it is no wonder that so many debtors fail to reach discharge. Five years is a LONG time, and unexpected scenarios in life will unavoidably occur. Resolution must be reached in these scenarios, and one would think that those resolutions shouldn't be hampered and handcuffed by so-called "red tape".
Thanks for reading.
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