Opinion ID: 2653399
Heading Depth: 2
Heading Rank: 2

Heading: Brown’s Chapter 13 Reorganization Plan

Text: Brown proposed a Chapter 13 reorganization plan to span three years. The plan called for Brown to make monthly payments of $150 for 36 months, for a total of $5,400. At oral argument, the parties confirmed that from this $5,400 amount, Brown would pay: (1) $2,000 to his attorney in attorney’s fees; (2) $281 to the bankruptcy court as a filing fee; (3) $50 to his attorney to cover Brown’s required credit counseling; (3) $20 to his attorney to purchase a credit report; and (4) 4.5 percent of each $150 payment as the Chapter 13 trustee’s commission. 1 Additionally, Brown reported that he had sent unspecified claim notices to three other creditors: (1) Jon Barry & Associates; (2) Riverview RMC; and (3) Rural Metro Ambulance. 3 Case: 13-10260 Date Filed: 02/14/2014 Page: 4 of 23 Brown’s 36-month plan proposed to pay all attorney’s fees and administrative expenses before any distributions to creditors. It would take 17 months of $150 payments by Brown to pay the attorney’s fees and administrative costs. 2 The creditors would have to wait almost 17 months before getting their first dollars. Even assuming Brown completed his plan, the scheduled creditors collectively would receive $2,806, which was only 17 percent of the $16,203 Brown owed. Brown proposed his plan on November 4, 2011, before the deadline for the scheduled creditors to file proofs of claim. However, as the bankruptcy court later noted in denying confirmation, only three creditors ended up filing claims within the deadline, in amounts of $501.50, $489.46, and $364.12, for a total of $1,355.08. Therefore, Brown would pay $2,000 to his attorney and $1,355.08 to creditors under the plan. The bankruptcy court speculated that few “creditors bothered to file claims perhaps because the likelihood of any meaningful payments was not feasible” under Brown’s meagre budget, and any “distribution from the trustee will be of little consequence.”