“That woman filed a claim in our bankruptcy case, and we don’t owe her any money!”
The next line, or paragraph really, of my client’s email asked what was I, her bankruptcy lawyer, going to do about it.
The short answer was nothing.
Not a thing.
I didn’t plan to do anything.
Because when you have a pot plan in Chapter 13, it doesn’t matter who files a claim or for how much.
You pay the same.
Pot or Percentage
When you choose Chapter 13, you get to set the terms of the plan. The plan tells creditors and the Chapter 13 how much money you’ll pay the trustee each month and how that money gets distributed.
The claims of creditors are categorized: secured, priority, co signed, and general unsecured.
You can treat claims of the run-of-the-mill unsecured creditor in two different ways. You can promise each unsecured creditor a certain percentage of their allowed claim:
Creditors holding unsecured claims shall receive 20% of their claim.
Or, you can propose a “pot” plan. You fund a pot of a specified number of dollars, to be shared among unsecured creditors according to the percentage of the total claims represented by that creditor’s claim.
When filed claims differ
The difference between the two ways of stating your payment plan comes out when claims are actually filed. (No creditor gets paid in Chapter 13 without filing a claim.) [Read more…]