I have a big delima, 5 years ago I filed a chapter 13 repayment plan, the problem is, it was filed prior to a four year period of a Chapter 7. My trustee is telling me that I will not get a discharge due to this.
After my case closes, what happens to the interest that was spun down during the repayment period? My auto loan was spun down from 12% to 4.5%.
I need help understanding what to do? I afraid the auto lender will come after me for the back interest, of what they are saying is over $10,000. Any help would be appreciated.
This sounds like the type of question that should be posed to a bankruptcy attorney.
What also comes to mind is: How is it that you were able to nearly complete a 5-year Chapter 13 when you were not eligible to file in the first place? Would attorney malpractice come into play?
@leonel9 wrote:How is it that you were able to nearly complete a 5-year Chapter 13 when you were not eligible to file in the first place? Would attorney malpractice come into play?
Please don't assume the attny did something wrong. OP was "eligible" to file. He/she simple was/is not entitled to a discharge upon completion of the Plan.
There are many reasons why one would seek the protection of the automatic stay even if not entitled to a discharge. In all likelihood one or more of the following caused OP to file sooner, rather than later:
Facing contempt due to failure to pay a DSO;
and there are so many other possible reasons.
Further, in all likelihood, either the Clerk of the Court or the Trustee issued a notice shortly after the case was filed that the Debtor was not eligible for a Discharge. Such is standard procedure.
As to OP's issue, since there will be no Discharge and the Chapter 13 Plan did not contemplate full payment to creditors pursuant to the contract terms, every creditor who was not paid in full will have the right to collect. This includes collecting on any accrued but unpaid interest. Whether or not the creditors will exercise this right is anyone's guess. OP will need to work it out with the creditors if and when he/she is contacted or may need file another bk - one where a discharge will be entered.
Thank you for explaining that so thoroughly! My wife and I went through a very hard time 5 years ago financially, and really did not have a choice but to file.
As far as your explanation, my attorney is not very good at explaining things, even though he is probably one of the best bankruptcy attorneys in the area. So my question is to you, would it be advantagous for me to reach out to the creditors, or let sleeping dogs lie?
The funny thing about this bankruptcy case is that:
1 - About a year ago, one of our cars broke down, we got approval to "incur debt" for a new loan, however the car that was broke, took our bankrupcty lawyer three seperate threatening letters to have them release the title.
2. My other car that we owned during this bankruptcy needs to be replaced, and was waiting till after this case was over to do so...Now I am worried that I won't be able to get a title, or will I have to have some more nasy grams to the lender to release the title?
I am just so upset and confused as we were never explained any of this by anyone, other than we were hearing we could not get a discharge, but did no know the ramifications of doing that? So what do I do?
I would pose it to the attorney, however it is like pulling teeth to get any information out of my attorney, he does not like to be questioned.
Also, at the beginning of the case, my wife and I attempted to file pro-se, and the bankruptcy judge was not real accepting of us attempting to do this on our own. The attorney we have volunteered to help us and reduced his fee and allowed us to pay his fee in the Chapter 13 Plan, so I can't really say he hasn't done anything for us.
1. Would it be advantageous for me to reach out to the creditors, or let sleeping dogs lie?
2. My other car that we owned during this bankruptcy needs to be replaced, and was waiting till after this case was over to do so...Now I am worried that I won't be able to get a title, or will I have to have some more nasty grams to the lender to release the title?
3. I would pose it to the attorney, however it is like pulling teeth to get any information out of my attorney, he does not like to be questioned.
1. This is the million dollar question. The reality is that most of your unsecured creditors will not contact you. Some may simply not realize that a Discharge will not be entered. Others will say “the hell with it” due to the number of years that have gone by.
As it relates to unsecured creditors, I am a firm believer of “do nothing until someone comes calling”. If and when that happens you can deal with the creditor(s) one at a time.
2. I assume this is the car that was being paid under the Plan to which you are worried about the interest accrual. There are no “nasty games” to play. Unless this debt was part of that old Chapter 7 (which I doubt it was), you may still owe something under the contract. If you want the lien released you have to negotiate with the lender to come to mutually agreed terms or pay what is owed. Since you are still represented by an attorney the lender is not going to talk to you about a settlement unless your attny gives the lender express permission. Talk to your attny about settling.
3. As it relates to your attny’s failure to communicate, until he withdraws or your case is closed he is your attny and has an ethical duty to continue to represent you. The parameters of that representation, including cost, should be clearly disclosed in the Fee Agreement you signed. If you cannot get your questions answered by email or over the phone, go to his office to meet with him. This is your bk and you have the right to fully understand it.