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Chapter 13

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chibi
Valued Member

Chapter 13

I have filed for Chapter 13 back in 2019 and my last payment will be in April 2024. I am not in 100% payment plan, however when I log in to NDC.ORG where I keep a truck of everything I have noticed that all my Secured have been paid off and also my unsecured debt is almost paid off. When I add up all the balances left on all unsecured accounts it only adds up to $3000 but if I make all my payments I will overpay by $15000 if I keep sending it until April 2024.  There are 6 accounts that have not filed proof of claim and therefore not gettting anything out of it.

Do you think I should contact my trustee or my lawyer ? I dont want to keep paying $1500 a month for another 10 months only to get it back once they figure out I overpaid

 

Thank you for any help

 

Message 1 of 11
10 REPLIES 10
FireMedic1
Community Leader
Mega Contributor

Re: Chapter 13

We help in many ways in this part of the forum. But legal advice is best to contact your lawyer and discuss the situation. Not blowing you off. Some do get refunds. But that amount. call your lawyer.


Message 2 of 11
WilliamMoller
New Visitor

Re: Chapter 13

Last year I was also in the same situation, I contacted the trustee and lawyer to discuss the overpayment situation, was well solved.

Message 3 of 11
TeresaGleason
New Visitor

Re: Chapter 13

You're absolutely right.

Message 4 of 11
chibi
Valued Member

Re: Chapter 13

And how was it resolved?

I added all the claims and they are all gonna be paid off this month.

Message 5 of 11
chibi
Valued Member

Re: Chapter 13

I am not asking for legal advice, I just wanted to see if there was someone in similiar situation and how was it resolved, thats all

Message 6 of 11
FireMedic1
Community Leader
Mega Contributor

Re: Chapter 13


@chibi wrote:

I am not asking for legal advice, I just wanted to see if there was someone in similiar situation and how was it resolved, thats all


Thats fine. Its a fine line in here. BK is all law driven. I have a poster that is a BK lawyer. if its really legal. I'll go to her. Its mostly what to do before and after BK creditwise.


Message 7 of 11
TRC_WA
Senior Contributor

Re: Chapter 13

Yeah good luck getting $15k back.  I wasn't in 100% payment plan either but my attorney told me I had to make all payments as scheduled.

 

Any overpayments were still distributed to the creditors.

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Message 8 of 11
ForwardLooking
Regular Contributor

Re: Chapter 13


@TRC_WA wrote:

Yeah good luck getting $15k back.  I wasn't in 100% payment plan either but my attorney told me I had to make all payments as scheduled.

 

Any overpayments were still distributed to the creditors.


This has what I was told too many years ago.  The explination of the logic behind it was something like this:

 

In a Chapter 13, any disposible income you have is supposed to go towards the debt and the fees associated with the filing over a 5 year period.  Priority debts (like child support arrearages, past due taxes, and student loan arrearages) will be paid first. Secured debt is required to paid off 100% if you retain the underlying security and is paid second.  All other non-secure debt is to be paid last.

 

Your budget and disposible income estimates are determined by a formula where they plug in the variables based on your current income and living costs.  Your monthly payments are not nescicarly calculated by the amount of outstanding debt to be paid back divided by 60 months (5 years), but rather by how much disposible income you have after substracting reasonable monthly living expenses.  There is a good chance that your monthly payments will exceed what the original payoff percentage estimates are.  If you have a change of income (like a bonus, a raise, an inheritance, win the lottery, etc...) that money or change of income is technically supposed to be reported and given to the trustee.  Any extra money will be applied to any verified outstanding debts by the trustee as long as they are under 100% during the 5 year period.  Any creditor has a right to money the trustee is able to collect from you (minus court and legal fees) even if it is beyond the original estimates and falls within the priority debt guidelines (Priority, Secured, then Unsecured) and does not exceed 100%.

 

I personally experianced this in a chapter 13 I had filed after a divorce years ago.  The initial calculations had me estimated to pay about 80% through the 5 year period.  During my 2nd year, I received a sizable windfall as the company I was working at the time for was sold and my vested options became worth something.  I reported to my lawyer, and we decided to report to the trustee knowing they would take it.  As an end result, I ended up paying 100%, was able to get an early discharge by 2 years, and the trustee returned about 25% of my proceeds from the sale about 6 months later.

 

The moral of the story is that you enter a Chapter 13 because you are seeking relief from the court.  This relief that is granted to you prevents creditors from harassing you, sueing you, or adding extra fees, interest, or costs to what you owe and prevents them from abusing you.  In exchange for this releif, you agree to relenquish any disposible income or funds to the trustee so the trustee can settle your debts during the 5 year period.  The relief before discharge does not grant you the right to pay less than 100% towards your debt during that 5 year period.  It is only when you recieve a discharge that you are absolved of any remain debts that are not paid 100%.

 

This is from my personal experiance and understanding, so please don't take this as advice or fact.  But I do hope it helps answer the OP's question.

Message 9 of 11
Jeffster1
Valued Contributor

Re: Chapter 13

I converted my 13 to a 100 percent plan, and got my DC 1.5 years early. I had had a large jump in income, and after conferring with my attorney, we determined that it was better for me to convert to 100 percent...and get an early DC... rather than have the trustee step in and increase my monthly payments due to my income increase. In any case, my amount owed in the 13 overall was not nearly as much as some of the cases I've read about on here.

 

I ended up getting a nice fat check (actually a series of checks) back within a couple months of my DC. IMHO, you have to let the process play out. 

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