Disposable Income & Mortgage payment

[Sham11801]

Hi All,

here's one that will probably stump my attorney when he returns from vacation. Planning to file Ch 13 in next few months. Looks like my payment may range from 350-600 (not sure yet). Have a first mortgage payment of $2577 incl taxes and ins which is fixed interest, interest only for the next 7 more years. Im assuming my disposable income will be calculated using this payment, however recently Countrywide has been sending me statements to pay principal and interest (30 year amort.) or 15 year principal and interest. How will thedisposable income calculation be affected if i start paying $3067 which is the 30 year amort payment including principal. Im assuming this will lower disposable income (if it is even allowed that i go this route). Can my attorney present this to trustee since ive been making only the interest payments for the last 3 years? HELP!

[justbroke]

Hi All,

here's one that will probably stump my attorney when he returns from vacation. Planning to file Ch 13 in next few months. Looks like my payment may range from 350-600 (not sure yet). Have a first mortgage payment of $2577 incl taxes and ins which is fixed interest, interest only for the next 7 more years. Im assuming my disposable income will be calculated using this payment, however recently Countrywide has been sending me statements to pay principal and interest (30 year amort.) or 15 year principal and interest. How will thedisposable income calculation be affected if i start paying $3067 which is the 30 year amort payment including principal. Im assuming this will lower disposable income (if it is even allowed that i go this route). Can my attorney present this to trustee since ive been making only the interest payments for the last 3 years? HELP!

Yes. He will file a Plan that doesn't just say "Months 1 through 60 pay $2,577 to Countrywide". S/He may actually create a Plan which reads:

Months 1 through 36 pay $2,577 to Countrywide
Months 37 through 60 pay $3,077 to Countrywide

Now the Disposable Income gets real strange. As you're supposed to "project" your "disposable monthly income", it's only for the purposes of determining how much the unsecured creditors will get. By running out your plan as above and calculating the ACTUAL amount, you need not worry what's on your Form 22C.

For example, my Form 22C has a DMI of one amount. I KNOW that my payments to the Bank are going to increase (due to an Interest Only Rider on my loan). It will increase by $500 (approximately). So, I calculated out every month (Month 1 thorugh 60) with EXACTLY what will be paid to every secured creditor. I did this all based on my income remaining fixed (I'm not expecting nor can i guarantee any bonuses in the future). Then, what's left, is the DMI! Take that, divide it by 60, and that's what the unsecureds get each month!

With any luck, that's a negative number.

(Also adding, that the amount shown on your Form 22C as DMI, may be different than what you "project"!!! The reason for this is that your Current Monthly Income (CMI), on which the DMI is based, may not be what you REALLY make each month. Since the CMI is a 6 month lookback (average over six months), you may have received a huge one-time bonus, which is skewing the results!)

[Sham11801]

I see, thanks for that info. I wasn't aware of any of this.
However, my mortgage is up to date and will be paid outside the plan (i believe). Does this still apply then? I'd rather not pay it in the plan.

[justbroke]

I see, thanks for that info. I wasn't aware of any of this.
However, my mortgage is up to date and will be paid outside the plan (i believe). Does this still apply then? I'd rather not pay it in the plan.

If your District allows for payments outside the plan without motion. I actually have filed and was granted my motion to make payments (on some things) outside the Plan.

[chloe0724]

Can you afford the extra amount at this time? If you can, I would get something inwriting from COuntrwide with you payment amount. This would make the Trustee aware that it's legit.

[woeisme]

So does this mean I should have gotten my mortgage refinanced to a 15-year one before filing my CH 13 plan so that I could have been paying off more on it instead of my creditors? Or just voluntarily upping my payments so that it would count more against my disposable income? I have a hard time believing a trustee wouldn't see this as a trick on my part...

[chloe0724]

Woe,

If you could have refinaced into a 15 year before filing and affored the payments, there would be nothing tricky about that. I just don't think most people filing for a 13 are in the position to do that.