341 Meeting Is Done - Creditor Question

[DJC]

Finally we have had a successful 341 meeting. There is still some documentation that was submitted to verify our annual contributions. I am assuming that after the trustee reviews the documentation, we will be confirmed. I do have a question that stems from a very thorough and quite informative class the trustee's accountant presented just prior to the 341 meeting. It was about 3 hours long and included a handout that had information about the chapter 13 and how it will work. One of the headings was titled "Why do creditors have to file a Proof of Claim with the Court?". I will quote what is said in the paragraph; "In order to be paid, each creditor must file a proof of claim after receiving notice of your Chapter 13 filing. Unsecured creditors are allowed 90 days from the date of the first meeting of creditors (341 meeting) to file their claims. Government agencies have 180 days from the filing date of your petition to file a claim. If they fail to do so, they most likely will not receive payments in the plan."

The trustee has set us up with a website that we can log into called the National Data Center. On this website our total unsecured scheduled dollar amount is $195,388.98 and our plan base is $23,304.68. Currently there is only $39,321.82 in claim amounts from all of our listed creditors. There was a death in the family that will net around a $140,000.00 inheritance. When the trustee takes over this inheritance, does that mean we will be discharged because our available assets exceed what was claimed by creditors?

We are in the state of Michigan, Western District.

Thank you so much for the support this group has given to me so far. I did not post for a period, simply because our 341 meeting was postponed do to the death and travel to the funeral.

[justbroke]

I am sorry to hear for your loss. A Chapter 13 and a death are not two things that are exciting for anyone.

Having wrote that, the amount to payoff will depend on how many creditors file by the claims bar date. The claims bar date is that date that is set 90 days after your 341 Meeting. Your unsecured creditors have until that time to file a claim. You do have some choices. You could voluntarily dismiss your case and try to negotiate with the unsecured creditors, of you could just wait and see how many file claims in your bankruptcy. If all of them file, then you would not have enough from the inheritance, less the Trustee's 10% commission, to pay the unsecured creditors in full.

Doing some simple math, $195,000 - $23,000 = what you would not have paid in the plan. This means that there was $172,000 or so that would have been discharged if you stayed in your plan. Since that amount exceeds $140,000 then you would still be in your plan for the entire duration, UNLESS some of the unsecured creditors do not file a claim. I can tell you that if the unsecured creditors learn that there is going to be a large distribution, not the typical 12% that you plan initially called for, they are likely to file a claim. I can't really tell you IF they will file a claim.

Now, let me through another wrench into this. You say that your 341 Meeting was postponed. The "claims bar date" is set from the FIRST scheduled 341 Meeting. I do not recall on which date that meeting occurred and was continued. If that was more than 90 days ago, then the claims bar date has passed and the unsecured creditors that filed will be the only ones paid. In that case, you would be completely done as soon as the inheritance is distributed and the Trustee makes the distributions.

[DJC]

Thank you for the quick reply. May 20th is the stated end of the 90 day period, claims bar date. How would the unsecured creditors learn that there was going to be a large distribution? Does the trustee re-notify all the listed creditors?

[justbroke]

Thank you for the quick reply. May 20th is the stated end of the 90 day period, claims bar date. How would the unsecured creditors learn that there was going to be a large distribution? Does the trustee re-notify all the listed creditors?

No, the Trusty does not re-notify them but if you filed or there were any papers filed in the case, then all the creditors have access to the papers and would have been notified. Let's just wait until May 20th and see what happens. In many cases, some creditor don't file until near the last day to file. There are also many cases where creditors just don't file a claim.