Keeping items outside of plan?

[getmeoutofhere]

I have a questions....my attorney mentioned the my house and car would be "outside" the plan. My question is this....when calculating the payments to the UST, how does the fact that the car and house are outside the plan? If I run the numbers with the house and car outside, I have about $400 per month disposable income. How am I supposed to make the house and car payment if all is taken by the plan and the $400 goes to the creditors? Am I missing something here?

[bcvw]

By outside the plan, he means you continue to pay on your own, not through the trustee.

The money that goes to these debts is not counted as part of your disposable income. They reduce the amount that is available to the plan. This is a good thing.

[getmeoutofhere]

The money that goes to these debts is not counted as part of your disposable income. They reduce the amount that is available to the plan. This is a good thing.

But would that not cause me to have a negative disposable income?

[bcvw]

I don't understand what you mean. You said you have $400/month disposable income after paying the debt outside the plan.

How do you get negative disposable income?

[NowImDownInIt]

I, too, am confused. Didn't you say that you ran the numbers with the house and car outside the plan?

[justbroke]

You actually can have a negative disposable monthly income (DMI) on your form 22C. Mostly because you are using the IRS Standards and not actual costs. But that's not really necessary to discuss to get an answer to the question.

If you only have $400.00 for your DMI, excellent. You have to realize that your DMI is what is left over AFTER you pay all of your secured debts, secured debt arrearages, priority taxes, and your allowable expenses.

The closer the DMI is to $0.00 or negative, the less your unsecured creditors get. The DMI is just what is committed to pay unsecured creditors after everything else is paid.

You're OK!!!

[justbroke]

A review of Form 22C.

Basically, line 52 (total of all deductions from income) is what is used to feed, cloth and shelter you... as well as pay all your secuerd debt payments, past due taxes, payroll taxes, etc. What's left after all that is subtracted from your income, is called the Disposable Monthly Income (DMI).

Your DMI should be low, comparatively to all other payments on line 52.

Now lets break this down.

Line 38 contains your IRS allowances and line 46 has additional expenses. These do not go to the Trustee! These are your expenses. The bigger the number, the more money in your pocket. (Well, the line for TAXES are payroll taxes, so you'll never really see that money.)

Line 51 is the deduction for DEBT payment, and these generally go to the Trustee for payment. However, your Attorney is going to ask that the House and Car are paid outside the plan, so you'd subtract anything on Line 47 or Line 48 that has to do with the Car or House.

Just my simple look at the form. Hope it helps.

[getmeoutofhere]

Ok...I am running the means test on legal consumer.

If I include the house and car on line 42, I am -1821 month. If I do NOT include them on line 42, I have a disposable income of $400.

[justbroke]

Ok...I am running the means test on legal consumer.

If I include the house and car on line 42, I am -1821 month. If I do NOT include them on line 42, I have a disposable income of $400.

Line 42??? (On Form 22C, that line is for Home Energy Costs).

In any event, do you understand what I posted earlier? It's not the DMI you need to worry about. it's what's called your IRS Allowances and Additional Expenses that puts food on the table, roof over your head, cars to drive, etc. DMI are the "leftovers". You don't want the leftovers to be high!

[getmeoutofhere]

Line 42??? (On Form 22C, that line is for Home Energy Costs).

Line 42 from the Means Test at legalconsumer.com

In any event, do you understand what I posted earlier? It's not the DMI you need to worry about. it's what's called your IRS Allowances and Additional Expenses that puts food on the table, roof over your head, cars to drive, etc. DMI are the "leftovers". You don't want the leftovers to be high!

Not really....maybe this will help....In arizona, Income is $7300 month, house is $3750 (1st) and $1700 (2nd). Car is $675. Keeping house and business. I fail the means test as in negative DMI

[justbroke]

Not really....maybe this will help....In arizona, Income is $7300 month, house is $3750 (1st) and $1700 (2nd). Car is $675. Keeping house and business. I fail the means test as in negative DMI

Hopefully, your lawyer is going to avoid that 2nd mortgage on your house! (I don't know how successful that is in Arizona, but it is highly successful in other States.)

Your car at $675... you're not going to get all of that, so you'll get the limit.

What are you really trying to calculate? Are you trying to figure out how much money you'll have for food, living, clothing, gasoline,e tc?

How many are in your household?

[getmeoutofhere]

What are you really trying to calculate? Are you trying to figure out how much money you'll have for food, living, clothing, gasoline,e tc??

Trying to figure out my payment to the UST....

How many are in your household

4

He is going to strip the second...so that won't be part of it

[justbroke]

Trying to figure out my payment to the UST....

As I wrote earlier, your payment to the Trustee will be

Line 51 is the deduction for DEBT payment, and these generally go to the Trustee for payment. However, your Attorney is going to ask that the House and Car are paid outside the plan, so you'd subtract anything on Line 47 or Line 48 that has to do with the Car or House, from the amount on line 51

This is based on a real Form 22C.

[getmeoutofhere]

Ok..i have a thick head.
I went and down loaded the 22c form.

Line 11 is $6800
Line 38 is $4298
Line 51 is 6125 (1st at 3750, 2nd at 1700 and car at 675)

Would that make line 53 $6800 and line 58 $4298 making line 59 (DMI) = 2502?

[justbroke]

Basically, you're getting there. Was there nothing on Line 46???

Anyhow, add 38 + 46 + 51 to get your total payments. (With what you gave me that's $4298 + $6125 or $10,423.00 in total of all deductions (Line 52).

Something still seems wrong. Because Your line 52 is basically your line 38 + 46 + 51 and that is copied to line 57. Line 58 is line 54,55, 56 and 67 (which is basically 38 + 46 + 51 +54 + 55).

I just don't know. If you're Current Monthly Income (CMI) is really $7,300 , it is interesting to have a mortgage payment that is over 50% of your gross. (Just a data point... nothing else.)

Things that may also be causing issues with the math are that you're not going to get a $675/month allowance for a car. The national average Ownership Cost is about $489/month, and the Operating Cost is $464 in Phoenix (the highest number in Arizona).

I ran it through my handy dandy B22C spreadsheet.... and without any arrearages, past due taxes (federal, state or local) and nothing else, came to a DMI of -$415.00 (negative).

(I used UST numbers for Phoenix area allowances in general.)