Trustee Payment on Zero Percent Plan

[hopeforusall]

How much is a Trustee and Administrative cost suppose to receive per month when filing a Zero Percent Payback Plan in a Chapter 13?

[justbroke]

The Trustee payment depends on how much is being paid through the Trustee. So if you have secured debt, like a car and a house, paid through the Trustee, then the Trustee gets the 10% fee with that.

Example: you are in a 0% unsecured payment plan. You have a car for $200/month and a home for $1,500 month included int he plan and paid throught he Trustee. Your monthly payment would be $1,870. That's $200 plus $1,500 for $1,700. Then you add $170 for the 10% Trustee fee.

[hopeforusall]

So for instance if a person has No car or housepayment, and therefore nothing paid "'Through" the Trustee, then in a zero-percent plan the Trustee would not automatically get anything, unless the court orders the Trustee to have a percent out of the monthly payment plan?
What is the definition of a ZERO percent plan? Does that mean that nothing is "Required" to be paid into the plan because the unsecured creditor's would receive nothing in a Chapter 7, but perhaps the person is still paying a little into it?

[justbroke]

So for instance if a person has No car or housepayment, and therefore nothing paid "'Through" the Trustee, then in a zero-percent plan the Trustee would not automatically get anything, unless the court orders the Trustee to have a percent out of the monthly payment plan?

The Trustee would get nothing.

What is the definition of a ZERO percent plan? Does that mean that nothing is "Required" to be paid into the plan because the unsecured creditor's would receive nothing in a Chapter 7, but perhaps the person is still paying a little into it?

A zero percent plan is one in which the unsecured creditors are scheduled to receive nothing in the Plan.

I really don't see how you can get a 0% plan with nothing to secured creditors... get confirmed. I mean... you're not paying anyone.

[HHM]

A chapter 13 won't be confirmed if there are NO PAYMENTS for something. Some recent court rulings held that you cannot have a closet chapter 7 by filing a zero payment chapter 13.

[hopeforusall]

Chapter 13 Bankruptcy Law states that unsecured creditors are not required to receive any more that they would receive in a Chapter 7. If they were to receive nothing in a 7 then that would be acceptable in a 13 if that is all the disposable income the person had and if they had no priority or secured claims.

[justbroke]

Chapter 13 Bankruptcy Law states that unsecured creditors are not required to receive any more that they would receive in a Chapter 7. If they were to receive nothing in a 7 then that would be acceptable in a 13 if that is all the disposable income the person had and if they had no priority or secured claims.

I think you're confusing the two. There are payments to secured creditors and payments to unsecured creditors. You can have a plan which pays nothing to unsecured creditors.

The problem is you can't have a plan which pays no class of creditor (secured, priority, unsecured) any money. What would the purpose be? If you have no secured creditors, no priority creditors (IRS and other past due taxes not entitled to priority), and no unsecured creditors... you don't even have a case. There's nothing to administer. It's like filing a case in your local District Court, and leaving the defendant's name blank. You want the case, but you're not suing anyone. What's the purpose?

I don't see how you do a 0% plan with 0 payments to even secured creditors. Do you not have any secured creditors? If not, I don't see this working at all, unless you put money into the plan to pay unsecured creditors.

I think I understand why you want to do this to get the discharge (because of a prior discharge)... but I don't see this getting confirmed with no payment to no one. You may have to make a token payment to the unsecured creditors.

[hopeforusall]

Let's say you had NO secured debt and Only Unsecured debt. Your Disposable Income is $5.00 a month. Your proposed plan is $5.00 a month. Is that a feasible plan?

[justbroke]

Let's say you had NO secured debt and Only Unsecured debt. Your Disposable Income is $5.00 a month. Your proposed plan is $5.00 a month. Is that a feasible plan?

It's a Plan for sure. The Trustee would make $0.50 a month. I'd actually love that plan.

[HHM]

Chapter 13 Bankruptcy Law states that unsecured creditors are not required to receive any more that they would receive in a Chapter 7. If they were to receive nothing in a 7 then that would be acceptable in a 13 if that is all the disposable income the person had and if they had no priority or secured claims.

True, but a chapter 13 also requires that you devote all you disposable monthly income to the chapter 13 plan. Your unsecured's actually have to receive some dividend, even if it is 0.01 percent of the balance owed. That provision about "at least as much as a chapter 7" establishes the minimum that must be paid to unsecureds, but that provision is not the end of hte story, it is not the "only" test for how much unsecured's are to receive.

If you have no disposable income, you would not file a chapter 13. (Section 109 requires that the debtor have a regular source of income). A chapter 13 must propose a payment of some kind. Now, you can get fairly creative, with tiered plans etc (zero payment for 6 months, then $100 per month in months 7-24 etc).

As to your example, if all you had was $5.00 per month, then yes, you could probably get that plan confirmed, although the US Trustee might object based on feasibility.

Also, big picture here, you posted this in the pro se forum, but chapter 13's should NOT be pursued pro se. They are far different than chapter 7's. Much more happens after the case is filed in a chapter 13, and there are many more pitfalls that not even attorney are always prepared for.

I can certainly guess, but you might as well tell us, why must you file a chapter 13?

[hopeforusall]

Because of changed Bankruptcy laws and having to wait 8 years to file for a seven again. Filed a 7 in 2004. Got off to a good start after that and then a long period of unemployement (without receiving unemployment insurance) and even though I paid my bills on time up to filing the 13, I was overwelmed in crushing debt and the Credit Card companies rewarded my on time payments by jacking up my interest rates to skyrocking amounts for what they called, "business reasons" and then I had to turn to payday loans to keep it together and then you probably know how that chapter turns out.
I agree that if a person has a complex Chapter 13 case then get an attorney. If you have a basic case then a diligent and detailed person can handle it. The court systems would not allow or give the option to file Pro Se if they did not feel a person could handle it in their interest. The law would simply be that you would have to have an attorney. However, the paperwork of a 13 with it's schedules and forms is in great part the same forms as a 7 and again if you have a basic case, there are tons of information available from the courts, forums, attorney sites, law libraries, etc. to help the pro se filer. I personally am glad I am doing it on my own as I feel it is a challenge that I can undertake and get through. In viewing past cases in the court system, the most common reason for having PRO SE 13 cases dismissed was just dumb, common sense stuff such as the Debtor not attending the 341 meeting or simply not submitting the forms that the Trustee requested, not making payments, those things an attorney does not need to handle, that is basic responsibilities that a responsible pro se filer can handle. I was sitting in my creditor's meeting listening to a couple and their attorney sit with the Trustee. The attorney failed to list one of their primary vehicles on the schedule, failed to have their current address on their forms, and did not use their disposable income for their plan. So having an attorney does not assure competence anyway.

[justbroke]

What HHM was writing about, regarding filing Chapter 13s pro se, is not meant to say absolutely don't do it... do it going in with the knowledge that they can get complex and time consuming. As you know, I'm in a Chapter 13. I've spent countless hours upon hours upon hours to get my entire petition, plan, motions, objections, oppositions, notices, service, Trustee requests, and court date... all together. That's all.

I'm able to dedicate (on average) 20 hours a week to my case. I still spend about 10 hours a week as I'm considering a conversion, but that's a long story and not worth going into here.

First, I don't consider a Chapter 13 case a real one, unless and until it makes it to confirmation. The reason most "real" Chapter 13 cases fail, is that the "disposable monthly income" calculation and the resultant payments for the Plan (through the Trustee or not) have left the debtor with a budget that will never work. If the Trustee catches it beforehand, they can object to confirmation in that the Plan is not feasible and does not pay certain creditors certain amounts.

I guess the hardest part to confirmation is if you get into some litigation, which is more likely in a Chapter 13 -- because of the Confirmation process. Some pro se Chapter 13 debtors get through confirmation very easily, because their case is simple, they have no secured debt, and are paying substantial amounts to the unsecured creditors.

Attorney or not, properly filing your petition and required schedules, responding to the Trustee's requests, paying on time, and showing up for hearings/meetings... is what keeps a case on track. However, there are things within the case (complex cases) that can make even that, difficult.

So, we'll just say that your case is a simple, minimum asset Chapter 13 case. (There really isn't a no-asset Chapter 13, as tax refunds are property of the Estate in most jurisdictions.)

Back to the key issue, is that your plan must pay something to somebody. Otherwise, it's fruitless. There are many Chapter 13 attorneys that will have their clients toss a "few dollars" a month towards unsecured creditors, just to avoid objections to confirmation. Even though you may toss a few dollars to the unsecured creditors monthly, I would be surprised if a large creditor (which you owed $10K or more) would not file an objection.

I'm playing Trustee and Creditor at this point.

As I creditor, I may be inclined to file an objection to confirmation because you're attempting a back-door Chapter 7. As Trustee, I may file an objection to confirmation because you're not really committing anything to the plan, and may file such as a bad faith objection.

Your key to success will be what your Schedule I, Schedule J, and B22C (if you're over-the median) show. It may also be your downfall if you're paying nothing to no one.

That's my Trustee/Creditor view. Of course, no one may say anything and your case is confirmed. That would mean that the Judge, as well, sees nothing wrong with a $0/0% plan.

You could get creative, as HHM wrote. However, I think you need to pay the unsecured creditors something. I think you said your plan is 36 months. There has to be some dividend to the unsecured creditors over that time. The more they get, the less chance of an objection to confirmation.

[HHM]

The thing is, there really is no such thing as a simple chapter 13. Even if there are no non-exempt assets that need reconciling or priority debt, the pro se debtor is at a disadvantage. The chapter 13 budget is key, Schedule J and B22. Even if you research other cases on PACER, you really don't get a sense of what will work and what won't.

From a schedules' perspective, your case may be simple (actually it isn't because it sounds like you will have to fudge the numbers to show Disposible Income), but unlike chapter 7, your schedules really only account for about 1/3 of the potentional issues in your case. If your chapter 13 case is such that you will be proposing zero or token payments, THAT IS NOT A SIMPLE CASE. As Justbroke pointed out, you are looking at potential objections from the BK trustee and creditors. Hopefully they won't materialize, but becasue your pro se, the trustee will probably try to take advantage of that.

The problem is, it sounds like you really are trying to back-door a chapter 7, and that is problematic. I am not againt pro se, far from it, I just think that in chapter 13 especially, pro se debtor's end up leaving money on the table and step on too many land mines. Also, the thought process behind making the decision to file pro se is usually flawed. The reality is, most people can afford an attorney and it is either laziness, stupidity, or arrogance that keeps them from figuring out how to get the money together. If someone is too lazy or stupid to budget in order to afford help, what chance do they really have of putting together a chapter 13 budget and succeeding in the plan?

Let me take issue with statement

The court systems would not allow or give the option to file Pro Se if they did not feel a person could handle it in their interest.

Actually, there is no legal area in which an individual is required to have an attorney (unless the person is declared mentally incompetent). You can defend yourself in a murder trial, but should you?

[hopeforusall]

Everyone has their own experience. My experience is that both the Clerk's office and Trustee have been supportive of me as a Pro Se Chapter 13 filer. My Trustee did not in anyway hold me at a disadvantage for being Pro Se. He said of my first plan which he recommended for Confirmation that it was "well conceived" in his letter. When my trustee asked me at the creditor's meeting if I filing 13 because of the previous 7, he simply nodded that he understood the situation. Bankruptcy Law is very clear on who can file what type of Bankruptcy and when. IT IS NOT considered slipping in the backdoor and doing something devious as you seem to be indicating by having to choose a 13 when the option of a 7 doesn't exist for the person. Nor did the Trustee or ANYONE, including attorney's I have had free consults with feel that was the case. One attorney praised me as a Pro Se filer as said "good for you!" and gave me some good pointers. I never once in these threads said I plan to propose a zero payment. I simply asked what is a ZERO percent plan is, as I hear the term thrown around a lot and did not know what it meant. I was concerned that I could only pay a small amount, but as one attorney I spoke with said "it was not my fault I lost my job and it happens all the time". Believe me I would rather have my job and pay my originally proposed amount. Also anyone who is on unemployment income has to drastically cut back on expenses to survive economically and my schedule will show that cut back to all my basic living expenses. You may consider that "fudging" the numbers, HHM, whereas it is simply the reality of having lost your job and making it work.
I wonder why people post in a forum section that is suppose to be supportive and encouraging to Pro Se filers when they vehemently appose someone being a Pro Se filer, whether Chapter 13 or otherwise. It really isn't too supportive to go to every Chapter 13 posting and say get "get an attorney" or that "my prediction is that it won't work".