QUESTION
My Bankruptcy will not be paid off on time what are my options?
Asked on May 13th, 2013 on Bankruptcy - Arizona
More details to this question:
I filed for chapter 13 bankruptcies in 2008. The courts had settled on a payment of $300/month based on my debt, which did not include my house i was foreclosing on because it had not yet sold. When the house sold a year later, the additional debt was tacked on but my monthly payments were not adjusted. I now have 7 months left on my chapter 13 and have a remaining balance of $7000. I have now been informed by my attorney that the trustee is wanting to dismiss my case since I will not have the balance paid off within the 5 year period. In order to avoid this, we need to increase my monthly payments to $1000/month so that I can pay the balance off in the allotted time period. I understand that this is still my debt and needs to be paid but shouldn't this have been something that have been known about before now? Shouldn't my payments been adjusted at the time of the house sale? Do I have any other options to avoid having my payments increased?
5 ANSWERS
There are a number of factors that are involved when determining your "plan base", which is the total amount of money you have to pay into your plan to get your discharge. Without looking at your Chapter 13 plan, it is impossible to determine what your plan base was and why you are so far behind. You are required to pay all tax refunds you received while you are in the plan to the Trustee, and often times debtors fail to pay those tax refunds in and that can result in a situation like yours. If you truly have $7,000 remaining to be paid into your plan, and you can't afford the plan payment increase, you should look into whether you can get the money from a retirement account, borrow it from friends or family, or sell an asset. The Court will not let your plan go beyond 60 months, so you have to find a way to get it paid off in time.
Answered on May 15th, 2013 at 7:03 AM
bankruptcy Attorney serving Paul, ID
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Paul N. J. Ross Law, PLLC
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Something is not correct here. There are too many questions here to resolve this question. Visit with another attorney to determine the proper outcome. Typically when a Chapter 13 is completed, the remaining debts are discharged. Why your attorney is asking to increase payments does not make sense. This could be different if it was a 100% plan at the time and a motion to discharge would be required at the end of payments. But it does not make sense why your attorney and the trustee would want more money.
Answered on May 15th, 2013 at 6:48 AM
Personal Injury Attorney serving Glendale, CA
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JT Legal Group
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It's foolish to give advice when someone is already represented by counsel. There are so many confusing things about what you're saying that I don't know where to begin with my analysis. For example, why are you filing a Chapter 13? Just because you don't satisfy the means test or is there another reason? Why can't you convert the case to Chapter 7 now? Why do you have to pay the deficiency on the house? Why wasn't the Plan modified a long time ago to take account for this deficiency? Most of the things you say allude to either you not understand the facts and situation or your attorney not being a good one. Maybe you need another attorney? I don't know. I do know that I would be pissed off if after 4.5 years my 13 was dismissed!!
Answered on May 15th, 2013 at 6:02 AM
Deborah F. Bowinski
You need to speak to your attorney to see whether there are any other options for you at this point. Practices vary widely from one jurisdiction to another and this sounds like an issue specific to your region. Your attorney will be knowledgeable about your plan provisions and the practices of your trustee and court, and is the best person to advise you.
Answered on May 15th, 2013 at 5:57 AM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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Talk to your bankruptcy attorney. They should be able to explain your options assuming that they are a very experienced chapter 13 attorney.
Answered on May 15th, 2013 at 1:57 AM