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Ask Terry L. Your Own Question

Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2493
Experience:  Better Business Bur 15yrs bankruptcy experience. Chicago Bar
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Since I have to stop the garnishing of wages to collect on

Customer Question

Since I have to stop the garnishing of wages to collect on the 46,000 Fidelity IRA money judgement...
1. Is it possible for the Trustee to let him off the hook - and pay me a fraction of the 46,000 or none at all? How does she decide?

2. What if the Trustee's plan states he has to pay me the 46,000 over the 5 years... and at the end of the 5 years he still has not paid me the whole amount...can I start up the garnishing again?
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 2 years ago.

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

The chapter 13 plan sets out the repayment amount. You would then file a proof of claim supporting the balance owed with documents (copy of judgment etc).

Terry L. :

If the debt is unsecured, you are paid pro-rata with the other unsecured debts.

Terry L. :

If you are secured (meaning you have recorded your judgment lien on the title to a home etc). then you are paid according to the plan. If you object to the set repayment, then you need to file an objection to confirmation of the plan.

Terry L. :

Once a plan is confirmed, it generally cannot be changed by a creditor.

Customer:

I did hire a bankruptcy attorney in Maryland - to file the claim for me. We have a Nov 15 date in front of the Bankruptcy judge...

Terry L. :

ok, cool

Customer:

There is no house to put a lein on- he is upside down on the house. Only can go after h is 120,000 salary I guess.

Terry L. :

gotcha.

Terry L. :

so, you are an unsecured creditor.

Terry L. :

You don't have much say, just file your proof of claim.

Terry L. :

The trustee will make sure that the debtor is paying the correct amount into the plan.

Terry L. :

You get to share in that pot with the other unsecured creditors.

Terry L. :

You may only get pennies on the dollar, depending on the required repayment.

Terry L. :

monitor the case. You cannot collect on any balance outside of the case, and if the case is discharged, that's it, the debt is done. You may be able to take a tax deduction for the unpaid portion, so talk to your accountant.

Terry L. :

If the case gets dismissed, many do, then you can start to collect on the full balance agian.

Terry L. :

again.

Customer:

I know my attorney filed our claim- stating all moneys he owes me are secured...:

Customer:

1. 35,000 arrears for childsupport

Terry L. :

Oh, I see.

Terry L. :

then, since you are support,

Terry L. :

you get 100% of the arrears.

Terry L. :

CS is paid as a priority, ahead of the unsecured debts.

Customer:

2. 20,000 legal fees, 3. 35,000 college for children, 4. 46,000 IRA money judgement, 5. $2000 healthcare premiums for children, 6. $1280 sale of childrens car, 7. share of Delphi retirement, 8. maintence for 7 years as per judgement of divorce=$15,000 Our claim is saying all of above is for domestic support or non-dischargable claims based on conversion. not sure what that means. He owes his divorce attorney 25,000 too is that non dischargable?

Terry L. :

if you can support that all of the above are domestic support obligations, then they will be paid at 100%. property settlements are not domestic support obligations, so those may have to be pulled out. have your attorney review which would be covered and which would not.

Terry L. :

property settlements can be paid as unsecured debts, the domestic support obligations - definitely child support, usually maintenance, attorneys fees related to those two.

Terry L. :

the others are a maybe, depending on your case.

Terry L. :

do you have any other quesitons?

Customer:

My Ex filled out his bankruptcy form stating after making 10,000 per month...he only has 2700 left at the end of the month to pay to Trustee...to be split . I know he has padded his expenses and provided info proving that. Sound like I might collect more if his case gets thrown out and I start up garnishing his wages again for the money judgements????

Customer:

does the Trustee ever tell the debtor- hey just live onless because you need to come up with more thatn 2700 at the end of the month to pay the creditors?

Terry L. :

You can attend the 341 hearing and present evidence if the information in the schedules is false. You can request that he prove the expenses

Terry L. :

The trustee looks to the means test calculation to determine what percentage of the creditors are repaid, based on disposable monthly income.

Terry L. :

They look to reasonableness too.

Terry L. :

So, have your attorney review the schedules I & J with you (budget pages).

Terry L. :

If you have evidence that information is incorrect, you can object to confirmation because of it.

Customer:

if the 341 is the initial meeting of the creditors- my atty did attend ...did not have all my documents yet- now she does and has filed an objection to his proposed living expenses. I think that is whart the Nov 15 meeting is for- I am going to that meeting.

Terry L. :

Ok, sounds like your attorney has your back.

Terry L. :

You'll get a nice chunk of payments from the money paid in up front, good luck on the case

Customer:

but can the trustee tell him he simply needs to live on less...perhaps put less than the maximum amount he can put toward his retirement? can i go ahead and file the QDRO's with his Delphi former employer retiurement plan? or is there a stay for that too?

Terry L. :

1min

Terry L. :

It is based on reasonableness. That is subjective. if the trustee feels certain expenses are too high or unnecessary, they can ask for a higher payment amount yes, especially if creditors are pushing the issue.

Terry L. :

The means test calculation sets out some living expenses based on location and household size too, and if the debtor is above those, they have to justify them to the court (which is difficult).

Customer:

QDRO"s???


 

Terry L. :

what is the question?>

Customer:

Can I continue to process the QDRO's with his former employer Delphi Automotive filing the paperwork for half of his retiremnet...or does the "stay " apply to that see my question a few screens ago

Terry L. :

generally QDRO's are an order for a pension company to distribute assets between parties. So the order is to the pension, not to the individual, so usually not an issue in the ch13

Terry L. :

If the order is in place to distribute, then it would be best to bring a quick motion to modify the stay only for purposes of getting the pension as set out in the qrdo order.

Terry L. :

That way you won't have to worry about any stay violation

Customer:

great! one more question- The Federal Gov has been garanishing/siezing his tax returns for past 2 years. Does chapter 13 stop that?

Terry L. :

yes

Terry L. :

the deductions stop, since the plan pays out the debt that the seizure was paying

Customer:

who notifies the federal gov? NYS childsupport told me it was anautomataic process of anyone more than 4 months in arrears on childsupport.

Terry L. :

They get notice from the bankruptcy filing.

Customer:

if NYS child support unit has already received the tqx return money... then get notification of chapter 13... does that money have to be returned to him ?

Terry L. :

any money taken pre-bankruptcy will be kept. any money taken post-bankruptcy filing, should be returned if the debtor pushes the issue.

Terry L. :

do you have any final questions?

Customer:

is that true also for monies garnished from his wages - for my $46000 money judgement- I put in place prior to my being notified of chapter 13? I think a few thousand were garnished before I was told I had to write to Maryland clerks office and stop the garnishing. of his wages.

Customer:

in addition to that last question... if there is a stay of garnishing his wages... do I have to cancel the money judgement or void it out? It was a NYS money judgement I had converted to a foreign money judgement in Maryland(good for 12 years) as his employer is in maryland.

Terry L. :

The stay is effective as of the date of filing. so technically, money deducted after the case filing should be returned (for arrears). Current support deductions can continue.

Terry L. :

Talk to your attorney regarding NY procedures. That is state specific, and beyond the scope of this forum.

Customer:

thank you

Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2493
Experience: Better Business Bur 15yrs bankruptcy experience. Chicago Bar
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