Found out what my disposable income is...

[arlington]

My attorney felt that my disposable income was too high and therefore asked me to make some adjustments. I went ahead and included my student loans and my auto loan (which I really didn't want to do). After realizing that the "transportation" section included what I paid for gas I changed that as well. I really thought that just meant parking...go figure. Also because I had to go exempt for a couple of months she didn't have a "real" sense of what my real check amounted to with the actual taxes deducted (I have already gone back to regular taxes being deducted). After all of the changes were made my net/disposable (I guess they mean them same) went from $1,800 to $476.00. Now the big question...what exactly does that mean? Why is that figure so important. I apologize for asking if it sounds dumb but I really don't know.

[Granny]

That figure is VERY important. It can mean the difference between a Ch 7 or a CH 13 and 5 years of payments. The higher that number, the greater your payments in a Ch 13.

You want to make sure you have every expense you can think of in there. Not only do you include gas and parking, but you also include insurance, registration, taxes, license plates etc.

You want to look carefully at each line to make sure you have every expense you would pay through out the year. Be especially aware of expenses that you only pay once or twice a year. Look back through your checkbook and bank statements for the last year to make sure you didn't leave something out.

This is not the time to try to show that you can be economical and frugal. It is not the time to show that you really can scrimp and save...if you show your scrimping and saving on that form but cutting expenses, you will be doing it for the next five years. Not that you won't be doing that anyway, but why make it unnecessarily hard on yourself?

[arlington]

That figure is VERY important. It can mean the difference between a Ch 7 or a CH 13 and 5 years of payments. The higher that number, the greater your payments in a Ch 13.

You want to make sure you have every expense you can think of in there. Not only do you include gas and parking, but you also include insurance, registration, taxes, license plates etc.

You want to look carefully at each line to make sure you have every expense you would pay through out the year. Be especially aware of expenses that you only pay once or twice a year. Look back through your checkbook and bank statements for the last year to make sure you didn't leave something out.

This is not the time to try to show that you can be economical and frugal. It is not the time to show that you really can scrimp and save...if you show your scrimping and saving on that form but cutting expenses, you will be doing it for the next five years. Not that you won't be doing that anyway, but why make it unnecessarily hard on yourself?

Thanks Granny. I did not think to include registration and license plates. I don't think I would qualify for a 7 though because our incomes are over the medium. I will look at it again and the bank statements is a good idea as well.

[JollyGG]

There is a link in the general bankruptcy section under the thread titled "Links for members"

http://www.ca-bankruptcy-attorneys.com/calculators/expense_calculator.html

It may help you come up with a few other expenses you may have forgotten.

[Granny]

Thanks Granny. I did not think to include registration and license plates. I don't think I would qualify for a 7 though because our incomes are over the medium. I will look at it again and the bank statements is a good idea as well.

From what I've read on this forum, it is possible to qualify for a Ch7 while being over the median, but it is a rarity. You have to have unusual, justifiable expenses.

There are several threads on the forum with links to help you with expenses. If you are going the ch 13 route, do the research and be sure to include every expense you can think of.

I'd post the links for you but I've got to run to pick up my grandson from school and don't have time to search

Good luck.

[SinkingFast]

And even you do not wind up qualifying to file a Ch 7, you definitely wanna be able to live in a Ch 13.

Be sure to remember all those expenses that we don't necessarily pay daily, weekly, monthly. Things that come 1x or 2x a year. Or random expenses.

Insurance premiums. Trash collection bill. Car breaks down,............. You need a tow and repairs done. Fix a flat tire. Charitable contributions. Etc.

Transportation is gasoline, maintenance, repairs, parking, tolls, tires,...... Anything associated with the operation of a vehicle except for Auto Insurance. There's a separate line on Sched J for Auto Insurance.

[arlington]

And even you do not wind up qualifying to file a Ch 7, you definitely wanna be able to live in a Ch 13.

Be sure to remember all those expenses that we don't necessarily pay daily, weekly, monthly. Things that come 1x or 2x a year. Or random expenses.

Insurance premiums. Trash collection bill. Car breaks down,............. You need a tow and repairs done. Fix a flat tire. Charitable contributions. Etc.

Transportation is gasoline, maintenance, repairs, parking, tolls, tires,...... Anything associated with the operation of a vehicle except for Auto Insurance. There's a separate line on Sched J for Auto Insurance.

Thanks sinkingfast. I just called my husband and told him that we need to go back over this thing. I was initially amazed that I went from $1800 to $476. Let's just say that $476 is the disposable income. Then what next? What happens with that figure? Will they add something else onto it. Does that mean this is the amount that I have to pay into the plan monthly?

[SinkingFast]

Whatever your monthly disposable income is will set your payment amount.

The Trustee's fee and any remaining attny's fee will be deducted from what you pay in to your Plan.

If you have $500/mo disposable income, chances are, unless that gets you into a 100% payback situation, you'll be in a 5 year plan.

$500/mo x 60 months = $30,000 in Plan Payments.

Say your remaining attny's fee due is $2K and the Trustee's % is 10% ($3K),............ You'll pay your Creditors $25K over the term of your plan.

(Simplified Explanation. 13'ers will correct me if I'm wrong.)

[Granny]

Thanks for posting the link JollyGG.

And yes, Sinking Fast, that's about how it works. However, you can almost be sure that the trustee will look for any wiggle room in the expenses, looking for something that is too high and pointing that out, asking for an increase in the payments. But you can also bet your bottom dollar they won't say a word if they think one of your expenses it too low.

So Arlington, that's your most important job, allow for any and EVERY expense you can think of. You don't want to short change yourself. It will come back to bite you later.

[arlington]

Whatever your monthly disposable income is will set your payment amount.

The Trustee's fee and any remaining attny's fee will be deducted from what you pay in to your Plan.

If you have $500/mo disposable income, chances are, unless that gets you into a 100% payback situation, you'll be in a 5 year plan.

$500/mo x 60 months = $30,000 in Plan Payments.

Say your remaining attny's fee due is $2K and the Trustee's % is 10% ($3K),............ You'll pay your Creditors $25K over the term of your plan.

(Simplified Explanation. 13'ers will correct me if I'm wrong.)

Sinking fast...it appears that the amount of your debt really is irrelevant. I have legal insurance so the legal fees are covered but I had to pay the court filing fees. How would you know if you qualify for a 100% payback situation? By the way...I appreciate your responses...learning a lot here.