Friday, April 6, 2007

Chapter 13 Plan cannot run more than 60 months

I received an email on a discussion board, and received the same motion from a current client of mine this week. She writes: I received a motion to dismiss my Chapter 13 case from the trustee because my case is running more than 60 months. I am current on my payments, whats up?

What happened is that the chapter 13 trustee's office audited the creditor claims that came in. Your creditors send in proof of the balances owed on each of your debts. Your claims must have come in higher than you had estimated when you filed the case, or else you may have missed one.

Anyways, your plan must complete in 60 months, otherwise your plan is not 'feasible' under the bankruptcy code. You should contact your attorney to review the claims, make sure none are 'doubled up' and have the lawyer prepare a modified plan. If all of the claims are accurate, you would need to increase your plan to allow the case to complete in 60 months. The alternative is to make a lump sum payment to cover the overage. That is often difficult because the chapter 13 uses all of your monthly disposable income.