Chapter 13 Question

[bsat873]

So my attorney told me my total debt is 100k (including cars that will be paid off within 2 years) and my monthly payment would be $1100. He also told me that the remainder is our (my families) and doesn't change.

Say I'm making 90k a year now, 95k next year, 100k next, then 105k and 110k will my payment change? Based on reading it sound like a lot of people don't have much to live on but after the worksheet he said I should have ~2k a month spending money which is about what we use now. Just need someone to explain it in a little more detail.

[LadyInTheRed]

It depends on your plan and your court or trustee. Some trustees require that you send a copy of your tax return every year and if they see a significant increase, they will insist your plan payment be increased. In some courts, you must report an increase over a certain amount. Some trustees don't go after pay increases. This is a question that only your attorney can answer.

[bsat873]

Thanks for the response!

[tissa]

Our Lawyer said sometimes the trustee will increase your payment because he thinks you have too much extra money even if this means your creditors will be paid off sooner. My plan right now has a payment of $1150 and I'm paying 100% so since I have the extra money my Lawyer said I can continue to put money into my 401k but she warned us that the trustee may say that money should go to the creditors and if that happens our debt will be paid off sooner than 5 years.

[justbroke]

tissa I'm sorry, but the Trustee can't make you pay "more" because you have more "disposable monthly income" (DMI) when you're in a 100% plan. It's pretty well settled law at this point. There were a lot of cases back in 2005 through about 2009 on this topic. It was interest back then because the law had just changed in October 2005 under the BAPCPA. After the BAPCPA many Trustees tried to claim that you had to pay your actual DMI regardless of whether you were paying 100%. However, it is very clear that the code was not written that way and I believe every Bankruptcy Appellate Panel (BAP) and every District review and every Circuit Appellate review has determined that a debtor in a 100% plan does NOT have to pay his/her DMI into the plan. Except, maybe, in the narrow case where the debtor's DMI just barely puts them into a 100% plan.

[tissa]

Good to know, our lawyer did say it was unlikely so its possible she's basing it off of the controversy that happened back during the time period you mentioned. We're in the Southern District of California. Our meeting of the creditors is in around 3 weeks so I'll let everyone know what happens. From the budget we did with our lawyer we have about $700 or so more DMI than the monthly payment that we need to be in a 100% plan. Really it was the credit card interest that made me decide to do this the interest on our cards was outrageous!!

[jmac]

I wouldn't be too worried about making extra money and more worried about them wanting the car payment money when they are payed off unless you are in a 100% plan then it don't matter. I pretty much have unlimited overtime at work but didn't work anyone my first year in plan worrying about making too much, after that i just figured what the hell I'm going too make some money and never heard a word.

[out4good3]

jmac

You're doing a variation of what I am doing.

I'm 10 months from closing out a 100% plan.