Don't mean to gloat, just happy

[gunsmoke]

Everything went as I wanted. Purchased new vehicle 3 months before fileing.Put it in the plan. Attorney fees in the plan. By the time gmac, the attorney, and the trustee get their cut, 2% to unsecured creditors! I hate unsecured creditors!

[CATCHMEIFYOUCAN]

Its okay to gloat, BK is stressful enough, everyone loves when things go their way! Just curious why you included your car payment within the plan. I know there are pros and cons to this. I know the pro to this is if you keep paying your car outside the plan, it looks better on your credit report?

Congrats! Catchmeifyoucan, I had to buy a new car myself, my other car got flooded a month before I was due to file!

[CityGirl]

Hmmm, I want to put my car in the plan because it'll be easier to pay but if anyone can tell me what the pros and cons are, I'd appreciate it!

[SinkingFast]

Hmmm, I want to put my car in the plan because it'll be easier to pay but if anyone can tell me what the pros and cons are, I'd appreciate it!

Another con to paying the car payment inside your Ch 13 Plan,.......... You're paying the Trustee his/her cut to make your payment for you.

If your Trustee's fee is 10% and you'll be paying $6K in car payments thru your Plan,........... You'll also pay the Trustee $600 to make your car payments for you.

If your attny pushes for you to include the car payment, the attny is trying to grease the Trustee's palm with more money. Granted,........ Attnys do need to maintain a good relationship with the Trustees. But the Trustee/Attny relationship should not come at unwitting Filers' expense.

[CityGirl]

That's true but it'll be easier and worth the $600 to make the payment together instead of seperately. Also, I get to spread the payments out over another 5 years. I have 4 years left on the loan. I am upside down on the car. It's worth 19K and I owe 29K on it. At least I'll have a smaller payment but pay the same amount. Am I correct?

And he already has a great relationship with the trustee. This is a good thing for me!

[gunsmoke]

Sure more money is going to trustee, but what do I care. If it doesn't go to trustee, it goes to unsecured creditors.

[CindyLou]

Gunsmoke, thats true in your case if its not 100% payback, but in a 100% payback it would mean more money would go out overall. CG, refresh my memory, are you going to be 100% payback on unsecured?

[CityGirl]

No way! I'm paying 10% to unsecured. Why would someone pay 100%???

[CindyLou]

There are many people that have to pay back 100%. My brother is paying 100%. If your disposable income over the 60 months is greater than or equal to what you owe your creditors then you pay 100%. Someone enters a 13 at a 100% payback in order to regoranize or to save property. In my brother's case it worked to his advantage because only 30000 out of 85000 filed claims. Even if all had filed claims it woulld have stopped all the high interest and late penalties...so that would have been the advantage... Being in a 100% payback that literally saved him about 55,000 out of his pocket!

[CityGirl]

oh I get it. He was in 100% of the ones that filed claims...gotcha.

Well, I owe 60K in unsecured and my attorney said I'd only pay back 10%. He said he'll work out the numbers to my advantage so I'm sure he knows what he is doing. Even after the $800 a month he told me I'd pay, my income varies every week so I could have up to $2k or more disposable in certain months. For example, if my last 6 months I made 40K, my next 6 could be 50K but he said the trustee he works with has never asked for yearly bank statements or income tax returns from the filers after the initial one. The trustee told him he doesn't even have time to pee,let alone worry about that.

[CindyLou]

Hi CG. I'm not sure you are yet grasping the concept of what determines the payback percentage in a 13. The payback percentage is determined by one thing and one thing only..and that is the amount of your disposable income. So in reality if your attorny is saying you are going to pay back 10%, but then only 30,000 of those 60,000 file claims, then you will actually be paying back 20%. You will still be paying your 800/month, which is your disposable income. See, you don't choose your percentage. Your percentage chooses you by what your disposable income is. And if your claims go down then your percentage goes up. Lets say in an extreme circumstance that only 6,000 of your unsecured filed claims (not likely, this is just to state a point) then you would end up being a 100% payback. You payment stays constant at 800 per months because that is your disposable income. That doesn't change. The only time your payment changes according to your claims is if you START the 13 in a 100% status. Make sense?

[CityGirl]

Cindy? Are you home. I'd love to call you!!
Can you PM your number or I'll PM you mine?

[keepmine]

The payback percentage is determined by one thing and one thing only..and that is the amount of your disposable income.

Actually, there are 2 things that determine the payback. An unsecured creditor can't get less in a 13 than they'd have gotten in a 7. If you are in a state like Al. {as an example} that has very poor exemptions, you could be paying a far greater percentage if you wish to keep your home or other secured property.

http://www.bankruptcyaction.com/alexemptions.htm

I am upside down on the car. It's worth 19K and I owe 29K on it. At least I'll have a smaller payment but pay the same amount. Am I correct?

For the life of me, I can't understand why anyone would take something like this through bk. Part of life after bk is avoiding bad financial decisions and this one is just awful.

[CityGirl]

Now why would you say that?????
either way, I have to pay my car payment plus interest in full.
Why not stretch it out over 5 years instead of 4?

If I paid it off after 4 outside the plan, I wouldn't be able to get another car any earlier because I'm not supposed to buy a car within the plan.

Please explain what it is you mean~

[CindyLou]

I think what Keepmine means is why aren't you giving the car back thus turning the deficiency balance into unsecured debt and only paying back 10% instead of 100% of such an upside down amount. I'm not saying right or wrong, just trying to interpret you guy's conversation....