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One of the more frequent disputes in Chapter 13 plans arises because of administrative delay.
Balances owed for student loans are notoriously difficult to obtain. Apparently, once a
provider of student loan contacts the Federal Government regarding it's
guarantee of payment, months pass before all late charges and assessments are added. Then, after confirmation of
Chapter 13 bankruptcy, student loans, modifications, and updated balances must be included to
prevent the Court from granting creditor objections to the amount owed. In practice, Chapter 13
lawyers know from experience that the correct amount owed is impossible to obtain in a timely
fashion from lenders.
During this wait period, an estimate for balances owed is used. Most
often a Chapter 13 bankruptcy attorney estimates the balance based on
documentation available, inception date, and current payment amount. If
subsequent modification is required, a motion must be filed requesting
modification, which affects the distribution to all other creditors
included in the plan.
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