GENERAL PLAN CONCERNS. One or more of the following concerns are relevant to the generation of a PPS or Final Plan. The Trustee has listed these items in an effort to develop plans, which are feasible and uncontested.
A. Valuation.
The Trustee requires that prior to the § 341 Meeting of Creditors, the Debtor's Attorney confer with any secured creditor (or its attorney) which has the terms of its obligation altered by the plan through a cram down provision. See 11 U.S.C. § 1325(a)(5). A stipulation or agreement on value and interest rate will avoid the necessity of a hearing on valuation. A Motion for Valuation is included with all Final Plans and is set for the same date as confirmation of the Final Plan.
B. Interest Rates.
The interest rate to be applied to any secured debt which is modified by the plan will be the annual percentage rate in the contract, unless otherwise agreed.
C. Minimal Payment or "Deep Composition Plans".
The following factors are suggested as relevant in determining the sufficiency of the Debtor's repayment effort if less than 70% is expected to be paid to unsecured creditors:
Earning potential and income from all sources.
Expense Budget.
Plan Duration.
Are there any debts which would be non-dischargeable in a Chapter 7 case?
Age of the debts.
How the debt problem arose.
Age of the Debtors.
Extent and use of "cram down" provisions on secured creditors.
Frequency of relief under the Bankruptcy Code.
Total amount of debt.
Classification of claims including preferential treatment of creditors.
Accuracy and detail of financial disclosures.
Use of exemptions.
Toys and recreation.
Motivation and sincerity.
Equity or fundamental fairness (i.e. is the Debtor manipulating or abusing the statute?)
Difficulty of administering the Plan.
Contributions and Donations.
D. Plans Generally Opposed by the Trustee.
Plans which do not dedicate all of the Debtor’s net disposable income to the plan payment.
Plans of Debtors who exaggerate the normal living expenses or deliberately understate the amount of take-home pay.
Plans that provide for direct payment by the Debtors of claims by creditors, except for current mortgage payments.
Plans which do not comply with 11 U.S.C. § 1322 and or standards of confirmation under § 1325(a).
Plans which pay less than 100% to unsecured creditors while paying for luxury or unnecessary items (i.e., boats, cabins, raw land, etc.).
Plans by individuals who have failed to disclose all of their assets and liabilities, and otherwise have provided inaccurate or false statements in their Statement of Affairs.
Plans that have child support arrears that pay direct should have a state court order, otherwise the arrears should be paid through the plan.
Plans that provide payment for unassessed liability claims of the Internal Revenue Service.
