Lack of Feasibility & Plan Base Q

[May2014]

We got our quarterly update from the Trustee, and our plan STILL lacks feasibility. It appears some claims have come in higher than others, and our attorney still hasn't objected to a bogus claim. What we MUST pay (including Trustee and lawyer) is nearly $42k with a plan base of nearly $48k (based on DMI), so I'm not sure where the "lack" comes in.

Our plan base was $47,700 but has now increased to $47,858 because I paid 50% of my puny bonus to the Trustee. Do bonuses and taxes help to cover the "lacking" issue? Do those additional payments simply count as a bonus to unsecured and we'll still have to amend our plan to be feasible?

I have an email in to the attorney. He is quick to answer but slow to do things (like objecting to that claim!). Even the court is slow because we filed a motion to lift the automatic stay back in September on a house we surrendered (we had a buyer line up), and they STILL haven't dealt with it. I'm tired of having no control over these people. I want things straightened out YESTERDAY so that I know there will be a discharge at the end of all this. I am not a patient person...

[Drazil65]

"I'm tired of having no control over these people"


I laughed out loud when I read this, very funny! You lost control over your financial life the day you filed bankruptcy and now they will let you know when things are complete. People file bankruptcy in part because "they" have lost control and the ability to bring it all back around and need help. The bankruptcy court system will step in to "assist" you figure things out and get you back in working order but it under their rules and timeframe. Good practice in the area of patience for sure. Thanks for the good laugh to start off my day though....

[justbroke]

Unfortunately, bonuses and tax refunds are just "added" to the plan base. They do not reduce/satisfy the plan base unless you're in a 100% plan.

For example, what's your basis for objection to a claim? Is it solely that "they didn't provide my signature on an application"? Judges hear that all the time and it's not a basis. A filed claim is "prima facie" evidence of a debt. You'd have to show more than just "show me my signature". If they provided statement copies, that's pretty good evidence of an account.

As for your motion, it would be a Motion to Sell. Only a creditor files a Motion for Relief from the Automatic Stay. If you did file a Motion to Sell, then your attorney should have received "tacit" permission from the Trustee and then scheduled a hearing in CM/ECF (PACER for Attorneys). In general, most motions take AT LEAST 21-30 days to be heard because this gives creditors time to respond. (Some courts allow negative noticing on Motions to Sell. I neither know how your attorney is handling this nor if your District allows negative noticing.)

Bankruptcy cases are not "fast". Again, most things take 3-4 weeks minimum (if there's no hearing). I would hope that your real estate agent understood the process and worked directly with your attorney.

[May2014]

The claim is for a mortgage arrearage that doesn't exist. The claim was filed on June 16 for missing June's payment and added late fee, but the payment including late fee posted June 17. Our attorney has been aware of this since September...

In September, our attorney filed the Motion to Sell (not stay, like I previously said). The document is on Pacer, but that was the end of that.

Plan Base...So if my payments are $795 (yields the $47,700 plan base) and I actually need to pay $48,000 to satisfy all required debts, the bonuses get applied above and beyond the $48,000 and we have to modify to reach the 48k? I don't know what amount the Trustee says we're behind, that's just an example...

Drazil...I paid my attorney, my Trustee receives a fee out of every payment, and I pay my taxes each year. THEY work for ME in my book...at the very least, they should be more timely in their actions. 60 days I can understand, 5 months not so much!

[justbroke]

Chapter 13 Trustees are not paid from taxes. Trustees work for the creditors (because they take some of the Creditor's payments... up to 10%.) Trustees are paid from their commission. The Chapter 13 (Standing) Trustee is not paid through public funds. The Chapter 13 Trustee is a regular attorney that has been appointed by the Office of the United States Trustee to act in a special "fiduciary" capacity to protect creditors. The Trustee receives no funding from taxes. In fact, even Chapter 7 (Panel) Trustees are regular attorneys and receive no public funds. In the case of a Chapter 7 Trustee, the Trustee receives about $60 for each case, unless they find "nonexempt" assets which they can "administer" (and reduce to a cash value) on behalf of creditors. So, other then the Office of the United States Trustee, no Trustee technically receives public funds (from taxes).

As for why your Motion to Sell is stalled, I would bring this up with my attorney. It is the attorney's responsibility to "prosecute" any Motions.

As for how a plan base works, it is based on your DMI as calculated by either Schedule I/J or Official Form B22-C (Means Test). So, your base is based on your attorney fees still due, monitoring fees, Trustee commission, secured debt service, priority debt service and finally by multiplying your monthly disposable income (DMI) x your plan duration. This is the "minimum" (or base) of what you have to pay. If you're in a 100% plan, there is no need for a DMI calculation since you just pay the 100% divided by the plan duration. If you're not in a 100% plan, then any additional income outside the DMI calculation (such as a bonus, tax refund, or other windfall), is contributed to the Plan but does not act to reduce the plan base. In fact, the plan base increases in these circumstances.

If you have any more detailed questions about your specific case, your attorney may be better explaining how your DMI was calculated, whether you're in a 100% plan, and why "additional" income would not help satisfy a plan base. If your attorney has not filed an objection to claim and you are still pre-confirmation, then remind your attorney of this discrepancy in the claim. Please be aware that once you filed your bankruptcy, your mortgage payment should have been paid on time (June 1). The creditor's claim was accurate at the time that it was filed. The creditor may need to reconcile this prior to confirmation so that the confirmation is correct. You likely owe the late fee, yes, but this account should be reconciled. I would hope the creditor would file an amended claim. Your attorney should police the claim prior to confirmation.

It reads to me as though there is a communication problem between your attorney and yourself. I would certainly attempt to have a meeting (face to face) with my attorney to go over any pre-confirmation issues.

[May2014]

Our plan was confirmed months ago. Communication with attorney is fine, getting him to follow through is harder. I realize the Trustee is paid out of my plan payment and not taxes; I was referring to the courts and judges. I understand how DMI works, I understand how the plan base is calculated. My question is whether or not additional payments address the lack of feasibility issue. I realize my attorney is the best source to go to, but I find personal experience to also be helpful. Attorney contacted me today, said he's started on the claim objection; I really want him to finish that before taking on another task.

In the end, I am sure it will all work out...

[justbroke]

No. Extra income does not address feasibility. Feasibility is generally that your plan does not address a key creditor, your DMI, administrative claims and/or priority claims. It's weird that you were confirmed with feasibility issues.

(All of the items I discussed above and in prior posts are from experience and having studied bankruptcy procedure over the past 5 years. I am not an attorney and I'm not a substitute for a person's actual attorney. An individual's attorney has MUCH more knowledge of the specifics of a case, the specifics of procedure within that specific Jurisdiction, the specifics and nuances of both the Trustee and Judge, and other issues related to interested parties.)

[May2014]

Yeah, we thought it was weird to be confirmed. With any luck, this claim objection will take care of the feasibility issue. If not, hopefully we can get it addressed by modifying our plan before the Trustee files a motion to dismiss. It's a shame that additional payments don't count, but there's nothing we can do but move forward.

[justbroke]

Yeah, we thought it was weird to be confirmed. With any luck, this claim objection will take care of the feasibility issue. If not, hopefully we can get it addressed by modifying our plan before the Trustee files a motion to dismiss. It's a shame that additional payments don't count, but there's nothing we can do but move forward.

You are probably on the money that the feasibility issue is that your Plan does not deal with the so-called "arrears" on the mortgage loan. Once that is corrected, maybe the Trustee will change your status.