Chapter 13. Income above median vs below.

[HLS]

At first my income was calculated as above median for 1 person (Missouri) and was quoted $1400/mo for 5 years which I can not afford. that's 60% of my income. Income was so high because I worked a ton of overtime. I stopped overtime and resubmitted new paystubs. Now he says I am now below/within the median income for my household and can back out overtime for it was voluntary not mandatory. Will my payments significantly be lowered? I assume now I will be on a 3 year plan. I got a meeting here in a few days and am a little anxious I suppose.

[justbroke]

There is no way to tell. I don't see how anyone gets to 60% of gross income in a Chapter 13 unless the debtor has liquidation issues or serious arrears. Though I was making over 5 digits a month, my payment was 60% but that included my mortgage ($3,700/month), plus arrears, plus IRS priority debt, plus vehicles, plus trustee fee. I still had over $4K/month for expenses.

So, are you saying it's 60% of your gross of 60% of your net? Do you have secured debt, attorney fees, IRS debt, and/or other arrearages being paid in the plan?

[HLS]

i am abandoning this forum for everytime i ask a question i get unhelpful responses.

[shipo]

i am abandoning this forum for everytime i ask a question i get unhelpful responses.

Excuse me? How have our responses been unhelpful?

[justbroke]

i am abandoning this forum for everytime i ask a question i get unhelpful responses.

That is not an unhelpful response.

The only way for me to tell you what your payment would be, is to have all the data that your attorney put into the bankruptcy system (e.g., BestCase, or Bankrupter), and play with the numbers.

The questions I asked you let me know what other factors are in what you describe as a 60% plan. Please know that there is something called the "liquidation test" (also known as the "best interest of creditors test") that could also impact you. That's why each case is different and why I asked you four questions to gauge if your payment would go down.

No one here could tell you the amount would go down without having that sort of information.

Example: if you have a home and have $200K in equity and can only exempt $140K, then your "liquidation test" would expose $60K of it. If you make $1,667/month, then your minimum payment would be $1,000/month because you MUST pay back $60K over the 60 month plan ($1,000/month). Even if you reduce your income, your liquidation test still exposes $60K and you'd need to pay a whopping $1,667/month to pay the $60K in a 36-month plan.

I hope you see how complex this could be. That's even just a simple liquidation test on a home. That liquidation test could happen with vehicles, money in the bank, and other assets that are not exempt. This doesn't even include attorney fees that were included in the plan, IRS priority tax debt, and the like.

If this is just too complex for you then the only one that may be able to walk through. your specific factors, income, expenses, and liquidation test will be your attorney.

I tried to answer by asking questions to shape whether you have these issues that are difficult to explain in a short message. In fact, most people can't understand the liquidation test or the other factors and how they impact a Chapter 13 plan. The answer is still that I can't tell you. But I offered to help if you answered the questions, which you have not.

Here are some of your questions and a response...

I got an email that stated my income is above median from the means test what does that mean for me?

Response from me...

For a Chapter 13, being over-the-median means you will be required to be in a 5-year plan.

That's a textbook answer. If you are over the median, it means you are in a 5-year plan.

Are you expecting different answers than what is in the rules? Chapter 13s are complex and each individual has, believe it or not, unique issues. No two plans are the same.

I also looked at some other responses to your questions and they were accurate answers. We try our best to provide accurate answers and not just canned ... "of course your payment would go down... you have less money." That is simply not the case, since the answer is driven by the liquidation test, outstanding attorney fees, arrears paid in plan, IRS priority tax debt, and other mandatory items that must be paid within the applicable commitment period (a/k/a the life of the plan).

Now that you know why I asked the question, you can answer or we'll leave it at "there's no way to tell..." (without additional information).