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Chapter 13 and still owe after court order to sell house

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    Chapter 13 and still owe after court order to sell house

    Hello all, This is my first post. Our story is so complicated and has dragged on for literally years.

    Background: My fiance had a divorce order (2008) that included property division. He was to get the second home, and her the other, and he would owe her $100,000 to split differences. She was to sign off of the deed, enabling him to get the pre approved loan to pay her off. She refused to sign off. He could not cough up that kind of cash (not even close without said loan) and was also stuck with all the marital bills as well. (long story, not a smart move on his part) When he couldnt pay the third $25,000 installment, the court handcuffed him. They held him in the back stage or whatever area. Then the Judge said if he emptied out his accounts and gave it all to his X he can stay out of jail. He cleaned out his accounts to stay out of jail....twice
    Claimed Bankruptcy shortly after to prevent this judge (ILL) putting him in jail. No money left at all.

    Fast forward 4 years, and the BK court in Ill. wouldnt allow him the claim BK since the house was for sale and still in the picture. He moved in with me, in WI and filed again,here in WI. That BK worked. (last year)
    Of course his X was not going to stop. Had an adversary action claiming this 100,000 was for Domestic Support Obligations. That didnt fly, and it was denied.
    NOW the trustee is saying she is allowing X's "late" claim due to the wording, and that the payments will either have to go up, or make it a "pot plan".

    Question: wouldnt you think that because the house was court ordered to sell, and her name was still on the deed at the time of the sale, that this money owed her would not be an issue? I simply cannot understand why he would still owe her after losing the house and absolutely no funds were made at the sale. (zero money made in sale) and she refusing to sign off. This ILL judge is not known for his fairness (and that is putting it nicely)
    Our lawyer says no, you cannot reexamine this issue. To me, her not signing off and having the court force you to sell the house to pay her off should have been sufficient. (took a huge hit on the sale price due to economy) Now she is still on the BK for 71,000.
    Trustee said she would not accept an objection...... really? Wow. So now we either have to pull more money out of thin air, or it goes to the "pot plan" and X still gets a slice. I guess that would be the best case, because it would not change his plan, but really, I dont see how they can force higher payments after it has been oked.

    All thoughts are welcome here, it is very complicated, but then again, dealing with a Psycho is a full time job that never ends.

    #2
    There is simply either not enough info in your post or you are not expressing the issues correctly. If at all possible, have your fiancé post the facts. The reason I say this is. . .

    1. You state that there is a court determination that the amount owed to the ex IS NOT in the nature of support.

    2. You state that the ex is being allowed to file a late proof of claim. I assume this is a late GENERAL UNSECURED claim since the debt is not a DSO

    3. You state that the Trustee is telling your ex that he either has to increase his payments or changed the Plan to a "pot plan".

    The problem I have is that while the ex may be allowed to file a late claim, it is a general unsecured claim and would simply share in the distribution to the unsecured creditors, nothing more, nothing less. If he is paying a percentage (less than 100%) then the addition of this late claim would dilute the overall percentage each creditor gets. In the end, whatever was not paid would be subject to the discharge order because the claim IS NOT in the nature of support. So, why would your fiancé care if there is an allowed late claim UNLESS his current Plan REQUIRES him to pay 100% of all allowed claims.

    Does his current Plan require payment of 100% of all allowed claims? If the answer is "yes", why was that a requirement?

    Des.

    Comment


      #3
      1. No, it is not a payment in the nature of support. (BK court ruled on this issue) It is property division from the divorce years ago.
      2. Yes, it is a general unsecured claim.
      He is not paying 100%.
      I guess my question is, how did this change anything? She was already listed in the general unsecured creditors, so why would the payments have to be higher? And why wasnt it a "pot" plan to begin with?
      Also, why would a court demand you pay if the asset (house in this case) were sold and liquidated being a part of the division of property?

      Comment


        #4
        Your questions are why your fiancé needs to post. Nothing should change therefore there is a missing link in your post. Does his bk attny indicate that he must file a modified (or amended) Plan? If so, what is the attny's reason for this?

        Des.

        Comment


          #5
          Yes, he must modify. Lawyer wants a post - petition amendment of the plan to make it a "pot" plan.

          Comment


            #6
            Then the original plan must have provided for 100%. The Plan will be modified and the creditors will simply share in a pie. Whatever does not get paid will be discharged. At this point you need to stop stressing over this as it does not matter why or what is owed to the ex. The Plan will pay what your fiancé can afford to pay over the remaining life of the Plan, which may be less than what he is currently paying. Let the attny do his job and all will work out in the end.

            Des.

            Comment


              #7
              Thank you Des.

              I guess I panic because nothing has ever been smooth with the process. We do have an excellent lawyer, so I will put my faith in him that all will work out.

              I will update when it is figured out.

              Thanks again!

              Comment


                #8
                Can someone clarify for us regular folk what a "pot" plan is?
                I assume it does NOT refer to either a cooking implement or a popular herb

                Welcome btw , Hadit! and good luck!

                Keep On Smilin'

                Comment


                  #9
                  Originally posted by keepsmiling View Post
                  Can someone clarify for us regular folk what a "pot" plan is?
                  I assume it does NOT refer to either a cooking implement or a popular herb
                  Nope, not that dreaded weed. . .

                  Debtor pays $x/month for 36 or 60 months, based upon what he/she can afford and lets the chips fall where they may after paying attny, trustee, secured and priority. Whatever is left in the pot gets split between all other unsecured creditors. Hopefully, it is not much.

                  Des.

                  Comment


                    #10
                    Ha! Love it Des...

                    Comment


                      #11
                      Originally posted by despritfreya View Post
                      Nope, not that dreaded weed. . .
                      LOL! Thanks for the giggle this morning

                      Comment


                        #12
                        We havent heard back on what is happening. Lawyer shared an email to the trustee and it said it was always meant to be a "pot plan" I hope it does work out that way. We are kind of like Bambi's in the head lights with the wordage and going ons in the BK world. Blank stare at paper work that appears to be written in a foreign language. Slowly some seeps in at times.
                        Thank you for the responses. It does help decipher the code!

                        Comment


                          #13
                          Coming up on my 3rd anniversary here and I do believe it's the first time I've heard the term

                          Keep On Smilin'

                          Comment

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