How much to trustee ? And other question

[doglover]

Hi, I was wondering why some people have to pay only 5% and others pay back 100% of their debt. I wonder what my payments are going to be. I assume high since we have 4 missed house payments in there and 2 car payments.

My other question is. Has anyone been told , "NO, you can't file bankruptcy"? If that happens to us we will lose our house.

Oh 1 more....... I got a loan and I put down our TV's and computers as collateral (I guess thats what it's called). The guy said if we don't make our payments I'm giving them the right to come and take that stuff for the repayment of what I borrowed. Will BK cover me in this situation? Thanks so much

[lrprn]

Hi, I was wondering why some people have to pay only 5% and others pay back 100% of their debt. I wonder what my payments are going to be. I assume high since we have 4 missed house payments in there and 2 car payments.

To explain this, let's set up this simplified pretend Ch 13 situation:
- Your plan is for 60 months as almost all Ch 13 plans are these days
- Your plan pays 10% every month for 60 months to your trustee to administrate your plan
- Your lawyer is being paid the remaining $2,000 of his/her fee you owe as well
- Your Ch 13 payment = $500/month
- All the debt claimed by your creditors adds up to $80,000

Now....
- Over the life of your plan at $500/month you will pay $30,000 into your plan
- Creditors are paid back in a specific order set by the current bankruptcy law. Trustees and lawyers get paid first, then secured creditors, then the government (primarily the IRS), then last the non-secured creditors.
- Over the life of your plan, your trustee will get his 10% every month for a total of $3,600
- Your lawyer will receive his/her $2,000

$60,000
- $3,600 for trustee
- $2,000 for lawyer
$54,400 for your creditors

Your creditors claimed $80,000 and the plan can pay them $54,400 so $54K divided by $80K = 67% payback in this case

The reason that the payback % changes so much is due to wide variations between the individual monthly payments over the life of every plan compared to the total amount the creditors claim in each plan.

Hope this helps make a complex answer more understandable.

My other question is. Has anyone been told , "NO, you can't file bankruptcy"?

Certain debtors may get advice from bankruptcy lawyers that filing bankruptcy won't help them recover in their unique debt situation. However, if a debtor is determined to file anyway, they can still do so.

I got a loan and I put down our TV's and computers as collateral (I guess thats what it's called). The guy said if we don't make our payments I'm giving them the right to come and take that stuff for the repayment of what I borrowed. Will BK cover me in this situation?

If you offered up your TVs and computers as collateral, then the lender can take their collateral (the TVs and computers) if you default on the loan.

In bankruptcy you have two choices for a loan like this. You can reaffirm the loan so it is not wiped out in bankruptcy and you pay it back, ensuring you can keep your TVs and computers. However, unless your TVs and computers are very new (as in less than six months old), this creditor is unlikely to show up at your door to take them. They want your money, not old electronics that has almost no resale value. Many folks decide to ignore creditor threats to instead take the chance and not reaffirm knowing that the odds are that they will end up with their electronics and not have to pay back the loan. Only you and your lawyer can decide which is the right option for you.

HTH!

[doglover]

Thanks so much for your in depth reply. I get it now. THANK YOU

[BrianBlade]

I don't get some of this still.

To explain this, let's set up this simplified pretend Ch 13 situation:
- Your plan is for 60 months as almost all Ch 13 plans are these days
- Your plan pays 10% every month for 60 months to your trustee to administrate your plan
- Your lawyer is being paid the remaining $2,000 of his/her fee you owe as well
- Your Ch 13 payment = $500/month
- All the debt claimed by your creditors adds up to $80,000

Now....
- Over the life of your plan at $500/month you will pay $30,000 into your plan ( how do you figure $500/mo?? )
- Creditors are paid back in a specific order set by the current bankruptcy law. Trustees and lawyers get paid first, then secured creditors, then the government (primarily the IRS), then last the non-secured creditors.
- Over the life of your plan, your trustee will get his 10% every month for a total of $3,600 ( Isn't 10% of 30,000 $3,000? )
- Your lawyer will receive his/her $2,000

$60,000
- $3,600 for trustee
- $2,000 for lawyer
$54,400 for your creditors ( but you're only paying $30K, so how can creditors get $54,400?

Your creditors claimed $80,000 and the plan can pay them $54,400 so $54K divided by $80K = 67% payback in this case