When people file a chapter 13 case, they have payments that are being made to the trustee. Many complain because of the payments increase at some point in the bankruptcy. Debtors don’t have a large understanding of why this happens. The reason is because they have not been educated enough about the process.
There are many reasons why payments will increase to the trustee. One of the main reasons is that the payments that we figure for you are preliminary. This means that they are not set in stone. The information that is provided for on the preliminary plan is just that, preliminary. After the case is filed, creditors have the opportunity to file proof of claims. One major issue that arises is the mortgage company proof of claims. Most times their proof of claim will come back higher than what we have listed on the preliminary plan, so at confirmation, about 3 months from the date that the case is filed, the creditor can file an objection to have the full proof of claim provided for. In most cases, the payment won’t increase until month 11 or month 12, to allow you some time to make adjustments.
We try our best to make your plan reflect as accurately as possible, but there are things that come up that will cause the payments to increase. At any time you have questions about your payment, contact your attorney’s office immediately.
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