Why did the Trustee File an Objection to My Chapter 13 Plan?
First off, if the trustee has objected to your plan, don’t panic. They often object to ensure that a chapter 13 plan meets procedural requirements. What are procedural requirements? Think of procedural requirements as those things related to ensuring that your papers are in order. For example, they might object on procedural grounds if you have the wrong SSN in your plan or if you have accidentally listed your monthly payments in the wrong section. Under this light, the Trustee is acting in more of a referee role than a representative of your local bank. These sorts of issues happen routinely and are corrected frequently.
In addition to making sure your papers are in order, they also make sure that your numbers are in order. This is where they would object on substantive grounds. What are substantive grounds ? Most of the time, substantive grounds means that the trustee doesn’t agree with your assessment of how much you can pay each month and wants you to pay more. But that’s not all. They can also disagree with a valuation of your home or car or disagree on your treatment of a loan. It could also mean that the trustee disagrees with your proposed payment schedule. Sometimes the grounds are legitimate such as if you’ve lost your job making it impossible for you to actually complete the chapter 13 plan. However, on most other occasions, the real reason that the chapter 13 trustee is objecting is because she wants more money. As you might recall, the trustee receives a 3% cut of every dollar you pay into the plan. The trustee makes more money off a completed plan than anyone. Thus, if the trustee can get you to pay more money, the trustee gets more money in their pocket by increasing their revenue.
Is there Anything I Can Do About the Trustee’s Objection?
Yes. The trustee is a gatekeeper and creditor representative, not a judge. The judge has final say. If your trustee has objected to your plan, you should consult with a Dallas bankruptcy lawyer to see about pursuing approval through the confirmation hearing despite the trustee’s objection. Whether or not you should agree to the trustee’s objections depends on the specific legal nature of their alleged objection and any arguments that you may have to support your position.
Step-by-Step Assistance from a Dallas Bankruptcy Attorney
Many attorneys take the tack of treating the trustee like a judge and simply agreeing to whatever the trustee demands. However, the trustee isn’t the judge and it’s important to note that the trustee has a financial incentive to make you pay as much money as possible.
If you are coming into your 341 hearing, remember our advice: the trustee is not your friend. The trustee is there to extract as much money from you as she can. Always answer her questions truthfully. Beware of trustees that try to entrap you during the hearing. When it comes to dealing with adversaries in the legal field, we live by this adage: expect the best, and plan for the worst.
For more information about your case and how Engel Law Firm can be of assistance, fill out a case evaluation form or Contact Engel Law Firm.