CH13 100% Repayment - Payment Calculation

[justbroke]

The program I mentioned, performs this calculation as well. But it's a really complex program and that number is buried somewhere, but its there. That doesn't make the case any easier. The program won't help at all with exemptions, except perform all the mathematical calculations once you enter all the details.

[Ready2BDone]

That makes sense. I'm going to do some research on exemptions for my state and download the software. I'll see what I come up with. I can't thank you enough for all of the information!

[anunezal]

Sorry but I get confused with all the discussions here. In the title of the message says "Chapter 13, 100% repayment" . I am in same situation, and the math was quite simple. As I paying all my debts 100%, I just add all my debts plus attorney fee, then multiple by 10% (Trustee fee) then divide by 60. My DMI is not part of the equation.

for me, my only troubles is the Trustee wants may tax refunds and part of my bonuses. That is ok, as it will shorten the 60 months to something around 50 months.

But for 100%, I think the math is pretty simple. Please correct me in what I am seeing wrong here.

[Ready2BDone]

anunezal I think part of the issue in my case is that I am filing and my spouse is not. So a marital adjustment comes into play that makes my DMI lower than the payment that would be calculated using the formula you have noted in your post. In my case, there have been amendments. While the DMI that was originally submitted is higher than the proposed plan payment, the correct DMI is lower. There's also the component of debts (both joint and just my spouse's) that are being paid outside of the plan since he is a non-filer.

I don't know that my payment is for sure wrong, but the case has had enough twists and turns to make it more complicated than I'm comfortable with.

Maybe justbroke will chime in to clarify. I'm pretty new to all of this and am thoroughly confused most of the time. hahaha

[anunezal]

Hi Ready2BDone , I am also married, and filing alone. So, my wife income is used for the DMI. But again, it doesn't matter, as I am paying 100%, so I am paying all my debts 100%. I guess for you, you are trying to pay your DMI that will result in less than 100%, am I correct?

[Ready2BDone]

anunezal I'm not really trying to pay one amount or another, but rather trying to make sure what I am committing to is accurate. My plan involves step payments ranging from $1300-2400 and each payment amount is already higher than the DMI that is outlined in my forms. What do you mean your wife's income is used for the DMI? Did they not use both incomes?

I was under the impression that the DMI reflected what we had leftover each month and since we are in 100% repayment, that all of that amount would go towards the plan. It has been difficult for me to understand why a payment would be so much higher than the DMI. For instance, if I owed $500,000 in debt but only made $100k a year, I would still blow the means test out of the water, but no way could I afford a plan payment of $8300. I guess I'm more interested in knowing...in a 100% repayment at what point do they decide the payment is too high to be sustainable if they aren't using the DMI?

That being said, I thought that they would take the DMI and multiply by 60 and that is what would be paid into the plan with anything above that being discharged. I read this here https://www.nolo.com/legal-encyclope...ankruptcy.html under example 1.

[anunezal]

Ready2BDone . From my DMI, I used both mine and my wife's income. So as the DMI is bigger than my debt/60, I am in 100% repayment plan, 100% repayment plan means paying all your debt. I think what you meant 100% of your DMI, not 100% of your debt. Unless you are in 100% repayment plant, everybody pays all (100%) of their DMI.

Unfortunately, as it was answered before, if your assets are big, then you will need to pay more than your DMI. As if you liquidate your assets.

[Ready2BDone]

I received confirmation from my attorney today that we do not need to worry about the "CH7 Liquidation Test" as he stated we do not have any non-exempt assets. So I do not believe that is a factor.

What I think the issue is with my current case, is the trustee is using the DMI of $1800 which doesn't take into account the monthly payment for my spouse's debt. Once the statements were given, that lowered the DMI to $1100. Our current payment is lower than the original DMI, but well over the amended DMI. We are currently paying 100% of both (debt and amended DMI as my plan payment does cover all of the debt). The trustee has objected to using the amended DMI, even though documentation was provided.

So if I'm understanding you correctly, if my DMI is HIGHER than my debt/60, I would pay the monthly amount of my debt/60. If my DMI is LOWER than my debt/60, then I would pay the amount of my DMI and any debt above that amount is wiped clean?

[justbroke]

I received confirmation from my attorney today that we do not need to worry about the "CH7 Liquidation Test" as he stated we do not have any non-exempt assets. So I do not believe that is a factor.

That's good that you don't need to worry about that portion.

What I think the issue is with my current case, is the trustee is using the DMI of $1800 which doesn't take into account the monthly payment for my spouse's debt. Once the statements were given, that lowered the DMI to $1100. Our current payment is lower than the original DMI, but well over the amended DMI. We are currently paying 100% of both (debt and amended DMI). The trustee has objected to using the amended DMI, even though documentation was provided.

They can object and your attorney can keep insisting that the martial adjustment is valid. It will eventually go to a confirmation hearing.

[flashoflight]

I'm confused by this thread.

If the original DMI is 100% payback with no non-exempt property, reducing the DMI means it is no longer 100% payback. <100% payback is going to draw a lot more scrutiny from the trustee even without the married filing solely scenario. <100% is nitpicky city. 100% = chill trustee.

As JB already mentioned, credit card statements are not sufficient to justify the marital adjustment. You need to prove the charges weren't double-counted in household expenses. For example, a Newegg charge is suspect because they sell gift cards that can be used for household expenses. Home Depot and grocery store charges are highly likely household expenses. Thus, you need to show receipts. Judges and trustees know each other very well and you haven't provided enough proof. No wonder your lawyer is having a hard time. It's your job to help him with more proof. I think if you let this go to the judge, you won't like the result.

[Ready2BDone]

flashoflight yes, the original DMI amount is higher than the payment required to pay 100% of the claims filed. The amended DMI would not pay all of the claims in full. Maybe I can put the chain of events out here in hopes of clarity on what I'm missing.

When the case was originally filed, we just went with a low-ball payment pending claims being filed. I was told that is normal. After the claim deadline passed, an amended plan (this is also where the amended schedules were filed showing the correct DMI) was filed for $1200/mo which would pay 100%. Joint debts were not included and this payment was higher than the amended DMI, but was doable. The trustee objected saying that a higher plan payment could be supported. I was confused, since we were paying 100% of the claims. So my attorney said that trustee wanted the joint debts included. So an amended plan was filed with step payments. This was fine, since I was no longer paying the joint debts. The trustee objected again stating that the marital adjustment included the payments for the joint debts, which was incorrect (and I had told my attorney this multiple times). After talking with the trustee, my attorney thought there was a clerical error and another amendment was filed based on whatever their conversation was. The trustee has now objected stating that the plan offers to pay the joint debts, but that Schedule J budgets $1100 for those same debts (referencing the marital adjustment again). Another amendment was just filed removing the joint debts, but still paying in the same amount as when we included the joint debts. The step payments haven't changed. My issue in all of this is, that my plan payment was increased to allow payment toward these joint debts. Now I am back to paying those outside the plan, but my plan payment wasn't lowered back to where it was. Its apparent that there were some math issues from the beginning.

To be fair, I didn't go to law school for any of this and the only thing my attorney asked for was the credit card statements. I don't know the ins and outs of this...at all. What additional receipts would I provide when the statements show that the cards are not being used...multiple months of statements? We are thinking of switching to a joint filing. I don't want to make my situation worse, however...which is why I'm trying to understand this so I can get an idea of what our plan payment would be BEFORE I make the move to re-file jointly. I can see where it would be more cut and dry if we filed jointly. Its being stuck with a payment that exceeds what our finances allow that scares me.

Is the below statement accurate? I understand that there is a tango that is done to calculate the exact payment. I'm just trying to understand at what point the DMI matters (if at all)?

So if I'm understanding you correctly, if my DMI is HIGHER than my debt/60, I would pay the monthly amount of my debt/60. If my DMI is LOWER than my debt/60, then I would pay the amount of my DMI and any debt above that amount is wiped clean?

[justbroke]

flashoflight yes, the original DMI amount is higher than the payment required to pay 100% of the claims filed. The amended DMI would not pay all of the claims in full. Maybe I can put the chain of events out here in hopes of clarity on what I'm missing.

Very interesting and I'm glad flashoflight caught the specific reason. I was concentrating on the amendment and reduction, but didn't realize that the new Means Test showed that you were no longer a 100% plan. When a Trustee sees that, they think you're trying to "not" pay 100%.

When the case was originally filed, we just went with a low-ball payment pending claims being filed. I was told that is normal. After the claim deadline passed, an amended plan (this is also where the amended schedules were filed showing the correct DMI) was filed for $1200/mo which would pay 100%.

This is a pet peave of mine. If you're in a 100% plan then your DMI doesn't matter. You pay 100% divided by the length of your plan (typically 60 months). So if you have $60,000 in unsecured debt, then the (minimum) plan payment is $1,000/month.

Is the below statement accurate? I understand that there is a tango that is done to calculate the exact payment. I'm just trying to understand at what point the DMI matters (if at all)?

So if I'm understanding you correctly, if my DMI is HIGHER than my debt/60, I would pay the monthly amount of my debt/60. If my DMI is LOWER than my debt/60, then I would pay the amount of my DMI and any debt above that amount is wiped clean?

Exactly.

[Ready2BDone]

Ok, so this is starting to make sense. By our income, we would be in a 100% plan...no doubt about it.

So if we file jointly and our debt/60 is $4000/mo, but our DMI is $2000, we would pay $2000/mo for the 60 months?

Conversely, if our debt/60 is $4000 but our DMI is $6000, then we would pay at least $4000/mo for the 60 months?

I completely understand where a trustee would think I was just trying not to pay 100%, but that honestly isn't the case here. Based on the objections, it seems like they are more hung up on thinking that the joint debts are included in the marital adjustment when they were not.

At any rate, if the scenarios I described are accurate representations of how this would work, then I think we will go ahead and file jointly to avoid the confusion about the joint debts and such.

[justbroke]

So if we file jointly and our debt/60 is $4000/mo, but our DMI is $2000, we would pay $2000/mo for the 60 months?

That is what you should pay. That would not be a 100% plan as you don't have enough to fund a 100% plan.

Conversely, if our debt/60 is $4000 but our DMI is $6000, then we would pay at least $4000/mo for the 60 months?

Please know that some Chapter 13 Trustees, and unfortunately some debtor attorneys, will suggest that you pay DMI. Never do that! If you want to pay a little more by making a lump payment once a year, after you have a good 6-month emergency fund, go ahead. This will let you pay it off earlier without the need to, in case of emergency, ask permission to suspend payments because you have an issue. So fight hard to only pay what's "required" to meet the 60 month payoff.

I completely understand where a trustee would think I was just trying not to pay 100%, but that honestly isn't the case here. Based on the objections, it seems like they are more hung up on thinking that the joint debts are included in the marital adjustment when they were not.

That is likely the case.

At any rate, if the scenarios I described are accurate representations of how this would work, then I think we will go ahead and file jointly to avoid the confusion about the joint debts and such.

At least have your attorney run the numbers to see the impact.

[Ready2BDone]

justbroke THANK YOU (and everyone else who took the time to chime in)!

We are salaried (hasn't changed since filing), so I'm going to add up all of our debt and remove the marital adjustment from the DMI, then I should be left with my worst case scenario, in a situation where all creditors file claims. I'll brace myself for that, and be happy for anything that comes in less. Fingers crossed!