.jpg)
Conduit Payments
My question is: Why do the trustee's get a percentage of the plan to begin
with?
We have a flat rate, or fee apps.
We should not incentivize trustees to try to force conduit payments on
Debtors when it's NOT in the best interest of the debtors.
Christine
Christine A. Kingston, Esq.
Law Office of Christine A. Kingston
5011 Argosy Avenue, Suite 3
Huntington Beach, CA 92649
Office: 714-533-9210
Fax: 714-489-8150
Email: attorneychristine@gmail.com
Blog: www.losangelesbankruptcylawmonitor.com
The post was migrated from Yahoo.
Dennis made a good point and I thinkwe can all agree that makingIts not reasonable topresume thatthe majority of debtors are routinely incurring late charges to the home loan lenders. Nor is ittoring notices of mortgage payments changes. Moreover, manychapter 13 debtors benefit from the gapperiod between missinghome loan payments and the lenders' notice of past-due payments and/or relief from stay motions.
Trustees may benefit from conduit payments because they reach their maximum compensation point sooner, but I'm not convinced that debtors and debtors' attorneys would benefit.
Law Office of Peter M. Lively * Personal Financial Law Center I
11268 Washington Boulevard, Suite 203, Culver City, California 90230-4647
Telephone: (310) 391-2400* Toll Free: (800) 307-3328 * Fax: (310) 391-2462
On Sunday, September 20, 2015 10:09 AM, "easky1@yahoo.com [cdcbaa]" wrote:
Mike:
I wasn't ignoring anything and don't know why you would accuse me of such a thing. I was just showing the group the math. In the example I gave, the trustee's fees would have to be below 1% before there was even a break even.
Also, we have so many chapter 13 trustees in this district, I cannot imagine the percentage getting below 3%.
All of the other "advantages", were speculative. If we got all of those benefits for our clients, the math would get closer, but, I have yet to see a trustee charge less then 3%, and I don't believe people who make statements and don't do the math, or at least give a few exemplars. You can if you like, so lets agree to disagree.
The post was migrated from Yahoo.
You may be correct based on 3% but what about 1% or .5%? etc? In Tennessee,
they said in 2-3 weeks the percentage dropped to 2.7%. The housing prices
in the CD will cause the percentage to drop significantly below 2.7%.
The question is whether *any* percentage above 0% a good deal? Depending on
the percentage, there is a critical point where one option is better than
the other option depending on the individual.
You calculated this critical point to be 10%/3% or 3.333. So at 1%, it
would be 10 times, at .5% it would be 20 times, etc. Basically, more and
more people would benefit as the percentage decreased but there would
always be a possibility for losers.
The problem with the calculation above is it is not a complete story
because you are ignoring other benefits. One of those benefits mentioned
during the seminar was late fees @5%.
If your client is getting hit with 5% late fees every other month, suddenly
that is a 2.5% hit against their mortgage payments. Now you are comparing
10% plan payments + 2.5% mortgage payments vs. 3% plan payments and 3%
conduit mortgage payments.
In conduit districts, banks are waiving all late fees and all default
interest. That's a big deal. There are miscellaneous charges of 4-6k for
distributions to beneficiaries. Those will go away. There are charges of
$250 to $750 for drive by appraisals, etc. Those will go away.
Strictly speaking in dollars and cents, the conduit system seems to be the
better option.
If we delve into whether we have duties as debtors' counsel to fight banks
on these fees, then the conduit system makes even more sense.
There are problems created with the conduit system but none that can't be
solved by making nonconduit payments under those particular circumstances.
I'd elaborate but church calls!
As an aside, even though the trustee fee right now is 10%, the effective
fee paid by our clients is 11.1% or 10/9 % to be exact. This additional
1.1% would be reduced by conduit payments.
Sincerely,
*Michael Avanesian, Esq. *
Simon Resnik Hayes, LLP
15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403
Tel: 818.783.6251 | Cel: 818.817.1725
*Confidentiality**: *This electronic transmission and its contents are
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On Sat, Sep 19, 2015 at 7:30 PM, easky1@yahoo.com [cdcbaa] wrote:
>
>
> Mark:
>
> Thanks, but on the atty's fees, I made an error, 3 percent of 5000 is only
> 150, not 1500, I was a dime off.
>
> I've been thinking about this all day, and it appears to me that the only
> time conduit payments could be in our clients best interest would be when
> the total mortgage payments during the 60 months (plus the defaults) are no
> more than 3.33 times the plan payments without a conduit.
>
> This is not Tennessee, we don't get that kind of math too often. Mortgage
> payments here are just too high.
>
> It would also seem that it would matter what your client's interest rate
> is. If we are in a high interest rate period, a million dollar loan costs
> 10k per month. In a low interest period, say 3 percent, a million dollar
> loan costs 4,216.04 per month.
>
> At 10k per month, 12 percent interest, a 60 month conduit addition would
> be 600,000.00, 3 percent of that is 18,000 in trustee's fees. Your client
> would have to be 180,000 behind on a mortgage before a 10 percent trustee
> fee would be more than 18,000.
>
> At 4,216.04 per month (3 percent) the conduit addition would be
> $252,962.40. 3 percent of that is 7,588.87
> Your client would have to be 75,888.70 behind before a 10 percent fee
> would equal the fee.
>
> I hate when presenters make blanket statments without any math. Sorry, I
> guess I am too slow to just believe them.
>
> d
>
>
>
>
You may be correct based on 3% but what about 1% or .5%? etc? In Tennessee, they said in 2-3 weeks the percentage dropped to 2.7%. The housing prices in the CD will cause the percentage to drop significantly below 2.7%.The question is whether *any* percentage above 0% a good deal? Depending on the percentage, there is a critical point where one option is better than the other option depending on the individual.You calculated this critical point to be 10%/3% or 3.333. So at 1%, it would be 10 times, at .5% it would be 20 times, etc. Basically, more and more people would benefit as the percentage decreased but there would always be a possibility for losers.The problem with the calculation above is it is not a complete story because you are ignoring other benefits. One of those benefits mentioned during the seminar was late fees @5%.If your client is getting hit with 5% late fees every other month, suddenly that is a 2.5% hit against their mortgage payments. Now you are comparing 10% plan payments + 2.5% mortgage payments vs. 3% plan payments and 3% conduit mortgage payments.In conduit districts, banks are waiving all late fees and all default interest. That's a big deal. There are miscellaneous charges of 4-6k for distributions to beneficiaries. Those will go away. There are charges of $250 to $750 for drive by appraisals, etc. Those will go away.Strictly speaking in dollars and cents, the conduit system seems to be the better option.If we delve into whether we have duties as debtors' counsel to fight banks on these fees, then the conduit system makes even more sense.There are problems created with the conduit system but none that can't be solved by making nonconduit payments under those particular circumstances. I'd elaborate but church calls! As an aside, even though the trustee fee right now is 10%, the effective fee paid by our clients is 11.1% or 10/9 % to be exact. This additional 1.1% would be reduced by conduit payments.
The post was migrated from Yahoo.
Reply-To: Vicki
X-Original-Return-Path: Vicki
To: cdcbaa@yahoogroups.com
X-Yahoo-Newman-Id: groups-system
Pat Said had a good comment on conduit payments. How often do our clients have the money to pay the mortgage payment, arrears and the plan payment at the same time.Most don't get paid 1/month and if you're self-employed, the income can be sporadic. Out real estate prices/costs are just too high for most of them,Best regards,
Vicki L. TemkinLaw Office of Vicki L. Temkin
By appointment:16133 Ventura Blvd. Suite 700Encino, Ca 91436Tel: (818) 501-4658Fax: (818) 501-0903
Mailing address:15021 Ventura Blvd. #753Sherman Oaks, Ca 91403Tel: (818) 501-4658Fax: (818) 501-0903vicki@vtemkinlaw.comwww.vtemkinlaw.com
From: "easky1@yahoo.com [cdcbaa]"
To: cdcbaa@yahoogroups.com
Sent: Saturday, September 19, 2015 7:30 PM
Subject: Re: [cdcbaa] Conduit Payments
Thanks, but on the atty's fees, I made an error, 3 percent of 5000 is only 150, not 1500, I was a dime off.
I've been thinking about this all day, and it appears to me that the only time conduit payments could be in our clients best interest would be when the total mortgage payments during the 60 months (plus the defaults) are no more than 3.33 times the plan payments without a conduit.
This is not Tennessee, we don't get that kind of math too often. Mortgage payments here are just too high.
It would also seem that it would matter what your client's interest rate is. If we are in a high interest rate period, a million dollar loan costs 10k per month. In a low interest period, say 3 percent, a million dollar loan costs 4,216.04 per month.
At 10k per month, 12 percent interest, a 60 month conduit addition would be 600,000.00, 3 percent of that is 18,000 in trustee's fees. Your client would have to be 180,000 behind on a mortgage before a 10 percent trustee fee would be more than 18,000.
At 4,216.04 per month (3 percent) the conduit addition would be $252,962.40. 3 percent of that is 7,588.87Your client would have to be 75,888.70 behind before a 10 percent fee would equal the fee.
I hate when presenters make blanket statments without any math. Sorry, I guess I am too slow to just believe them.
d
The post was migrated from Yahoo.
X-Original-Return-Path: Vicki
To: cdcbaa@yahoogroups.com
X-Yahoo-Newman-Id: groups-system
Pat Said had a good comment on conduit payments. How often do our clients have the money to pay the mortgage payment, arrears and the plan payment at the same time.Most don't get paid 1/month and if you're self-employed, the income can be sporadic. Out real estate prices/costs are just too high for most of them,Best regards,
Vicki L. TemkinLaw Office of Vicki L. Temkin
By appointment:16133 Ventura Blvd. Suite 700Encino, Ca 91436Tel: (818) 501-4658Fax: (818) 501-0903
Mailing address:15021 Ventura Blvd. #753Sherman Oaks, Ca 91403Tel: (818) 501-4658Fax: (818) 501-0903vicki@vtemkinlaw.comwww.vtemkinlaw.com
From: "easky1@yahoo.com [cdcbaa]"
To: cdcbaa@yahoogroups.com
Sent: Saturday, September 19, 2015 7:30 PM
Subject: Re: [cdcbaa] Conduit Payments
Thanks, but on the atty's fees, I made an error, 3 percent of 5000 is only 150, not 1500, I was a dime off.
I've been thinking about this all day, and it appears to me that the only time conduit payments could be in our clients best interest would be when the total mortgage payments during the 60 months (plus the defaults) are no more than 3.33 times the plan payments without a conduit.
This is not Tennessee, we don't get that kind of math too often. Mortgage payments here are just too high.
It would also seem that it would matter what your client's interest rate is. If we are in a high interest rate period, a million dollar loan costs 10k per month. In a low interest period, say 3 percent, a million dollar loan costs 4,216.04 per month.
At 10k per month, 12 percent interest, a 60 month conduit addition would be 600,000.00, 3 percent of that is 18,000 in trustee's fees. Your client would have to be 180,000 behind on a mortgage before a 10 percent trustee fee would be more than 18,000.
At 4,216.04 per month (3 percent) the conduit addition would be $252,962.40. 3 percent of that is 7,588.87Your client would have to be 75,888.70 behind before a 10 percent fee would equal the fee.
I hate when presenters make blanket statments without any math. Sorry, I guess I am too slow to just believe them.
d
The post was migrated from Yahoo.
Dennis, you paid attention in math class! Conduit payments are great for debtors who don't have them!
Mark Jessee
Sent from my iPhone
> On Sep 19, 2015, at 2:31 PM, easky1@yahoo.com [cdcbaa] wrote:
>
> Hello Everyone:
>
> Today we had three panel members telling us to support conduit payments of mortgages in ch 13's. I tried to ask a question to get a reason why and was told I was too slow to get it, that the trustee's fees would come down to 3%, and it would be cheaper, but here is the math:
>
> Suppose your client's mortgage payment is $3,000 per month, and with late charges, etc, the client is $20k behind and needs a 13.
>
> $20,000 x 10% is all the trustee's fees in our current system, cost $2,000.00 ($3,500.00 if your entire attorneys fees were in the plan.)
>
> With conduit payments, the entire 60 months of payments would go through the trustee, $180,000.00, plus the arrears payments, $20,000.00, total $200,000.00. Even with a 3% fee from the trustee, the trustees fees would be $6,000.00. ($7,500 if you add atty fees)
>
> I don't know why Ms. Porter just insulted me to quiet my question, but $6,000 is a greater cost than the $2,000 without a conduit.
>
> In fact, the dollars would only turn around to be positive for the debtor if the debtor had $120,000, more that had to be paid through the trustee.
>
> Don't support conduit payments.
>
> Dennis
>
>
>
>
The post was migrated from Yahoo.
Reply-To: Chris Gautschi
X-Original-Return-Path: Chris Gautschi
To: cdcbaa@yahoogroups.com
X-Yahoo-Newman-Id: groups-system
Only loonies support conduit payments.
Sent from my iPhone
> On Sep 19, 2015, at 2:31 PM, easky1@yahoo.com [cdcbaa] wrote:
>
> Hello Everyone:
>
> Today we had three panel members telling us to support conduit payments of mortgages in ch 13's. I tried to ask a question to get a reason why and was told I was too slow to get it, that the trustee's fees would come down to 3%, and it would be cheaper, but here is the math:
>
> Suppose your client's mortgage payment is $3,000 per month, and with late charges, etc, the client is $20k behind and needs a 13.
>
> $20,000 x 10% is all the trustee's fees in our current system, cost $2,000.00 ($3,500.00 if your entire attorneys fees were in the plan.)
>
> With conduit payments, the entire 60 months of payments would go through the trustee, $180,000.00, plus the arrears payments, $20,000.00, total $200,000.00. Even with a 3% fee from the trustee, the trustees fees would be $6,000.00. ($7,500 if you add atty fees)
>
> I don't know why Ms. Porter just insulted me to quiet my question, but $6,000 is a greater cost than the $2,000 without a conduit.
>
> In fact, the dollars would only turn around to be positive for the debtor if the debtor had $120,000, more that had to be paid through the trustee.
>
> Don't support conduit payments.
>
> Dennis
>
>
>
>
The post was migrated from Yahoo.
X-Original-Return-Path: Chris Gautschi
To: cdcbaa@yahoogroups.com
X-Yahoo-Newman-Id: groups-system
Only loonies support conduit payments.
Sent from my iPhone
> On Sep 19, 2015, at 2:31 PM, easky1@yahoo.com [cdcbaa] wrote:
>
> Hello Everyone:
>
> Today we had three panel members telling us to support conduit payments of mortgages in ch 13's. I tried to ask a question to get a reason why and was told I was too slow to get it, that the trustee's fees would come down to 3%, and it would be cheaper, but here is the math:
>
> Suppose your client's mortgage payment is $3,000 per month, and with late charges, etc, the client is $20k behind and needs a 13.
>
> $20,000 x 10% is all the trustee's fees in our current system, cost $2,000.00 ($3,500.00 if your entire attorneys fees were in the plan.)
>
> With conduit payments, the entire 60 months of payments would go through the trustee, $180,000.00, plus the arrears payments, $20,000.00, total $200,000.00. Even with a 3% fee from the trustee, the trustees fees would be $6,000.00. ($7,500 if you add atty fees)
>
> I don't know why Ms. Porter just insulted me to quiet my question, but $6,000 is a greater cost than the $2,000 without a conduit.
>
> In fact, the dollars would only turn around to be positive for the debtor if the debtor had $120,000, more that had to be paid through the trustee.
>
> Don't support conduit payments.
>
> Dennis
>
>
>
>
The post was migrated from Yahoo.
Reply-To: ssoesq@aol.com
X-Original-Return-Path: ssoesq@aol.com
To: cdcbaa@yahoogroups.com
X-Yahoo-Newman-Id: groups-system
Hi Dennis,
I think they were trying to express that over time, the % to trustees will
be significantly less so in your hypothetical, the percentage would be
closer to 1% (or $2,000) which is the same amount as paying out the 10% on the
$20,000 plan.
If they are already cutting a check, then it makes little difference if the
check is for the monthly payment plus the arrears or the arrears, and
overall, it will save attorneys from having to deal with relief from stay based
on missed payments.
Back in the day, when mortgage payments were paid through the trustees, I
don't believe they counted it toward the overall plan payment and/or took
their fee, but merely noted the payment and mailed it on. At least that is my
recollection. I don't believe the deposited in the overall plan funds.
What the panel (not our moderator) seemed to convey is that chapter 13
process should only be available for cookie-cutter paycheck debtors who could
get earnings withholding order, had stable income, and could make
verifiable regular monthly payments which could be locked in for the life of the
plan.
For most of us who are in the trenches, the filing is often a decision
based on projections, support/contributions from family members, avoiding the
risks in chapter 7, and where the Debtor recognizes/ understands that if
they want to remain in chapter 13, they have to make their monthly plan
payments. This avoids the fact that some times, the filing is a decision (a
serious and costly one) to achieve a shorter term goal where a lender hasn't
confirmed a continued trustee sale date, or to provide a limited amount of
relief for Debtors who are now facing reality about their financial
conditions about their housing situation and recognize that something has to give,
ie, making more income or cutting down on expenses.
What is left is a chess game as to how the creditor's react (relief from
stay, loan modification, adversaries) which will then govern what Debtor's
next move is... surrender the property, amend the plan, relocate/downsize,
etc.
It is a lot of work. I am still thinking about the no-look fee or not
allowing any advance payments. I don't think that many practitioners
could/would do that but, I believe, would avoid the non-regulars who are filing
cases and don't know that they are doing (and will never get a plan
confirmed).
My practice sees more of the complicated cases, and while I am usually paid
in full prior to filing, often seek approval (without payment) of
additional fees when the plan/funds will allow it, but I never chase clients or
allow fees to interfere with a Debtor's plan and regularly write-off the
balance.
I regularly will bet (with myself) that the plan will be approved, and
will take fees through the plan, if needed, but I like to think I know what I
am doing (and without guaranteeing any results), don't want to be put in a
position adverse to the client because a tax claim came in higher and now my
fees aren't going to be paid.
It was still a GREAT event, entertaining - a little direct, but real (and
real issues).
Very truly yours,
Shai Oved
The Law Offices of Shai Oved
7445 Topanga Cyn. Blvd., Suite 220
_Canoga Park, California 91303_ (x-apple-data-detectors://2/0)
Tel: _(818) 992-6588_ (tel:(818)%20992-6588)
Fax: _(818) 992-6511_ (tel:(818)%20992-6511)
Email: _ssoesq@aol.com _ (mailto:ssoesq@aol.com) _www.shaioved.com_
(http://www.shaioved.com/)
________________
The information contained in this email is intended only for the
individual or entity named above and may contain attorney privileged and
confidential information. If the reader of this message is not the intended recipient,
you are hereby notified that any dissemination, distribution, or copy of
this communication is strictly prohibited. If you received this
communication in error, please immediately notify us by the telephone number above and
return any hard copies to us via the postal service. The Law Offices of
Shai Oved is a debt relief agency which helps people file for bankruptcy under
the Bankruptcy Code. Shai Oved is a Certified Bankruptcy Law Specialist by
The State Bar of California Board of Legal Specialization.
In a message dated 9/19/2015 2:31:13 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
Hello Everyone:
Today we had three panel members telling us to support conduit payments of
mortgages in ch 13's. I tried to ask a question to get a reason why and
was told I was too slow to get it, that the trustee's fees would come down
to 3%, and it would be cheaper, but here is the math:
Suppose your client's mortgage payment is $3,000 per month, and with late
charges, etc, the client is $20k behind and needs a 13.
$20,000 x 10% is all the trustee's fees in our current system, cost
$2,000.00 ($3,500.00 if your entire attorneys fees were in the plan.)
With conduit payments, the entire 60 months of payments would go through
the trustee, $180,000.00, plus the arrears payments, $20,000.00, total
$200,000.00. Even with a 3% fee from the trustee, the trustees fees would be
$6,000.00. ($7,500 if you add atty fees)
I don't know why Ms. Porter just insulted me to quiet my question, but
$6,000 is a greater cost than the $2,000 without a conduit.
In fact, the dollars would only turn around to be positive for the debtor
if the debtor had $120,000, more that had to be paid through the trustee.
Don't support conduit payments.
Dennis
Hi Dennis,
I think they were trying to express that over time, the % to trustees will
be significantly less so in your hypothetical, the percentage would be closer to
1% (or $2,000) which is the same amount as paying out the 10% on the $20,000
plan.
If they are already cutting a check, then it makes little difference if the
check is for the monthly payment plus the arrears or the arrears, and overall,
it will save attorneys from having to deal with relief from stay based on missed
payments.
Back in the day, when mortgage payments were paid through the trustees, I
don't believe they counted it toward the overall plan payment and/or took their
fee, but merely noted the payment and mailed it on. At least that is my
recollection. I don't believe the deposited in the overall plan
funds.
What the panel (not our moderator) seemed to convey is that chapter
13 process should only be available for cookie-cutter paycheck debtors
who could get earnings withholding order, had stable income, and could make
verifiable regular monthly payments which could be locked in for the life of the
plan.
For most of us who are in the trenches, the filing is often a decision
based on projections, support/contributions from family members, avoiding the
risks in chapter 7, and where the Debtor recognizes/ understands that if
they want to remain in chapter 13, they have to make their monthly plan
payments. This avoids the fact that some times, the filing is a decision
(a serious and costly one) to achieve a shorter term goal where a lender hasn't
confirmed a continued trustee sale date, or to provide a limited amount of
relief for Debtors who are now facing reality about their financial conditions
about their housing situation and recognize that something has to give, ie,
making more income or cutting down on expenses.
What is left is a chess game as to how the creditor's react (relief from
stay, loan modification, adversaries) which will then govern what Debtor's next
move is... surrender the property, amend the plan, relocate/downsize, etc.
It is a lot of work. I am still thinking about the no-look fee or not
allowing any advance payments. I don't think that many
practitioners could/would do that but, I believe, would avoid the
non-regulars who are filing cases and don't know that they are doing (and will
never get a plan confirmed).
My practice sees more of the complicated cases, and while I am usually paid
in full prior to filing, often seek approval (without payment) of
additional fees when the plan/funds will allow it, but I never chase clients
or allow fees to interfere with a Debtor's plan and regularly write-off the
balance.
I regularly will bet (with myself) that the plan will be approved, and
will take fees through the plan, if needed, but I like to think I know what I am
doing (and without guaranteeing any results), don't want to be put in a position
adverse to the client because a tax claim came in higher and now my fees aren't
going to be paid.
It was still a GREAT event, entertaining - a little direct, but
real (and real issues).
Very truly yours,Shai OvedThe Law Offices of Shai Oved7445
Topanga Cyn. Blvd., Suite 220Canoga
Park, California 91303Tel: (818)
992-6588Fax: (818) 992-6511Email:
ssoesq@aol.com
The post was migrated from Yahoo.
X-Original-Return-Path: ssoesq@aol.com
To: cdcbaa@yahoogroups.com
X-Yahoo-Newman-Id: groups-system
Hi Dennis,
I think they were trying to express that over time, the % to trustees will
be significantly less so in your hypothetical, the percentage would be
closer to 1% (or $2,000) which is the same amount as paying out the 10% on the
$20,000 plan.
If they are already cutting a check, then it makes little difference if the
check is for the monthly payment plus the arrears or the arrears, and
overall, it will save attorneys from having to deal with relief from stay based
on missed payments.
Back in the day, when mortgage payments were paid through the trustees, I
don't believe they counted it toward the overall plan payment and/or took
their fee, but merely noted the payment and mailed it on. At least that is my
recollection. I don't believe the deposited in the overall plan funds.
What the panel (not our moderator) seemed to convey is that chapter 13
process should only be available for cookie-cutter paycheck debtors who could
get earnings withholding order, had stable income, and could make
verifiable regular monthly payments which could be locked in for the life of the
plan.
For most of us who are in the trenches, the filing is often a decision
based on projections, support/contributions from family members, avoiding the
risks in chapter 7, and where the Debtor recognizes/ understands that if
they want to remain in chapter 13, they have to make their monthly plan
payments. This avoids the fact that some times, the filing is a decision (a
serious and costly one) to achieve a shorter term goal where a lender hasn't
confirmed a continued trustee sale date, or to provide a limited amount of
relief for Debtors who are now facing reality about their financial
conditions about their housing situation and recognize that something has to give,
ie, making more income or cutting down on expenses.
What is left is a chess game as to how the creditor's react (relief from
stay, loan modification, adversaries) which will then govern what Debtor's
next move is... surrender the property, amend the plan, relocate/downsize,
etc.
It is a lot of work. I am still thinking about the no-look fee or not
allowing any advance payments. I don't think that many practitioners
could/would do that but, I believe, would avoid the non-regulars who are filing
cases and don't know that they are doing (and will never get a plan
confirmed).
My practice sees more of the complicated cases, and while I am usually paid
in full prior to filing, often seek approval (without payment) of
additional fees when the plan/funds will allow it, but I never chase clients or
allow fees to interfere with a Debtor's plan and regularly write-off the
balance.
I regularly will bet (with myself) that the plan will be approved, and
will take fees through the plan, if needed, but I like to think I know what I
am doing (and without guaranteeing any results), don't want to be put in a
position adverse to the client because a tax claim came in higher and now my
fees aren't going to be paid.
It was still a GREAT event, entertaining - a little direct, but real (and
real issues).
Very truly yours,
Shai Oved
The Law Offices of Shai Oved
7445 Topanga Cyn. Blvd., Suite 220
_Canoga Park, California 91303_ (x-apple-data-detectors://2/0)
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In a message dated 9/19/2015 2:31:13 P.M. Pacific Daylight Time,
cdcbaa@yahoogroups.com writes:
Hello Everyone:
Today we had three panel members telling us to support conduit payments of
mortgages in ch 13's. I tried to ask a question to get a reason why and
was told I was too slow to get it, that the trustee's fees would come down
to 3%, and it would be cheaper, but here is the math:
Suppose your client's mortgage payment is $3,000 per month, and with late
charges, etc, the client is $20k behind and needs a 13.
$20,000 x 10% is all the trustee's fees in our current system, cost
$2,000.00 ($3,500.00 if your entire attorneys fees were in the plan.)
With conduit payments, the entire 60 months of payments would go through
the trustee, $180,000.00, plus the arrears payments, $20,000.00, total
$200,000.00. Even with a 3% fee from the trustee, the trustees fees would be
$6,000.00. ($7,500 if you add atty fees)
I don't know why Ms. Porter just insulted me to quiet my question, but
$6,000 is a greater cost than the $2,000 without a conduit.
In fact, the dollars would only turn around to be positive for the debtor
if the debtor had $120,000, more that had to be paid through the trustee.
Don't support conduit payments.
Dennis
Hi Dennis,
I think they were trying to express that over time, the % to trustees will
be significantly less so in your hypothetical, the percentage would be closer to
1% (or $2,000) which is the same amount as paying out the 10% on the $20,000
plan.
If they are already cutting a check, then it makes little difference if the
check is for the monthly payment plus the arrears or the arrears, and overall,
it will save attorneys from having to deal with relief from stay based on missed
payments.
Back in the day, when mortgage payments were paid through the trustees, I
don't believe they counted it toward the overall plan payment and/or took their
fee, but merely noted the payment and mailed it on. At least that is my
recollection. I don't believe the deposited in the overall plan
funds.
What the panel (not our moderator) seemed to convey is that chapter
13 process should only be available for cookie-cutter paycheck debtors
who could get earnings withholding order, had stable income, and could make
verifiable regular monthly payments which could be locked in for the life of the
plan.
For most of us who are in the trenches, the filing is often a decision
based on projections, support/contributions from family members, avoiding the
risks in chapter 7, and where the Debtor recognizes/ understands that if
they want to remain in chapter 13, they have to make their monthly plan
payments. This avoids the fact that some times, the filing is a decision
(a serious and costly one) to achieve a shorter term goal where a lender hasn't
confirmed a continued trustee sale date, or to provide a limited amount of
relief for Debtors who are now facing reality about their financial conditions
about their housing situation and recognize that something has to give, ie,
making more income or cutting down on expenses.
What is left is a chess game as to how the creditor's react (relief from
stay, loan modification, adversaries) which will then govern what Debtor's next
move is... surrender the property, amend the plan, relocate/downsize, etc.
It is a lot of work. I am still thinking about the no-look fee or not
allowing any advance payments. I don't think that many
practitioners could/would do that but, I believe, would avoid the
non-regulars who are filing cases and don't know that they are doing (and will
never get a plan confirmed).
My practice sees more of the complicated cases, and while I am usually paid
in full prior to filing, often seek approval (without payment) of
additional fees when the plan/funds will allow it, but I never chase clients
or allow fees to interfere with a Debtor's plan and regularly write-off the
balance.
I regularly will bet (with myself) that the plan will be approved, and
will take fees through the plan, if needed, but I like to think I know what I am
doing (and without guaranteeing any results), don't want to be put in a position
adverse to the client because a tax claim came in higher and now my fees aren't
going to be paid.
It was still a GREAT event, entertaining - a little direct, but
real (and real issues).
Very truly yours,Shai OvedThe Law Offices of Shai Oved7445
Topanga Cyn. Blvd., Suite 220Canoga
Park, California 91303Tel: (818)
992-6588Fax: (818) 992-6511Email:
ssoesq@aol.com
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