Can someone explain the payments on a Chapt 13?

[pookieny]

My lawyer says I am $250 over the means test and might have to go into 13 instead of 7. I here reading up on stuff and see posters posting how much they are paying back and it's high! If I could make those payments to repay my debt then why would I need bankruptcy?

How are you able to make monthly payments of thousands of dollars? I only take home less than around $2000 per month and my bills just to pay my over head and car are $1600. That only leaves $100 per week for food an anything else I need to live.

Why do some of you have to pay back 100 % of what you owe? Why do bankruptcy then?

I don't get it- when I talked about doing a chap 13 before I thought I could make it on a 7, my lawyer said I would probably only have to pay $100 per month.

[StartingOver08]

Something doesn't sound right.....either you accidently left off some expenses in your budget or your attorney did not review all of your financials. You sound like you are way under median if you only take home $2000/month and live in NY. (I guessed at your state by looking at your screen name) So correct me if you are somewhere else.

Did you interview other attorney's?
Is this an experienced BK attorney you are using?
Did you retain him yet?

I think there has been some miscommunication or some missing information. Please post your info so we can see what is going on....

[pookieny]

It wasn't my attorney who told me that, it was his assistant that does the paperwork. He is on vacation. She is just starting my paperwork to file and called me and said that my past 6 months paychecks added up to over the means even though I make under the NY state yearly amount. She said I should wait a couple months to file because I had one month in October that was a 3 paycheck month because I am paid bi weekly and that caused it to go over , but it's going to be the same in April again, because it's a 3 paycheck month again. Or I could do a 13.

I have a garnishment that they are taking 10% off the top and by the time I pay taxes and health insurance, and a 401k loan, flexible spending accnt, it's almost half gone. I didnt get it either and she said she would have the lawyer call me when he gets back because I wasn't understanding it. I take home $1100 one week and the $900 the next except twice per year when I get an extra paycheck.

My mortgage is $334 biweekly,
car is $336 monthly
utilities are $300 per month on the budget plan
insurance for home & car is $113
then there is cable, phone, cell

[StartingOver08]

You have many more expenses than you are showing - we may not always think of them as expenses because they occur annually or semi-annually, but you get to use the expenses monthly.

Go to the Ch 13 forum and look for expenses - you have auto maintenance expenses (tires, brakes, regular maintenance, you have food, entertainment, there are lots and lots of things you can show in your budget that you have not shown). This is the time to get extremely detailed in your budget.

You should be a Ch 7 - not a 13. I would look for those additional expenses you did not include and wait for the attorney to return to speak to him too. Remember, attorney's get paid more $$$ in a 13 than a 7 so their natural inclination is to push you to a 13.

[crookedoak]

my monthly payment originally was 1216. That included my monthly rent, car payments, 1 utility company.

I moved out of the house and into a new one and the payment dropped to 454 monthly. ( cars and utility )

I paid 100% to the Priority creditors, 100% to secured after cram down +4% interest ( cars ), and 4% on unsecured.

Remember 13 is not there to make you have money, its there to make sure you pay off your debts.

It was tough at first, but after realizing my major bills were paid each month, I became used to it

[pookieny]

What is a priority creditor?

[crookedoak]

My priority were landlord and the gas company.
My secured were my vehicles
all other utilities, cc, etc were unsecured.

I would imagine that if you own your house it would be considered priority

[pookieny]

You have many more expenses than you are showing - we may not always think of them as expenses because they occur annually or semi-annually, but you get to use the expenses monthly.

Go to the Ch 13 forum and look for expenses - you have auto maintenance expenses (tires, brakes, regular maintenance, you have food, entertainment, there are lots and lots of things you can show in your budget that you have not shown). This is the time to get extremely detailed in your budget.

You should be a Ch 7 - not a 13. I would look for those additional expenses you did not include and wait for the attorney to return to speak to him too. Remember, attorney's get paid more $$$ in a 13 than a 7 so their natural inclination is to push you to a 13.

I was just including things I have to pay every month...I wasn't including any home or car maintenance. Once I put them in, I would be at a negative. When I did my credit counseling for my BK, the counselor even said I was at a negative and didn't even see how I could survive even after bankruptcy.

The assistant said it didn't matter about my expenses, they looked at my income for the past 6 months and I was over.

[pookieny]

my monthly payment originally was 1216. That included my monthly rent, car payments, 1 utility company.

I moved out of the house and into a new one and the payment dropped to 454 monthly. ( cars and utility )

I paid 100% to the Priority creditors, 100% to secured after cram down +4% interest ( cars ), and 4% on unsecured.

Remember 13 is not there to make you have money, its there to make sure you pay off your debts.

It was tough at first, but after realizing my major bills were paid each month, I became used to it

So the trustee makes all your payments for you? And the payment you made was for all your bills?

Oh ok, I just thought you made payments of just what you are declaring bankruptcy on, not your mortgage, cars, utilities.

[pookieny]

I owe about $25,000 on unsecured debt.

[StartingOver08]

Your lawyers assistant does not know what she is talking about! You can be over median income and file a Ch 7 as long as you have no disposable income to pay the Ch 13. I believe the number that the Trustee looks for is $166 in disposable income/month. (I was over median by a lot - and had a successful Ch 7 because I was negative after expenses.)

Your expenses do count. Some expenses are not allowed.

Are you keeping your house?
Are you current on your house payments?
Did you include your escrows?
Doing the right budget is critical....

Some of the Ch 13 filers will get on here soon and be able to answer your budget questions more fully. In the meantime you might want to check out the sticky's in the Ch 13 forum (up top).

[pookieny]

I thought she might be full of crap and I even kind of debated with her and she got real defensive and said she would just make an appointement for me with the lawyer when he returns because I wasnt understanding her.

I rob Peter to pay Paul and I'm usually behind on something major every month because of the garnishement. And I haven't been working any overtime to keep my pay under the median and the garnishment kept down too,
I wasn't going to keep my car because I owe $11,000 on it and still have 3 years to pay on it but that would just kick me into a 13 without it.

I am keeping my house, no question. My mortgage is $454 per month plus property tax and it will be paid in full 2016. Even with the tax, I could never rent any cheaper and I have 3 dogs and a cat to consider.

[pookieny]

Oh, and after this years taxes, I am going to owe about $3000 to Fed & State. Hope I can make payments on that.

[StartingOver08]

In a Ch 7 you can make payment arrangements either before you file or after you are discharged. In a Ch 13, the income taxes are a priority debt and get paid first.

[DebtEnder]

I am keeping my house, no question. My mortgage is $454 per month plus property tax and it will be paid in full 2016. Even with the tax, I could never rent any cheaper and I have 3 dogs and a cat to consider.

Question about the house then. If it is that close to being paid off home much equity do you have in it. In a chapter 7 anything not covered by an exemption could be liquidated by the court to pay whatever can be paid to your creditors. I think NY state house exemption is 50k per filer so 100k if your married. So in other words if your house is worth say 100k you owe say 15k and are unmarried or not filing joint then you would have 25k of house that is not protected, therefore the trustee could sell your house to get that 25K to pay your creditors. This is often a reason why some people go with a chapter 13 even if they could do a chapter 7 as it does not force liquidation of assets to pay creditors, so you could keep the house if you have substantial equity.

Also the garnishment is it a domestic support payment like child support or some such? If it is from a creditor who got a judgment on you then that could be removed as well.