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Roger
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 26113
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by West
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im wating fo a answer

Resolved Question:

im wating fo a answer
Submitted: 8 months ago.
Category: Bankruptcy Law
Expert:  Roger replied 8 months ago.

Roger :

Thanks!

Roger :

Hi - I'm Roger and I've assisted you before. I searched the question list and don't see a pending question. It's possible that it didn't post for some reason. However, if you'd like to post it here, I'll be glad to respond.

Customer:

Hello Roger

Roger :

Hi - thanks for letting me assist.

Roger :

I'm standing by and I'll respond when your post hits. Thanks!

Customer:

YEs you have here is my question i have been in a chapter 13 for a year now that if you recall i did my self i just recived a trustees recommendation request asking me for various things witch i can supply since i had ny stroke i did this chapter to save my home and i feel i have acompblished that i only have the car and the house in the chapter i have only been making paln payments on the rearage of the home i did not but plan payments in for the car i want to surrender the car back to the lender can i do this and if yes how. i have paid $4500 to the trustee the total in the plan is $11000 i intend to pay this off in 6 months or sooner i want to make sure all my money is going to go to my home rearage and non to the car can you shed some light on what amended paperwork i need to submit i can also foward you his letter if needed

Roger :

Ok. Thanks for the question. Bear with me one moment....

Roger :

Was the car included in the chapter 13 plan at all?

Customer:

This is how it reads in the trustees letter word for word; The plan provides for $0.00 to be paid to santander and schedule j indicates a direct auto payment in the amount of $498,00 per month. The proof of claim filed by santander indicates pre petion areaages It is the trustess understanding the debtors have failed to make post petion payments directly to santander. The trustee objects to direct payments and requires that the payments to creditors secured by personal property be paid throufg the trustee.The trustee requires the order confirming to provide for payment through the trustee. plan payments increasded to provide for payment of secured vechile claim through the trustee thats is

Roger :

Ok. Thanks.

Roger :

The trustee wants to do this in order to collect his/her 10% fee for processing the payment. If you bypass the trustee, then he/she doesn't get paid.

Roger :

However, if you want to rid yourself of the debt that was previously confirmed, a motion to amend the confirmed plan is what should be filed. You would state in the plan that you desire to abandon the property (car) to the lender immediately and to be relieved of the obligations under the plan, and also to have any deficiency to be categorized as an unsecured debt.

Roger :

There are several sample motions to modify confirmed plan online, but you would have to modify one to fit your situation.

Roger :

Also, if the trustee has filed the above in the form of a motion, you can respond to it as well by stating that you will ask the court to abandon the property back to the creditor.

Customer:

I think this were im lost the paln for this whole year is still not confirmed and he wants these recommendations done to confirm my plan correct

Roger :

Ohhhh.....ok.

Roger :

In that case, you would file a motion to modify your proposed plan, and you'll provide that you will surrender the collateral as part of the plan.

Customer:

Its taken them a year to even get to review my case

Roger :

Here's a good link that you can read that discusses the process of surrendering collateral in a chapter 13: http://materials.abi.org/sites/default/files/2011/Nov/SurrenderPropertyCh13.pdf

Roger :

The majority of the law is federal, so it would apply in any state you're in.

Customer:

Ok so can you guide me thru the simple steps of of filling a motion to modify my plan and what forms do i use he wants all these things done by fri nov 22 will they give me more time

Roger :

I don't know that there is a "form".

Roger :

You could check with the local clerk's office to see if they have a motion form. If not, your next best option would be to ask the clerk to provide you a copy of a motion to modify that has been filed in another case that you could use as a go-by (it's public record, so you can get this information).

Roger :

As for the process, you simply draft the document, file it with the clerk and send a copy to the interested parties. The clerk should have a mailing matrix that provides who you would need to send it to.

Customer:

Ok i can do that will the trustees office give me more time to turn this information in and when i do turn it in should i let them know im going to pay this off asap with help from a family member or should i say nothing and just increase my monthly plan payments

Roger :

You can ask the trustee, and he should allow you more time - - but you'll have to consult with him/her.

Roger :

Unless you have the funds in hand, it's likely better to say nothing and just proceed as if you didn't have it - - and when you get the funds, you can make a payment as you please.

Customer:

ok so my payments are $341 i just send them $1000 i can continue to do that and they wont question were the funds came from

Roger :

That's a good question. If you receive a cash gift AFTER your plan is confirmed, the trustee may ask the court to modify your plan and increase the amount you are paying to your unsecured creditors. But, the trustee may have a hard time convincing the court to increase your payment. In a recent case, the United States Bankruptcy Court for the Central District of Illinois (In re Coay, 2012 WL(NNN) NNN-NNNN(Bankr. C.D. Ill. (2012)), the court said that the best efforts test is not applicable to plan modifications after a plan has already been confirmed. This means that if you receive a cash gift after your plan is confirmed, the trustee likely can’t increase the amount you are paying to your unsecured creditors.

Roger :

If you receive the money before your plan is confirmed, your disposable income would increase and the court can also consider the cash gift and other changes in your circumstances when deciding whether or not to confirm your plan. This means that if you receive a cash gift before your plan is confirmed, you may have to pay all or a portion of it to your creditors in your Chapter 13 plan if you want the court to approve your case.

Roger :

If you don't have a large amount of unsecured creditors (as I assumed was the case), then it may make no difference as distributions to those people would be minimal. However, if you have a large amount of unsecured debt, it could be an issue for you to receive this money - - at least before the confirmation.

Roger :

You may be better off to ask the trustee if you could get the money whether he/she would object or try to increase payments to unsecured creditors or whether he'd agree to let the plan close at that point.

Customer:

Ok got it i can control the money comming in as needed i just want to get out of this as soon as possible so my final question at this point when i modifiy my plan and surrender the car the money that i have paid to the trusyee will go to my home rearage only and non to the car am i right

Roger :

Understood. If you start making payments for 2-3 times what you are slated to, it may be a red flag for the trustee.

Customer:

Is it better i send the extra money to my home lender instead and catch up the rearages that way

Roger :

It's better to either pay as agreed under the plan OR have an agreement with the trustee.

Customer:

Ok can u answer me on the money the trustee has after i surrender the car will go to my home only

Roger :

I can't say for sure about that. It will probably be paid to unsecured and secured creditors proportionally.

Customer:

So in your opinion should i keep the car and send the trustee the car payments

Roger :

If you would like to keep the car, that's probably best.

Customer:

ok if my payments are $498.00 and my intrest rate is 18% do i have to stay with that or can i submit something less

Roger :

You can propose a lesser amount at a lesser interest rate. Interest rates hover around 6-8%. You can also extend the term of repayment for 3-5 years (possibly more) to reduce the amount of the monthly payment.

Customer:

would i do this in the motion to modify

Roger :

If you've already proposed a plan, yes.

Customer:

Ok Roger i think i got it im sure if something i do incorrectly ill get a letter from the trustee to correct them

Roger :

Either from the trustee or the court clerk, for sure! As always, if you want to consult an attorney for assistance locally, you can do that. Even if you don't hire the attorney to represent you, you could hire someone to help you draft documents, etc.

Customer:

Ok you have been a great help Roger have a great weekend

Roger :

Sure. You too.

Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 26113
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by West
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