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Voluntary Dismissal of Chapter 13 after completing 3 years of 5-year plan


slyde
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I live in Phoenix Arizona and I filed a petition for Chapter 13 BK -- 5-year plan. I will complete 3 years of this plan in February 2013 afterwhich I plan on submitting a Voluntary Dismissal. I am reaching out to the Forum to see if anyone has had experience with this or can share the Pros/Cons.

 

Reason for Voluntary Dismissal:

  • Plan Base has been met.
  • Each unsecured claimant has been paid 33% of what is owed. (100% of the secured mortgage claim file was paid).
  • It took the Trustee a year and 7 months to respond to the Meeting of Creditors with his Trustee Recommendations (Conforming Plan). I believe by law he is supposed to respond within 35 days.

Reason for filing Chapter 13:

  • Combination of lay-off, move to Phoenix for kidney transplant, COBRA and medical bills.
  • Found a job late 2008 (25% pay cut), but medical bills were way too much to handle.

Timing Info:

  • Feb 2010:  Chapter 13 Petition & Plan filed.
  • March 2010:  First 341 meeting / submitted 2009 federal/state tax refunds / submitted 1st monthly payment.
  • Dec 2011:  Case confirmed*.

Case Info:

  • Attorney Fees = $4,000 ($2,000 up front).
  • Plan Base = $18,000 (initially $15,000 but was raised when Conforming Plan was approved).
  • Total Paid into Plan = $19,053 (includes Federal/State refunds)
  • Total Paid to all Parties = $19,203 (includes remaining $2,000 Attorney fees + $820 Trustee fees)
  • Total Paid to Creditors = $16,203 (NOTE: if necessary I am willing to pay the additional $1,797 to bring the total to $18K.)
  • The Conforming Plan required that I also submit my tax refunds which I have done 3 times to date.

Attorneys:

Early 2009 I found a law firm and on my first visit I was told I made too much money for both Chapter 7 & 13. I was advised to stop the additional freelance work I was getting and come back in 6 months.

 

I went back in 6 months and started the paperwork for a chapter 13.  The Law Firm said I needed to decide prior to signing the papers whether we would communicate via phone or via Email, and I chose Email because I figured it would be a better way of documenting everything.  The Law Firm that is representing me on a scale from 1-10 (1 being the worst) rates a 2.5 at best. This rating is based on the following:

  • Between March 2010 and March 2011 I passed off to 7 different attorneys (without notification).
  • I have to beg them to do the work. (I have documentation to verify this).
  • Trustee Recommendations/Conforming Plan was approved/filed by my lawyer without my consent or signature despite me continually notifying them it contained an error. The Conforming Plan included my Mortgage company (I missed one payment in January 2010 in order to retain my lawyer). I paid the mortgage company this missed payment in Februray 2011 and notified my attorneys of this payment in March 2011 which was 6 months prior to the Trustee Recommendations. Therefore the missed payment should not have been a claim included in the Conforming Plan.
  • It takes them forever to answer my emails.
  • I figure for $4,000 they should be expected to do their job.

 

Any help, suggestions, comments will be greatly appreciated.

 

Thank you,

 

SLYDE

 

 

 

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Plan Base has been met.

 

How? Did you advance pay the monthly payments? Do you think that the base was met because you turned over tax refunds? Your creditors are entitled to receive your net disposable income over the 60 months. The turnover of the tax refunds is in addition to that base as allowing you to keep them would mean that you have not turned over your disposable income. Therefore, your base is really your monthly payment x 60 PLUS tax refunds. You have not met your base (regardless of what the Case Status System Report states since it is not set up to account for the turnover of future refunds).

 

 

Each unsecured claimant has been paid 33% of what is owed.

 

So, if you allow your case to be dismissed (no discharge) each of those creditors will be free to collect the other 67% plus interest. Probably not what you want to happen.

 

 

It took the Trustee a year and 7 months to respond to the Meeting of Creditors with his Trustee Recommendations

 

Not relevant. RB’s office is notoriously late and being late is not prejudicial to your case in any way therefore not a big deal.

 

 

Early 2009 I found a law firm and on my first visit I was told I made too much money for both Chapter 7 & 13. I was advised to stop the additional freelance work I was getting and come back in 6 months.

 

What was your annual gross income including the freelance work? What was the "income" for the 6 months prior to filing? What was your family size? And, for the two years prior to filing, what were the amounts of your tax refunds both State and Federal?

 

 

The Law Firm that is representing me on a scale from 1-10 (1 being the worst) rates a 2.5 at best.

 

Sorry you are having issues with the Firm. That is not the way it is suppose to work.

 

 

Trustee Recommendations. . . was approved/filed by my lawyer without my consent or signature despite me continually notifying them it contained an error. The Conforming Plan included my Mortgage company (I missed one payment in January 2010 in order to retain my lawyer). I paid the mortgage company this missed payment in February 2011. . .

 

Missing a payment in order to pay the retainer is routinely suggested and generally works fine. However, you should have been advised that you had to include that payment in your Plan to be paid back to the mortgage lender. Unfortunately, your attempt to catch up the payment post petition would not have worked since, by law, the lender would have applied funds received post petition to post petition payments. I am sure your attny listed the arrears in the Order Confirming the Plan based upon the Proof of Claim that was filed by the lender.

 

 

Any help, suggestions, comments will be greatly appreciated.

 

Before you make a mistake and allow your case to be dismissed you need to sit down with your attny and go over everything. The option of a Chapter 7 might be on the table or you may find that sticking out the 13 is better. I realize you do not have confidence in the firm you are using but a sit down may help. In addition, there would be nothing wrong with you meeting with a different law firm to discuss the status of your case. Any attny with access to ECF/PACER can review the status while you are in the office and consultations are usually free. I can tell you that from what you write your case sounds "standard" and while you do not like how you got from point A to point B, with another firm, point B might have been the same.

 

Best regards.

 

Des.

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Thank you Des for responding so quickly to my post. Regarding your questions
 

Did you advance pay the monthly payments?

 

No, to date I have made 34 monthly payments to the Trustee as set up in the plan. I understand that the tax refunds are above/beyond the monthly payments.

 

So, if you allow your case to be dismissed (no discharge) each of those creditors will be free to collect the other 67% plus interest.

My plan would be to work directly with the collection agencies to see if a 'pennies on the dollar' settlement can be reached.

 

 

 

Before you make a mistake and allow your case to be dismissed you need to sit down with your attny and go over everything.

Despite my lack of confidence in my attorney's, I will reach out and see what they say

 

My goal is to be able to get a lower interest rate on my mortgage. 

 

Thanks again for your comments.

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