Schedule J

[Wantmypeace]

Is it Schedule J that is used in a Ch 13 to determine your disposable income? I'm looking for insight into how to get that total disposable income number down. I keep hearing so many things about how difficult it is to live on the budget that the trustees approve. Also, if I include my student loans in the ch13 (which I'm assuming I have to, since I have to list all debt), the loans will be paid right alongside the other debts, but not be discharged when the ch13 is done, right? So, if everyone gets 110.00/mo, and my normal payment to the sl company is 600.00, the other 490.00/mo will be capitalized and added at the end of the ch13? Is that right? Thanks!

[lrprn]

Is it Schedule J that is used in a Ch 13 to determine your disposable income?

Some bk courts use the Means Test to determine disposable income, and some use Schedule I minus J. You'll have to check with a few knowledgeable bk lawyers in your area to find out how your local court leans on this question.

I'm looking for insight into how to get that total disposable income number down. I keep hearing so many things about how difficult it is to live on the budget that the trustees approve.

Here's how to increase the chances you have captured *all* the legitimate Ch 13 expenses you can have on Schedule J:
* Check your expenses against the expense calculator here - http://www.goainc.com/fraley/calcula...alculator.html
* Go back through your checkbook registers, credit card statements, and bank statements for at least a year. You'll catch one-time and irregular expenses that way.

Also, if I include my student loans in the ch13 (which I'm assuming I have to, since I have to list all debt), the loans will be paid right alongside the other debts, but not be discharged when the ch13 is done, right?

Right. Also the student loan interest continues to compound for the length of your plan as well.

So, if everyone gets 110.00/mo, and my normal payment to the sl company is 600.00, the other 490.00/mo will be capitalized and added at the end of the ch13? Is that right? Thanks!

First of all, the Ch 13 trustee will disburse your scheduled payments in a very specific order:

1. Ch 13 trustee administrative fees. These fees are based on a set % that varies by state - see http://www.usdoj.gov/ust/eo/bapcpa/2...3_exp_mult.htm for your state's Ch 13 trustee's allowed administrative expense multiplier. He/she will take the designated % right off the top of your payments. (This is how Ch 13 trustees get most of their pay, by the way.)

2. Any court-ordered domestic support

3. Other administrative expenses (such as paying the remaining amount you owe your lawyer)

4. Ongoing payments on secured loans that are to paid by your trustee directly to the creditor using plan funds (mortgage arrears or car payments, for example)

5. Payments to other priority debts (IRS taxes, for example)

6. Last to be paid are general unsecured creditors that filed claims. No payments go to this group until all secured and priority claims are paid in full.

Student loans are paid last along with all your other unsecured creditors (credit cards, for example) and won't see a dime until your secured and priority debts are paid in full. Then the student loan gets the same % payment as all the other non-secured creditors get until your plan ends. Whatever remains at the end of your plan is yours to pay in full (and the interest still continues to compound).

In case you aren't aware, some trustees do not allow your student loan payment(s) to be included in your Schedule J expenses because student loans are typically placed in forebearance during your bankruptcy. Some trustees will allow the expense though - again this is a question you will have to ask several experienced Ch 13 attorneys in your area during your free initial consultations to find out what the practice is in your local court.

[13inIN]

Depends on the court, and the groups that you owe.

We were 'lucky' enough to have ECast representing the creditors tied to a large portion of our debt. We are above median income and there was quite a difference in the two calculations. Ecast contends that most courts aren't reading the law properly and thinks that we all can pay back much more.

We ended up proposing using I and J to determine a confirmable amount. Just be sure to include everything you can in your first expense budget to make it livable. Our trustee and Ecast took issue to any changes increasing those amounts thereafter without strong evidence.