Not sure.....

[Mgtobin]

To say the least this is not easy! Filed Chapter 13 4/30 & confirmation hearing is July 10. As I posted in another thread, my income varies from month to month. Also after going over the numbers in my plan they did not seem to be accurate. I was able to make my first payment however I have no idea how I am going to do it this month. Renter's insurance renewal is due. Car insurance renewal is due. I had to come up with a deposit for electric. Last month there were 5 pay periods. This month there are 4. Also I'm freaking out because if they start taking the payment automatically from my pay that will leave me nothing to live on or for necessities. I just don't see any hope in this. Any advice? What is a plan modification?

[justbroke]

I have two words for you... step plan! This is exactly why many attorneys, and even I, use a step plan at the start of the Chapter 13. So long as the plan is not setting the debtor up for failure in the future a step plan is perfect for this.

I purposefully setup a step plan where I did not pay my DMI into the plan for the first 5 months so that I could catch up on things (deposits(!) and other things necessary to get "stabilized" after filing). I looked forward several months to make sure I could create a small savings. It worked for me because I almost immediately needed to replace two tires on the car within 2 weeks! Please realize that I still paid my "secured", "priority" and "administrative" debt during this time. I had only removed the DMI from the payments. (I had some other different issues with changing which property I was keeping, so this worked out perfectly.) You must be able to then pay that DMI back over the remaining 55 months (in a 60-month plan). It's not as if you magically don't get to pay that DMI... you're just deferring it in order to get your plan off the ground. (In the Florida Middle District, Chapter 13 Trustees actually suggest "stair-step" plans for similar reasons!)

Since your plan is NOT CONFIRMED, you don't need a plan modification. You would simply file an amendment with the new payments. You must account for any DMI that you are pushing further into the plan.

(Again, deposits, insurance, and other seasonal or quarterly payments are exactly why the Plan must account for this and use a step plan (increasing the payment as time progresses) in order to address this and have the debtor on their feet. You must also be able to budget after the step plan has addressed immediate and necessary payments. Nothing will ever fix an incapability or inability to budget.)

[Mgtobin]

Your response certainly makes sense to me. I will certainly do more research on that. The only thing I'm not understanding is where you said "you removed the DMI from your payments". I believe my payment is my DMI. With that said I'm hoping I can do something like this. After all, isn't your attorney & the trustee there to work with you to make your plan work? Thanks. I' ll keep you informed.

[justbroke]

Well, technically the Trustee wants your plan to work but they have a contradictory goal; that is to make you pay the most to the unsecured creditors and not miss a dime.

There must be something in your plan, and that could include secured debt and attorney fees (administrative fees) along with the Trustee fees.