Bankruptcy Trustee Payment Increases in Chapter 13

Aug. 12, 2010 - PRLog -- When a Debtor first files a Chapter 13 bankruptcy, the attorney will give them an amount to be the Trustee payment. However, this amount is based only on the information given by the Debtor. The amount is just a starting point. There is always the possibility that the amount will go up if the information given by the Debtor is not accurate.

Once the bankruptcy is filed, the creditors will file a proof of claim with the court to let them know how much they are actually owed. The claims by secured creditors are usually the ones that will affect a Debtor’s Trustee payments. If a client says they are behind 3 payments, but they are really behind 5 payments the Trustee payment will need to be increased to compensate for the different amounts. Another factor Debtors don’t take into consideration is attorney’s fees for the mortgage company. If the house was listed as foreclosure, there are usually around an additional $2000 in expenses that aren’t listed in the bankruptcy.

Car creditors can also cause a Trustee payment to increase. If the Debtor is only paying the value of the car and the car creditor doesn’t agree with the value the amount the Debtor is paying can increase. The standard used to determine the value of a vehicle, or at least the starting point, is N.A.D.A. This is an official guide of values used by the bankruptcy court to determine the true value of a vehicle. Another way a car creditor can make the Trustee payment go up is if the Debtor is paying the full claim and the proof of claim filed is higher than what the Debtor has listed.

Property taxes can make a Trustee payment increase. If the property taxes are delinquent, they are required to be paid in the bankruptcy. IRS debt and Back Child Support are the same way. If the Debtor has a current repayment plan with the IRS or the Attorney General, they can continue with the repayment plan as long as they are current. If there is no repayment plan, the Debtor will be required to pay the debt through the bankruptcy.

There are other reasons a Trustee payment will go up, but they vary from case to case. If there is an increase in Trustee payment and you aren’t sure why, you should contact your attorney and get an explanation.

For more information visit http://www.homeloan-refiance.com or call us directly. You can read another bankruptcy article here http://www.prlog.org/10825619-the-mortgage-day-ahead-case... and another one http://www.prlog.org/10825639-mortgage-treasury-auctions-... for your reading enjoyment.

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