Administrative Increase of Dividend

IN A CHAPTER 13, ADMINISTRATIVE INCREASE OF PERCENTAGE DIVIDEND TO ALLOWED NONPRIORITY UNSECURED CREDITORS TO ENSURE PLAN COMPLIES WITH 1325(b)1)(B).

A Nonstandard Provision can be included in the Plan (section 8.1) authorizing the Trustee to administratively adjust the dividend payable to nonpriority unsecured creditors?

Typically, a Chapter 13 is filed with a percentage dividend payable to nonpriority unsecured creditors which is based on the estimated debts and balances provided by the Debtor. Often, claims come in higher than expected, unlisted creditors file, or listed creditors do not timely file. As a result, it is necessary for the dividend to be increased. Neither debtor’s counsel nor Debtor will object because it does not impact the payment.

In such cases, there is no impact on secured creditors and unsecured creditors do not object because they are receiving a larger part of their claim.