Law Office of Ginger C. Cord, PSC. - Bankruptcy
Free Initial Consultation

Local 859-963-2073

Toll Free 800-762-6916

Call Today

Pursue A Bright Financial Future
[an error occurred while processing this directive]
Freedom From Debt Is On The Horizon

Judges reverses trustee payment decision

Kentucky residents may have heard about a judge's ruling regarding a bankruptcy trustee who altered Chapter 13 plan payments retroactively. The judge from the U.S. Bankruptcy Court for the Southern District of Texas said that the actions of the trustee were shocking and disturbing. The trustee in the case altered 25 plan payments throughout multiple divisions without proper authority or seeking leave from the court.

This was done in error in accordance with a provision in the division's standard Chapter 13 plan as it relates to home mortgage payments. Instead of distributing the amounts in accordance with the plan, it was distributed in the amount of allowed claims. This is because the amount of the allowed claim is to be distributed if it is different than the estimated payment without amending the entire Chapter 13 plan.

When these payments were applied, some debtors fell behind on their payments. The trustee then moved to have the cases dismissed. The court ordered the trustee to restore the original payment amounts in those cases. In a Chapter 13 case, debtors are required to pay a portion of their future income to creditors in accordance with an approved payment plan. The repayment period lasts for three to five years.

Those who are seeking debt relief may obtain it by filing for Chapter 13 bankruptcy. When an individual files for bankruptcy, he or she may have debts reorganized and repaid over a period of up to five years, after which remaining balances may be discharged. In some cases, it may be enough time to catch up on missed payments or to renegotiate the terms of a loan. Other benefits of filing for bankruptcy include an automatic stay to prevent creditor collection actions, such as phone calls, letters or wage garnishment.

No Comments

Leave a comment
Comment Information