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100% payback - Can trustee force term less than 60 months

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    #1

    100% payback - Can trustee force term less than 60 months

    Good evening, everybody! I have a question and maybe somebody has the answer before I meet with my attorney.

    I'm planning a C-13. Yes, still planning... wrapping up the divorce first... part of the joint debts will be assigned 100% to me in the settlement but I need the divorce finalized before filing the C-13.

    The C-13 will be a 100% payback. My problem is that Schedule I/J indicates that I can actually afford a higher payment than I'm proposing, which will pay off the bankruptcy in 52 months instead of 60. FYI, form 22C indicates a 60 month payback. Obviously I would prefer the lower payment .

    So my question is whether the trustee will force me into a shorter payback period. I guess what I'm asking is whether the DMI, or the payback term will take priority in a 100% payback. Does the law force the trustee in a particular direction, or is it the trustee's choice?

    Thanks!
    Tags: None
    #2
    Wow that is a great question. I know the mods will be able to answer but I would want less payment! Less monthly stress,
    Discharge date: October 2017 (will it ever get here?)

    Comment

      #3
      11 USC 1325(b) states:

      (1) If the trustee or the holder of an allowed unsecured claim objects to the confirmation of the plan, then the court may not approve the plan unless, as of the effective date of the plan—
      (A) the value of the property to be distributed under the plan on account of such claim is not less than the amount of such claim (meaning - paid in full); or
      (B) the plan provides that all of the debtor’s projected disposable income to be received in the applicable commitment period (60 months in your case) beginning on the date that the first payment is due under the plan will be applied to make payments to unsecured creditors under the plan.

      In other words, so long as the Plan provides for payment of all allowed unsecured claims it should not matter if you have excess income as stated in Schedule I and J. Now, maybe your district sees things differently than mine, but I have never had a problem with a Trustee if my client’s Plan pays all claims in full but the Plan payment is less than what my client can afford on paper.

      Des.

      Comment

        #4
        Des, thank you! Assuming that holds up here, then the light at the end of the tunnel is not the Road Runner driving a train!

        Comment

          #5
          Originally posted by Slingerland View Post
          Des, thank you! Assuming that holds up here, then the light at the end of the tunnel is not the Road Runner driving a train!
          Meep Meep!


          I HAD to do that. I just had to. Hopefully it will all work out for you, Slinger!! Good luck!
          ~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~
          Not an attorney - just an opinionated woman.

          Comment

            #6
            Don't worry. it's probably the Coyote and he probably will end up hurting only himself!
            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
            Status: (Auto) Discharged and Closed! 5/10
            Visit My BKForum Blog: justbroke's Blog

            Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

            Comment

              #7
              Trustee represents the interests of unsecured creditors, so they can validly raise the issue. Unsecured creditors are getting 0% interest, so there is a time-value of money. I've had that problem before.
              I am a Pennsylvania Eastern and Middle District Bankruptcy, FDCPA, FCRA and Foreclosure Defense attorney, information I post is based on experience in these districts. It is not legal counsel, consider it friendly counsel.

              Comment

                #8
                What did you do Jim? I have read several cases where the (Chapter 13) Trustee tried to imply that DMI means DMI, but it was a losing argument when it came to a 100% plan. I have also read cases where the Trustee prevailed. Doesn't "plain language" mean anything anymore? Did Lanning affect this?
                Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                Status: (Auto) Discharged and Closed! 5/10
                Visit My BKForum Blog: justbroke's Blog

                Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

                Comment

                  #9
                  Jim, I would be interested as well.

                  In my case, Schedule I/J calls for a $2425 payment, 22C calls for a $2000 payment, and I'm proposing $2125 for 60 months. (I suspect I've fumble-fingered a number somewhere in one of the forms.)

                  Comment

                    #10
                    Originally posted by Slingerland View Post
                    In my case, Schedule I/J calls for a $2425 payment, 22C calls for a $2000 payment, and I'm proposing $2125 for 60 months. (I suspect I've fumble-fingered a number somewhere in one of the forms.)
                    You are over thinking this. Form 22C is a mechanical calculation. Schedule I and J are your real numbers. It would be rare that the final number would be the same.

                    Des.

                    Comment

                      #11
                      Des, you're certainly right. I guess what I'm looking at is that I can comfortably live with $2125 for 60 months better than $2425 for 52. $300 is a pretty big difference!

                      Comment

                        #12
                        Originally posted by Slingerland View Post
                        Des, you're certainly right. I guess what I'm looking at is that I can comfortably live with $2125 for 60 months better than $2425 for 52. $300 is a pretty big difference!
                        Then you should work with your attorney to find expenses to reduce that $2425, assuming your attorney thinks the trustee will object to a 60 month plan. If your attorney has experience in your local court, he/she should know whether a 60 month plan will be an issue.
                        LadyInTheRed is in the black!
                        Filed Chap 13 April 2010. Discharged May 2015.
                        $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                        Comment

                          #13
                          Originally posted by Slingerland View Post
                          Des, you're certainly right. I guess what I'm looking at is that I can comfortably live with $2125 for 60 months better than $2425 for 52. $300 is a pretty big difference!
                          Then set the Plan at $2125 notating that you are paying 100% of all allowed claims and see if it sticks. What is the worse thing that can happen. . . The Trustee or some creditor objects.

                          Des.

                          Comment

                            #14
                            LITR and Des, thank you for replying!

                            I can't believe I've let this drag out for two years... if I had filed two years ago, I would be 40% completed, not starting the journey anew...

                            Comment

                              #15
                              Follow-up... attorney thinks this shouldn't be a problem. Thanks again, everybody!

                              Comment

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