Chapter 13 Bonus question

[Prosper]

I have a strange question that I can't find the answer to.

Lets say you are filing chapter 13 and you have 30k to pay off. But you only have about 200 a month in disposable income each month, but once a year you get a bonus for 10k.

Could you get a plan with 200 a month and giving up your bonus and pay it off in 3 years.

[dmc-2008]

I am not sure I understand your questin but my question to you is this: why would you ruin your credit for 7 years if your can pay off your debt by applying all of your bonus to it and be done with it in three years? 10k x 3 = 30k.

[despritfreya]

Not enough info. . . Let’s start with. . .

1. Is your base Plan $30k or does that pay 100% of all allowed claims, including trustee’s fees and your attny (if you have one)?

2. Were you above or below median income when you filed?

3. Did you disclose your entitlement to annual bonuses?

Des.

[Prosper]

The plan would pay out 100 percent, above median income and the bonus has been disclosed. This BK would happen to catch up on mortgage payments.

[despritfreya]

If your Plan is paying 100% it ends when 100% is paid. However, I agree with DMC - makes no sense to file over $30k unless you are about to lose the home to a foreclosure and cannot work it out with the lender. Please note, when you file bk you list ALL debt, not just the mortgage arrears. I am assuming the $30k includes any other debt you may have such as credit cards, car loans, personal loans, medical bills, etc. If not, then how much do you really owe?

Des.

[Prosper]

Its 30k total, 20k of that is back mortgage payments and working with the bank has been impossible.

[despritfreya]

Its 30k total, 20k of that is back mortgage payments and working with the bank has been impossible.

I did not specifically answer your question. . .

Yes, you can provide for payments structured as follows:

$200.00 per month for months 1 through 11
$10,200.00 for month 12
$200.00 per month for months 13 through 23
$10,200.00 for month 24. . .

or any combination of the above over the estimated 36 months. It doesn't really matter in a 100% plan in most jurisdictions.

Please note - the monthly balloon needs to be a net bonus amount and your Plan will simply end once you have paid enough to cover all allowed claims in full which could be less than 36 months - the sooner the better so the more you can pay in over a shorter period of time the better, in my opinion.

Good luck and keep us posted.

Des.

[naper]

I'm in a similar situation in a 100% plan. I was planning on just banking my bonus each year and when I saved up enough, request a payoff of the plan. You have to be pretty disciplined to do that though, for some it may make sense just to pay it when you get it. When you are in a 100% plan they seem to be really flexible with you, at least they are in my jurisdiction.

[Prosper]

I was thinking the same thing too, after 2 bonus payments then paying the whole thing off.