Chapter 13 Bankruptcy Payments

Chapter 13 bankruptcy debtors are responsible for making their plan payments to the trustee.   No excuses.

This is true even if your payments are supposed to be deducted from your paycheck.  If no deduction is taken out of your check or if your employer does not remit the money to the trustee, you are still responsible for the payment.

Watch your pay stubs to make sure the payments are being deducted.  If not, make the payment yourself and call your attorney to troubleshoot.  Your case will be dismissed if payments are not made and you will lose the benefits of chapter 13 bankruptcy.

You can check whether the trustee has received payments by setting up an account with the National Data Center.

Neither Topeka nor Kansas City, Kansas, chapter 13 bankruptcy trustees accept cash nor any kind of electronic bank transfer (ACH transactions).  You can set up bill payer service at your bank and arrange for your bank to send the trustee a check if you don’t have employer pay. The Topeka trustee has an electronic payment service provided by a third party.

Nonworking Adult Son Not Counted in Household

B22C CASE, LINE BY LINE…
In re Law, Case No. 07-40863
April 2008, Judge Karlin

Court sustained 13 Trustee’s objection to confirmation as debtor included: adult son in household size, tax levy on Line 33 and duplicated it on Line 49 and unencumbered vehicle on line 28. The decision is a good analysis of the status of B22C case law as of the date of the decision.

Digest by:  Jan Hamilton, Trustee

No Early Payoff, But Chapter 13 Bankruptcy Plan Modification Possible

PLAN MAY NOT PROPOSE EARLY PAYOFF BUT 1329 MAY ALLOW POST
CONFIRMATION MODIFICATION
In re Kidd, et al, Case No. 06-41232
August 2007, Judge Karlin

The Court recognized changes in 1324(b)(4) and held that debtors may not propose an early pay off but may obtain the same in the right circumstances via 1329.

Digest by:  Jan Hamilton, Trustee

Means Test Form Controls Unless Significant Changes in Circumstances

B22C CONTROLS UNLESS SIGNIFICANT CHANGES IN CIRCUMSTANCES
In re Lanning, Case No. 06-41037
May 2007, Judge Karlin

Over the Chapter 13 Trustee’s objection, the Court confirmed the plan because of significant changes in circumstances at the time of filing that caused Line 58 on B22C to be higher than what the debtor could afford to pay. BAP and 10th Circuit Court of Appeals affirmed, Petition for Cert to U.S. Supreme Court pending. Lanning controls in Judge Karlin’s court, until, if and when, the decision is overturned.

Digest by:  Jan Hamilton, Trustee

How Long Does Chapter 13 Last if My Income is Below Median?

BELOW MEDIAN MUST RUN 36 MONTHS, B22C IS TEMPORAL
In re Daniel, Case No. 06-20714
December 2006, Judge Somers

In a Below Median case, debtor’s income is determined by B22C and expenses by Schedule J and must “run” for 36 months (The Applicable Commitment Period) or pay  100% of all allowed unsecured claims. B22C is temporal, rather than a multiplier. Read carefully.

Digest by:  Jan Hamilton, Trustee

Who Gets Paid Out of Chapter 13 Pool?

WHAT GETS PAID OUT OF THE B22C POOL?
In re Puetz, Case No 0620756
June 2007, Judge Berger

B22C presumptively shows debtors projected disposable income, schedules I and J no longer determine plan payment for above median debtor, but, rather, demonstrate feasibility unless there are special circumstances justifying adjustments to B22C. This is not the plan payment but is what goes to “unsecured creditors”, which are general unsecured claims, anticipated attorney fees but not Chapter 13 Trustee fees or priority claims as these are already netted out in the B22C calculations. Contributions and 401(k) loan repayments are not included in calculating disposable income.

Digest by:  Jan Hamilton, Trustee

My Income Is Below Median, How Long Do I Pay My Chapter 13 Payments?

BELOW THE LINE DEBTOR MUST RUN 36 MONTHS
In re Pohl, Case No. 06-41236
May 2007, Judge Karlin
The Court determined that a below the line debtor’s case must “run” 36 months, unless it
pays off all claims in full, citing 1325(b)(4). Below the line disposable income
determined by Schedule J, since the bottom half of B22C does not get filled out by a BMI
debtor. ACP is temporal and not a multiplier. Judge Karlin cited, with approval, Judge
Somers’ decision, In re Daniel and Judge Berger’s decisions, In re Beckerle and In re
Anderson on the ACP issue.

BELOW THE LINE DEBTOR MUST RUN 36 MONTHS
In re Pohl, Case No. 06-41236
May 2007, Judge Karlin

The Court determined that a below the line debtor’s case must “run” 36 months, unless it pays off all claims in full, citing 1325(b)(4). Below the line disposable income determined by Schedule J, since the bottom half of B22C does not get filled out by a BMI debtor. ACP is temporal and not a multiplier. Judge Karlin cited, with approval, Judge Somers’ decision, In re Daniel and Judge Berger’s decisions, In re Beckerle and In re Anderson on the ACP issue.

Source:  Jan Hamilton, Trustee

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