Has anyone had a 0% payback in Chapter 13?

[phoenix44212]

I'm under means, so I can do a 3 year C13 and my disposable is mimimal. So I'm just wondering if it wouldn't be the best route, ie credit reports, credit rebuilding, etc.

[leftyf]

One thing to keep in mind is that creditors will get at least the same amount as they would have received under a 7. Do you have assets that could be liquidated for cash that are not exempt? Sounds like you can go with a 7, so why not? I don't think it will make much of a difference credit wise...in fact, the 13 will probably prolong your rebuilding efforts.

[SinkingFast]

I have seen a 0% payback to Unsecureds Ch 13 Plan filed and Confirmed. That case was filed here in our Court shortly before we filed.

The people were below the Median. They were in arrears on their mortgage and car payments, owed back property taxes, and income taxes. Their plan proposed to pay all arears to Secureds and Priority Creditors and 0% to Unsecureds.

So it can be done.

[EveryDayAdam]

My chapter 13 is 0% to unsecured. Only ones being paid are the attorney and secured creditors...However, it can depend sometimes on the rules of your local court.

I do know that priority and secured creditors who are being paid inside the plan must be paid 100%

Also, sinking fast is correct as well: they must get atleast as much as they would have gotten if you filed for a chapter 7...so if you would be a no asset chapter 7, then you're fine...(almost all chapter 7's are no asset cases).

[sarakay5]

We are also in a 0% 13. We were below the median and up to date on mortgage and auto. The only reason we are in a 13 is due to ignorance on our part. We panacked and did not shop around for lawyers or find this site until after confirmation. We had no equity in our home and the auto was about even with what we owed. Oh well. So far all is going well and our lives are much better after filing. (We did have to go through a simple audit by the trustee because we were a 0% plan) It only involved supplying the same paperwork as we did when we filed, just 10 months later.

[chpxiii]

I had a 0% payback plan in Chpt. 13. However, when I paid it off early, there was some $1900+ left over after all secureds were paid. That money ended up being dispersed to a few unsecureds. I was annoyed with that.

[river147]

i was just wondering, is a 0% chapter 13 payback possible because there is very little disposable income left after all bills are paid? How do the trustee determine a 0% payback to cc?

[SMinGA]

A plan payment SHOULD be your DMI. Meaning net income less bills & expenses. If that amount is only enough to cover trustee fees/atty fees/priority debt/mortgage arrears/etc. - then the plan should be set up as 0% to unsecured. Just because it starts that way, however, does not mean it will end that way. I anticipate filing a plan with a very low amount (under $2000) to unsecured. But in my district, the trustee takes tax refunds even though I claim exempt & my federal refund is JUST due to child tax credits... So that will result in more money to unsecured.

I think some attorneys may be nervous about filing a plan with 0% aimed to unsecured. But then, the attorneys should know a bit about the district/trustee and whether or not to expect trouble.

[momofthree]

Our plan was confirmed with 0% going to unsecureds. We are under median income with a negative dmi. We are only paying our auto loan/attny fees/trustee fees in our plan. We filed ch.13 solely to strip our 2nd mortgage.

That said, our 341 made us sweat as the trustee wasn't happy about our plan--he didn't like that we were paying 0% to unsecureds AND stripping our mortgage, said that we were getting to have our cake and eat it too. He thought we should be a simple ch.7 case. But our attny fought for us and we were confirmed.

[HHM]

0% somewhat depends on which district you find your self. If you are under median, 0% is possible. The nature of being under median means you are presumed to have no DMI. If you are over median, you generally must show something going to unsecureds. Keep in mind, we are talking about class 4 unsecureds. Even it is a token amount, usually something has to go to class 4 if you are over median.

[sheilaE]

Momofthree-that worked out GREAT for you! I get so confused on the different payback plans-I wish I'd asked more questions when we had our "free" consultation with our atty. He said it'd be around $1300.00 for $80,000.00 worth of cc debt plus we are hoping to strip a $55,000.00 2nd AND we are keeping our home-with a payment of $2100.00. Since meeting with him we have purchased a used vehicle to help get us through the next 5 years. The pymt is $388.00.
I've read the thread re: % Payback (it doesn't matter). But I don't get it because it does matter. From reading everything on here, we HAVE to pay a certain % amount back. I can't sleep most nights as I worry about what it'll be.

Another part that is confusing.....if you can't seem to come up with enough DMI then doesn't it get dismissed?

[tigergem]

My unsecureds are scheduled to receive less than 1%. The only reason for that is, I like round numbers, and when I was calculating my plan, if I lowered my plan payment by $1.00 per month, it did not allow full funding for my secured and priority. However, I see my trustee has it listed at 0%, and I knew - - but had forgotten - - that he isn't going to cut those tiny little checks for less than $10.00.

[ladyjenn]

A plan payment SHOULD be your DMI. Meaning net income less bills & expenses. If that amount is only enough to cover trustee fees/atty fees/priority debt/mortgage arrears/etc. - then the plan should be set up as 0% to unsecured. Just because it starts that way, however, does not mean it will end that way. I anticipate filing a plan with a very low amount (under $2000) to unsecured. But in my district, the trustee takes tax refunds even though I claim exempt & my federal refund is JUST due to child tax credits... So that will result in more money to unsecured.

I think some attorneys may be nervous about filing a plan with 0% aimed to unsecured. But then, the attorneys should know a bit about the district/trustee and whether or not to expect trouble.

SO the way I look at this is, you would be where you were to begin with, since you will have no extra money after all is said and done?

[LadyInTheRed]

I've read the thread re: % Payback (it doesn't matter). But I don't get it because it does matter.

No, it doesn't. You will pay all of your DMI to the trustee during your plan. Your DMI is your DMI, regardless of the precentage the unsecured creditors get. Your DMI is based on your income minus your expenses during the life of your plan, not the amount of debt you have (but, sometimes it is necesary to decrease your expenses in order to have a DMI high enough to fund a feasible plan that pays as much to the creditors as they would receive in a Chap 7 liquidation). Your secured and priority debt get paid first. What's left of your DMI during the 36-60 month plan goes to unsecured creditors, regardless of percentage. The percentage shown on your plan may not be the percentage they actually get.

The bankruptcy code does not prohibit a plan that pays 0% to unsecured creditors. However, in many distritricts, the trustee will object to such a plan. That doesn't mean the plan won't eventually be approved. It just might get more scruitiny.

[sheilaE]

That's true. When our atty told us we would be paying back $1300.00 per month, I couldn't believe it because that was about what we were paying out in credit card payments every month and the reason we got into this mess. We never had that much left over to pay, so we'd use credit for gas and groceries. How we're going to make that payment every month for the next 5 years is a BIG worry right now. We don't have extra's that we can let go of either-like health club memberships, boats or big toys.