I wrote earlier about 12 tips to better understanding the Chapter 13 plan payment calculation process.
Here’s some more insight into just how your Chapter 13 payment might be increased during your plan term. And please remember that Western Pennsylvania has a “conduit trusteeship” which means that all secured loan payments are to be made through the Chapter 13 plan. Note that most other Chapter 13 Trustees throughout the country permit debtors to make mortgage and car loan payments directly and outside the plan.
1) First, when you and your attorney file the original Chapter 13 plan, this is merely the best guess as to the actual Chapter 13 plan payment. For example, there might be uncertainly as to your exact mortgage arrears. There might be a dispute as to your actual monthly mortgage payment. You and your attorney might not know the amount of delinquent real estate taxes or other claims.
Your original Chapter 13 plan is filed right when the case is filed, and the creditors have approximately 5 months to file their claims. This deadline is known as the “Claims Bar Date”. Here in Western PA, the Trustee will schedule a “conciliation conference/plan confirmation hearing” at which time your attorney should appear and meet with the Trustee (and any other creditors) concerning the exact final Chapter 13 plan amount. The Trustee and your attorney will have reviewed the claims filed by the creditors, and there will be a plan payment amount recommended by the Trustee that will be sufficient to pay the creditors in your case. Therefore, this final plan amount might be an increase from the original plan payment.
2) Here’s the biggie: if you miss a payment or two, then you need to eventually catch up. Unfortunately, you can’t extend a Chapter 13 plan past 60 months. So, let’s say that your plan payment is $1,800 a month, and you miss two payments. If you’re in month 15 and you have 45 months to go, then your plan payment should be increased by $80 a month once you get back to work. Remember that you’ve ultimately got to pay the “Chapter 13 plan base” by the end of your plan term. If the plan payment is $1,800 monthly, then the plan base is $1,800 times 60 months or $108,000.
3) If your mortgage payment changes, then your mortgage company is required to file a “Notice of Payment Change” with the Bankruptcy Court. You get a chance to review this Notice to see that it’s legitimate. But if your mortgage interest rate increases or your escrow account changes, then your plan payment may need to be increased to account for the new payment.
4) Post-Petition Utility Claims. This is unusual area that will surprise many bankruptcy attorneys from other parts of the country. But here in Western PA, if you’re an Equitable Gas customer in a Chapter 13 case, then their lawyers oversee the utility payments of Chapter 13 filers very carefully. If you fall behind on your gas bill, then Equitable Gas may file a motion with the Bankruptcy Court for an “administrative claim” and have the monthly gas bill be paid through your Chapter 13 plan. At this time, Equitable Gas is the only utility creditor approved to file these types of administrative claims with the Bankruptcy Court.
You have questions or comments, please post them below!
can I withdrawal my bankruptcy petition?
Yes, you can withdraw (dismiss) a Chapter 13 case for virtually any reason. You have just about an automatic right to withdraw a Chapter 13, but a Chapter 7 is a different matter. I’ve seen it done, but only for very limited purposes.
So I’ve got 21 months left of a 60 month chapter 13 bankruptcy and was told today by our lawyer that the original amount in student loans was thought to be 30,000. He now stayes this amount Is actually closer to 90,000 because 2 of my biggest student loans did not come forward initially. We told the lawyer how much our debt was in the beging and these loans were on our credit report and our writen report of debt so I have no idea why our debt was ever thought to be this low.
I filed as the lawyer was told, becaise i could not afford the 1800 a month in garnishment from my check each month
They are now asking us to pay 2600.00 a month which is more then half of my take home pay and more then my garnishment was. What is going on and what can I do.
Kelly, it’s hard to say exactly what is happening in your case without knowing more facts. If your student loans are federal (a very important fact to know), then you and your attorney can contact the student loan lender to discuss an Income-Driven payment amount, which is calibrated to your annual income. You should also discuss with your attorney the topic of adjusting the dividend to the unsecured creditors. In other words, the unsecured creditors only get paid a dividend if you have the ability to pay them (after deducting for your regular monthly living expenses. Again, good luck and best wishes with your case.
what if you reach the 60th months your chapter 13 but your plan base isnt met yet. the plan base is 34000 and ive paid 33800
I’m not sure where you live, because the Bankruptcy Courts around the country are a bit different in terms of their practices and procedures. I think though that if you reach out to your Chapter 13 Trustee, and explain that you will soon be sending in the final $200, then they will be okay with that. I don’t think that they would be so heartless to dismiss your case over $200, which you had already paid $33,800!
I want to withdraw from my chapter 13, will happen next ? I am not going to pay 4,000 monthly from 1500 monthly. I have 16 months left on my plan
Hi Crystal, you should discuss this decision with your attorney. In general, Bankruptcy judges are open to Debtors choosing to dismiss their own Chapter 13 cases. But if you dismiss your case, then you will still owe all of the unsecured debt, just as if you had never filed bankruptcy in the first place. I do not know enough about your case and who your creditors are. For example, I have had many clients who have chosen to have their existing Chapter 13 cases be dismissed, in order to file a new case. This permits them to essentially get a fresh 60 month period to pay their debts, and this winds up making it more affordable for the second case. Nevertheless, meet with your attorney to have him or her calculate the financial numbers. Good luck.