My question involves bankruptcy in the state of: NJ
We filed a lawsuit back in 2004 against our home builder for defects found in our home . 3 years later we entered into a ch13 plan. At the time of filing for ch13 we did not disclose the lawsuit.
We simply did not think anything would come out of the lawsuit and forgot about it. Now we are 46 months in on a 60 month ch13 plan. The builder has offered and we accepted a settlement in the amount of $18,000 dollars. After lawyer fees and expenses we will receive appx. $11,000. I contacted the trustee's office to disclose the settlement and obtain info on how to proceed. My expectation is that they would take the money and apply to our outstanding balance in the ch13 plan - shortening our payments. I spoke with a paralegal at the trustees office today and she said it may not work that way. She said we are in the part of the ch.13 where only unsecured deb t remains and they may take the money and pay other unsecured debt. I asked how could it not shorten teh payments - we cannot pay over the ch13 settlement amount, correct? At that point she said she would have to check with the attorney and will ccall me tomorrow (he is in court today). My question is there any way possible the trustee could take this money and not apply to my ch 13 balance and shorten my payments?

