Car payment is ending, payment increasing?

[justbroke]

fedupwithit no worries at all. I just realized that this is pre-confirmation which is the perfect time to deal with potential budgeting issues. This is also the best time to keep bugging your attorney since they typically use what's called a "no-look" fee up to and including confirmation. In that way, you don't incur any additional attorney fees. (Sure, they may tell you that you don't need to keep bothering them, but you should walk away understanding your Plan and how everything will work for you.)

I'm gathering that the Chapter 13 Trustee told you about the step-up in payments at your 341 Meeting. The 341 Meeting is the time where the trustee may make comments on the plan. However, the period of time between that meeting and the final confirmation hearing, the trustee and your attorney work to an agreeable plan. If they don't agree, and your attorney chooses to go before the judge, then they'll have another hearing where your attorney attempts to override the trustee's objection to your plan confirmation.

But, let's just work on the budget. If you have serious things that need fixing then you should plan those out. This should be the minimum amount to make it workable. It can't be a large project which involves replacing "all" the pipes. It can only be what is immediately necessary and urgent. The Trustees like to think of it as "what would you have done if you had no money?" And that answer is to defer the repairs.

A Chapter 13 will indeed force a homeowner to defer most maintenance. I had to defer all my maintenance, even though my house needed a thorough paint job, interior and exterior, and new carpeting. The sewer issue with my home was urgent. The A/C issue with my home was urgent. The plumbing issue with my home (leaking causing large water bills) was urgent. I dealt with these throughout my plan. It was always something and the HOA liked to nail me on my lawn; I had to re-sod the front lawn 3 times during my Chapter 13... but the Trustee approved it!

In a defense of the attorney, the step-up plan was probably something he didn't expect! Some Trustees don't catch the payoff of the vehicle and are okay with the plan. Other Trustees may see it and mention it at the 341 Meeting. It reads as though your attorney didn't expect it and didn't put a step-up in the Plan. The Trustee's office caught a payoff of a car during the plan and the amount was "significant" enough for the Trustee to care.

In fact, there is hardly anyone who gets by the Chapter 13 Trustee with some objection to confirmation. It is a rare thing to present a perfect plan. The Chapter 13 Plan is part black magic and part art. It is a contract negotiation.

[fedupwithit]

Hi justbroke, thank you! I didn't know any of this and honestly am feeling bitter toward them (will get over it though) and very thankful to you all. Do the attorney and trustee make the plan and confirm it without letting us review it? For example, if the attorney is just now starting on the plan based on the hearing, will he present it to the trustee without our ok, or does he send it to us and then have a discussion with us about any changes? Does this depend on the attorney? Because I'm about to be the biggest pest they ever met, if needed.

[justbroke]

Hi justbroke, thank you! I didn't know any of this and honestly am feeling bitter toward them (will get over it though) and very thankful to you all.

Chapter 13s are complex negotiations. In the more simple cases, it's more straightfoward. As complexity is added -- including but not limited to lien stripping -- the fine tuning of the Chapter 13 plan becomes more involved.

Do the attorney and trustee make the plan and confirm it without letting us review it? For example, if the attorney is just now starting on the plan based on the hearing, will he present it to the trustee without our ok, or does he send it to us and then have a discussion with us about any changes?

Your attorney works out your Chapter 13 Plan based on your income, allowed expenses, and any local rules. That plan is presented to all the creditors and the Chapter 13 Trustee. The Chapter 13 Trustee's job is to make sure that the plan conforms to the bankruptcy code and the local rules. The Chapter 13 Trustee also, at a high level, represents all the creditors so they are looking out what's in the best interest of the creditors based on those allowed expenses and income.

As your attorney works through any objections to your (attorney-drafted) Plan being confirmed, your attorney lets you know what will be changed, what may be changed, what could be argued, and what must be changed. It's a fine dance and the Chapter 13 Trustees are usually correct in their assessment (because there is typically only 1 or 2 Chapter 13 Trustees in an entire district and they handle thousands of cases each year... so they see everything). The trustee has a staff of attorneys, some accountants, and support staff. My trustee had 3 staff attorneys (not including himself), plus at least a dozen of other people in the office.

Does this depend on the attorney? Because I'm about to be the biggest pest they ever met, if needed.

This is just the thing. You pay the attorney to worry and deal with the Trustee and to try to get you the best Plan. Remembering that it's a negotiation, the plan is "probably" correct when both the Chapter 13 Trustee and the debtor feel like it is not the best plan. It's trying to find that middle ground.

If your attorney told you -- and I think you stated this -- that they will work on your expenses to try to cover some/most of that difference, then that's a tell. It's telling you that the Chapter 13 Trustee is correct but you may have not exhausted all the expenses that you could... thereby eating up some/most/all of that difference.

[fedupwithit]

justbroke, got it, thank you again

[Carmella]

We also have a step up plan when our car is paid off for about the last 16 months of our plan. Our car is now not drive-able (and too expensive to repair due to age of the car and extent of repairs) and we have a good year left on the payments that we are still obligated to pay. We are trying to figure out how to handle it maybe finance another care which involves attorney filing a motion/court, etc. But whatever happens we are still obligated to pay off that loan and to pay the increased payment (even if we get a NEW car payment).

It does stink, but Chapter 13 is like this. But to me the fact we will be debt free in 5 yrs even with a not so great credit report is worth it. I think the second chance and not having to deal with being sued/wages garnished/increased fines/interest is the pay off in the long run.

[shipo]

Carmella, just so I understand, you now have a non-working car for which you still have an outstanding loan on? If so, "Ouch!"

What kind of vehicle and what is wrong with it?

[fedupwithit]

We also have a step up plan when our car is paid off for about the last 16 months of our plan. Our car is now not drive-able (and too expensive to repair due to age of the car and extent of repairs) and we have a good year left on the payments that we are still obligated to pay. We are trying to figure out how to handle it maybe finance another care which involves attorney filing a motion/court, etc. But whatever happens we are still obligated to pay off that loan and to pay the increased payment (even if we get a NEW car payment).

It does stink, but Chapter 13 is like this. But to me the fact we will be debt free in 5 yrs even with a not so great credit report is worth it. I think the second chance and not having to deal with being sued/wages garnished/increased fines/interest is the pay off in the long run.

Carmella, I am glad you feel it's worth it for you. I do not feel it's worth it for me, given that our payment TRIPLES for more than FOUR YEARS. Nope. And we are not going to do it, either. Our plan has not been confirmed, I'm not going to agree to it and will go before a judge if needed. And also if needed, I'll cancel the whole thing and deal individually with creditors. Because it's ridiculous and would result in more than $27,000 additional being paid during our plan. So I'm happy for you, but this definitely does NOT apply to my situation.

[Carmella]

Carmella, just so I understand, you now have a non-working car for which you still have an outstanding loan on? If so, "Ouch!"

What kind of vehicle and what is wrong with it?

Outlander Sport 2011 Mitsubishi

ABS system / hydralic
All the brakes
Tie Rods
Exhaust
Tires

I think I am forgetting something and they suspect more will be wrong if they started to fix stuff

There's at least two recalls that they would have to fix (no cost on that of course, but still repairs).

The a/c broke down a few years ago and was too costly to repair.

We did not keep up with the vehicle maintenance so I imagine that plays a part in the scenario. But we never had the extra money to put into it prior to BK and after there's not enough in the budget. This is why I am really prioritizing making sure my almost 4 yr old car is in top working order and making sure I get the maintenance done timely.

[shipo]

Did you get the quote from a dealership service department, or from an independent mechanic? I ask because dealerships are routinely twice as expensive for any given repair.