3-5 years? How is this decided?

[Jupiter8]

How do they decide if you pay 3, 4 or 5 years into your chap 13 plan. Also, what if theres a retirement during this time?

[falken]

If you will be paying back 100% to unsecured you can be in a 3 year plan (if with your DMI you can afford to pay it back in that amount of time).

If you are paying back less than 100% then you will have to be in a 5 year plan.

[Moderator's Note - this is not correct. See Justbroke's reply below for the correct information about 3 vs 5 year plans.]

[justbroke]

How do they decide if you pay 3, 4 or 5 years into your chap 13 plan. Also, what if theres a retirement during this time?

The prime factor which controls whether it's 3 years of 5 years, is whether you are under the median income, or over the median income, respectively.

Now, the shortest period a Chapter 13 can be is 3 years if you're under the median income. Being over the median income requires that you are in a 5 year Plan.

Some under the median income debtors may need a plan greater than 3 years to cure mortgage arrears or deal with taxes.

The only way a over the median debtor can be in a plan less than 5 years, is to pay 100% to unsecured creditors.

The only way any debtor can be in a plan for less than 3 years, is also to pay 100% to unsecured creditors.

If you retire during the plan commitment period, you may need to have your Confirmed Plan modified, to deal with your change in income. However, if you tell your attorney up front when you're retiring and if you "know" what your income will be... then you can write your Plan with "steps" in your payments.

[catalina2225]

I am well over the median and I am in a 3 year plan. I have 14 months to go. I am not paying 100% and the only secured debt I had was 3500 balance on a used car. Maybe there really are differences in states, counties and trustees.

[justbroke]

I am well over the median and I am in a 3 year plan. I have 14 months to go. I am not paying 100% and the only secured debt I had was 3500 balance on a used car. Maybe there really are differences in states, counties and trustees.

This is by Federal Bankruptcy law so it's not different.

How much unsecured debt did you have?

[Billssuck]

I am in a 3 year plan as we were $800 below the median income. Our is very close to 0 percent pay back as our attorney and trustee fees will take almost all of what we are paying into the plan. I hope it doesn't change before confirmation of our plan in about 60 days.

[jade73]

How do they decide if you pay 3, 4 or 5 years into your chap 13 plan. Also, what if theres a retirement during this time?

We went in yesterday and are below the median income, all our unsecured debts are wiped and we are only paying back the past due on the mortgage. He asked us if we wanted to do 36 months @ $170/month or 60 months @ $110. We choose 36 months. We are in Georgia.

[tra2555]

Thanks to all

[Skipper]

The prime factor which controls whether it's 3 years of 5 years, is whether you are under the median income, or over the median income, respectively.

Now, the shortest period a Chapter 13 can be is 3 years if you're under the median income. Being over the median income requires that you are in a 5 year Plan.

Some under the median income debtors may need a plan greater than 3 years to cure mortgage arrears or deal with taxes.

The only way a over the median debtor can be in a plan less than 5 years, is to pay 100% to unsecured creditors.

The only way any debtor can be in a plan for less than 3 years, is also to pay 100% to unsecured creditors.

If you retire during the plan commitment period, you may need to have your Confirmed Plan modified, to deal with your change in income. However, if you tell your attorney up front when you're retiring and if you "know" what your income will be... then you can write your Plan with "steps" in your payments.

Hi JB,

What if during the commitment period (let's say half-way through) there is an unexpected change in income (gets a raise) that puts the debtor above the median income at that time? If he is in a 36 month commitment period, does he have to then extend it to 60 months, or does the amount paid to the unsecured creditors just increase due to the increase in disposable income and the commitment period stays at 36 months?

TIA

Skipper

[justbroke]

What if during the commitment period (let's say half-way through) there is an unexpected change in income (gets a raise) that puts the debtor above the median income at that time? If he is in a 36 month commitment period, does he have to then extend it to 60 months, or does the amount paid to the unsecured creditors just increase due to the increase in disposable income and the commitment period stays at 36 months?

The commitment period is set upon confirmation. They can't increase it because you earn more later. They can, however, have you pay more of your disposable monthly income (DMI) into the plan until you hit your 36 months (or commitment period).

[joek]

Justbroke is very correct on his laws. I am banking on what he says about the commitment period of 60 months if over the median income. I am over the median income with unsecured debt. My attorney tells me I will be complete with my plan about 14 months proir to the 60 months after he objected to a secured amount. I ask him a couple of times if he was sure of this, same answer each time. According to my attorney i will be paid out in January of next year @ a 0.00% order to unclassified unsecured creditors, well below the 60 month plan. I do know that justbroke knows his laws, so i am not counting on a early payoff. But i am also in Georgia lol, maybe it can happen down here . Thanks justbroke for helping me understand the actual laws

[justbroke]

According to my attorney i will be paid out in January of next year @ a 0.00% order to unclassified unsecured creditors, well below the 60 month plan. I do know that justbroke knows his laws, so i am not counting on a early payoff. But i am also in Georgia lol, maybe it can happen down here . Thanks justbroke for helping me understand the actual laws

Your getting out early is "possible" if the Trustee agrees... otherwise, it will be a fight to get out early. It's the Trustee who tells you that your "base plan" has been completed and that they are closing the case (starting the audit). There was one poster who was in a 0% plan and was actually able to get out early!

The key will be the Trustee, your District and, should you run into resistance, how much you and your attorney will want to fight. If you fight, it will be to modify your confirmed plan. Since we're both in the 11th Circuit, it would be interesting if you do, indeed, get your discharge after completing the payments to the secured creditors in your 60-month plan.

[joek]

thanks justbroke, you have guided many of us on here. I just wish i had found this forum before i had been in my plan for over 3 years. Who knows i may could have assisted others like you folks have, and once again a big thanks to all mentors, moderators and every one who has contributed to sharing the knowledge they have gained. Whether I am in the plan a couple more months or several months i will continue to read and post on here. When i was doing a web search for bk asssistance and info, no other site that i found comes close to this one with answers and support

[signal]

Regarding over or under the median income. I was told, that if you are under the median income, BUT you pass the means test, and yet file a Ch13, then you will be in a 3 year plan. I had heard this from many places. Not saying this is true, but just wanted to throw this out there since being over/under the median and passing/not passing the means test are two different things.

[overspent]

3 year possilble eiwth negative DMI

From what I 've read:
the law of the land in the Ninth Circuit (Alaska, Arizona, California, Hawaii, Idaho, Montana, Oregon, Nevada, Washington, Guam, and Northern Marianna Islands) because of a landmark case, Maney v. Kagenveama (In re Kagenveama), 2008 U.S. App. LEXIS 13299 (9th Cir. Ariz. June 23, 2008)

it's posiible to have a 3-year plan if you have a negative DM on your 22C. I'm slightly over median income for my state (OR). The two attoneys I talked to both indicated I can have a 3-year plan since my DMI on 22C is negative 300.00.