does anyone happen to know???

[inajam37]

In a chapter 13, if you aren't at 100% payback will they automatically take tax returns and bonuses to apply towards what you owe or can you keep a portion of it as long as it doesn't increase your income by that much. Thanks for the info.

[arlington]

In a chapter 13, if you aren't at 100% payback will they automatically take tax returns and bonuses to apply towards what you owe or can you keep a portion of it as long as it doesn't increase your income by that much. Thanks for the info.

From my understanding it is totally up to the trustee. Some may want all of the refund...some may want none of it...some may want anything after $2,000. Some trustees want to know about your increases and some don't give a hoot. I will find out about ours on next week. Wish me luck!

[donmas]

Ok, please excuse my inexperience, this is all new to me. What is this 100% payback? Why are we all filing a 13 if we have to pay back 100%? The only benefit I can see is that the debt will be gone in 5 years compared to probably the rest of your life.

[CindyLou]

Answer to OP's question: some districts requires ALL tax returns to be turned over in 13's. Case in point. Middle district of Lousiana....all returns must be given to trustee.

Answer regarding 100% payback. A 13 provides the automatic stay and stops all late pentalties and lowers those 30% interest rate to 6%. In some cases it also will drop off some creditors who fail to file claims. Such as in my brother's case where only 30,000 of 85,000 filed claims! he is 100% payback. (he was very lucky...that isn't always typical...its very hit and miss). Chapter 13 is very very protective even for those in 100% payback, even if they end up paying back every red cent! Basically for those who are overwhelmed trying to juggle multiple creditors...writing 30 or 40 checks a month......it takes that pressure away and they are able to breath, make one payment to the trustee and get one with life....make sense?

[wayne-o]

I agree with all above that it is up to the trustee. In my district. The trustee only wants your returns if the payback is less than 20%. The 13 allowed me to keep my home. Im not paying back 100% but like you said, the debt is gone after 5 years. 3 in my case (0ld law).

[southernbelle]

Answer to OP's question: some districts requires ALL tax returns to be turned over in 13's. Case in point. Middle district of Lousiana....all returns must be given to trustee.

This site is AWESOME!!!! I live in Louisiana and will file BK in December (Middle district) and have searched high and low for any relevant "real" tips/advice/knowledge from people that know what to expect. I have 2 really good atty's to meet with, but I am still gathering the info. they will need to better advise me. Again, thanks for the advice and you guys ROCK!!!

[CindyLou]

southernbelle:

here is the link to here website and the info off the website:

http://www.annettecrawford.com/

Welcome to the Annette C. Crawford Website

NOTICE

NEW PAYMENT ADDRESS:

Annette C. Crawford
Chapter 13 Trustee
P.O. Box 2159
Memphis, TN 38101-2159

FOR INTERNET CASE ACCESS, CLICK THE LINK BELOW:

http://www.13network.com/trustees/bat/bathome.asp

It is the responsibility of the debtor to advise the offices of both the Trustee and debtor attorney as to any changes in address, phone number, place of employment, marital status, and any other matter affecting your ability to perform under the plan.

TAX REFUNDS

All tax refunds during your entire case must be turned over to the Trustee uncashed. Failure to turn in your refund will result in your case being dismissed and will also prohibit any filing of future cases.

[lrprn]

Ok, please excuse my inexperience, this is all new to me. What is this 100% payback? Why are we all filing a 13 if we have to pay back 100%? The only benefit I can see is that the debt will be gone in 5 years compared to probably the rest of your life.

Let's see if I can explain the payback % more clearly by using a very simple pretend situation....

Let's say your monthly payment is $500 for 5 years (60 months).
You have 10 non-secured creditors who you owe $4000 each when you file = $40,000 total unsecured debt at filing

After you file, 8 creditors file claims for $4000 each. The remaining two don't file claims within 90 days of your 341 meeting. That means you will only have to pay 8 creditors = $32,000 total. 2 creditors and their $8,000 you owe is wiped out never to be paid.

Now, how much will you pay the remaining 8 non-secured creditors back over the life of your plan?

Over the 60 months of your plan, you will pay in $500 x 60 months = $30,000.

Of that $30,000, the following will be taken out off the top:
- Your Ch 13 trustee takes out a certain % every month to administrate your plan (usually between 7-11% depending on your district) - in this case he's taking 10% every month = $3,000 total over the life of your plan
- Your Ch 13 lawyer was owed $2000 more of her fee - that $2000 is paid from the $30,000 as well

Now you have $30,000 in the plan minus $3,000 for the trustee minus $2,000 for your lawyer = $25,000 to pay back to the non-secured creditors.

Remember 8 creditors filed claims for $32,000, but you are only going to pay them back $25,000 over the life of your plan. That means $25,000 divided by $32,000 = 78% payback. The remaining $7,000 owed to the 8 non-secured creditors is wiped out and never has to be paid.

There's no way to know your actual payback % until all your creditors have filed claims. The % payback your lawyer tells you before you file is the % that you'll pay if ALL your creditors file claims.

Ch 13 payback % is complicated, so if this explanation didn't make it clear, keep asking questions until we sort it out.