100% Payback....

[zeezee]

So all this time I thought I was in a 60% payback and I just looked at the 13 Data Center site and it has my plan listed at 100%!!! (I thought my numbers were looking funny). This is a good thing I guess...my payments won't be higher than $1521 for 60 months.

My school loans make it look as if I am not paying all of the creditors, those are being paid outside of the plan, however they still included them in my overall total of unsecured debt. Subtracting the 33k in school loans leaves the 94k which is what I am paying back.

Anyway, my question now is, what is likelihood that the trustee will question my expenses? I ask this because on the means test it looks like I have over 2500 a month DMI but of course when we did the actual expenses it came out to 1521 (which is the proposed plan amount).

Does it even matter now what my expenses are since I am paying everything back?

[lrprn]

Anyway, my question now is, what is likelihood that the trustee will question my expenses?

Once your Ch 13 plan is confirmed, as long as your payments continue to come in on time and you ensure everything your trustee asks for is sent on time by your lawyer (for ex, your annual tax returns if your trustee is one that wants those), then the chances of your trustee looking at your expenses is very, very small.

Ch 13 trustees have many, many filers they must adminster every month with new filers coming all the time. They just don't have time to keep up on the small financial details of everyone. Only if the trustee suspects something is fishy (and pretty big fishy ) will he/she come back and look things over again.

[ccfriend]

On the website mine says 100%. I am only really paying 33 %. I was told that the 100% means that all payments that come in after my lawyer was paid go 100% to unsecured debt!

[zeezee]

On the website mine says 100%. I am only really paying 33 %. I was told that the 100% means that all payments that come in after my lawyer was paid go 100% to unsecured debt!

Yeah, but mines is really 100% because I'm paying my lawyer, trustee and ALL of the $90k + that have in unsecureds....

[justbroke]

The reason HHM has a thread that the percentage doesn't matter, and why I'll echo it here, is because it's based on allowed filed claims. Your dismpsosable monthly income is what it is, that will likely not change.

The reason the percentage changes, is because at first, you list the percentage based on all your unsecured creditors filing. Example, you file a Chapter 13 with $100K in unsecured debt. Your DMI is $1,000/month. Your "percentage" is therefore 60% (over 60 months). However, some unsecured creditors don't file to the tune of $40K. Now your percentage is 100%.

Also, since your District may require tax refunds to be turned over to the Trustee, the percentage may actually increase without anything else happening. This is because you did receive extra income that's above your allowed expenses. That extra income, the refund, is paid to the unsecured creditors. You don't just magically get discharged once you hit that magical 60%. You get discharge when you pay 100% or your plan period has ended.

[zeezee]

"Your DMI is $1,000/month. Your "percentage" is therefore 60% (over 60 months). However, some unsecured creditors don't file to the tune of $40K. Now your percentage is 100%. "

So if all of my creditors don't file a claim on the $90k that I have to payback, will my payments be lower or will I get a refund at the end of my ch13? How does that work? If I'm paying $1,521 a month and say only $50k is claimed, will my payments go down to $833 a month or if not and pay the whole $90k into the plan, will I get a refund of $40k in the end?

[justbroke]

So if all of my creditors don't file a claim on the $90k that I have to payback, will my payments be lower or will I get a refund at the end of my ch13? How does that work? If I'm paying $1,521 a month and say only $50k is claimed, will my payments go down to $833 a month or if not and pay the whole $90k into the plan, will I get a refund of $40k in the end?

Not necessarily. Here's why...

The Code states that unless you're paying back 100%, you have to surrender your "disposable monthly income" (DMI) to the custody and control of the U.S. Trustee for payment to unsecured creditors. There was a recent case in which a person is paying back 100% but not committing his/her entire DMI. This would be good for people in 100% plans.

Your mileage on this will vary based on your District and your Trustee. If you do end up with $50K filing, then it would be appropriate to have your attorney motion to modify your confirmed plan (or amend your unconfirmed plan) to just pay 100% over the term of your plan.

[zeezee]

Not necessarily. Here's why...

The Code states that unless you're paying back 100%, you have to surrender your "disposable monthly income" (DMI) to the custody and control of the U.S. Trustee for payment to unsecured creditors. There was a recent case in which a person is paying back 100% but not committing his/her entire DMI. This would be good for people in 100% plans.

Your mileage on this will vary based on your District and your Trustee. If you do end up with $50K filing, then it would be appropriate to have your attorney motion to modify your confirmed plan (or amend your unconfirmed plan) to just pay 100% over the term of your plan.

Sheesh! This is making me sick! So in essence, I will have to wait until after the claims deadline to know what I am actually going to be paying back to creditors huh?

Am I on the right track with that? Thanks for the responses, I think I understand...

[justbroke]

Sheesh! This is making me sick! So in essence, I will have to wait until after the claims deadline to know what I am actually going to be paying back to creditors huh?

No. You have to think like HHM writes. What you payback to the creditors is "technically" irrelevant. What your "disposable monthly income" (DMI) ends up being, is what's relevant. Your unsecured creditors are paid from your DMI.

Am I on the right track with that? Thanks for the responses, I think I understand...

When people start worrying about what percentage they are paying, this is what happens... they start worrying unnecessarily. For a Chapter 13, especially one filed with a competent attorney, your budget will be well adjusted. Your DMI will be the lowest it could be.

In a Chapter 13, you pay your calculated DMI unless:

1. You are paying 100% back to the unsecured creditors.
2. Your DMI times your applicable commitment period (36 or 60 months) is MORE than your scheduled unsecured debt.
3. All of your unsecured creditors don't file and you are now in a 100% plan.

[zeezee]

"In a Chapter 13, you pay your calculated DMI unless:

1. You are paying 100% back to the unsecured creditors.
2. Your DMI times your applicable commitment period (36 or 60 months) is MORE than your scheduled unsecured debt.
3. All of your unsecured creditors don't file and you are now in a 100% plan."

Yes, this is exactly what I'm saying. If you deduct $33k from my 128k figure for unsecured s, I am paying back 100% of what I owe. The 33k is being paid outside of the plan so I don't count that, but they had to list it among my unsecured creditors.

But other than that I am paying back the full balance. So, here's hoping I catch a break and all of my creditors don't file a claim! Thanks so much for clarifying...again. (I told you guys I was a little thick)

[klandsb]

If you are a little thick then I am in the same club... This whole % of payback thing is confusing to me. I think I am just not in the right mindset or something..

Is it unusual for unsecured creditors to not make a claim ????
What if your DMI x60 is more then your unsecured debt ????

[justbroke]

Is it unusual for unsecured creditors to not make a claim ????

No. It is quite usual for some number of unsecured creditors to never file a claim in a Chapter 13. There seems to be no pattern at all. Creditors, in my case, from $1,000 to a $14,000 card with Amex, never filed a claim!

What if your DMI x60 is more then your unsecured debt ????

This depends by Districty. A recent Ohio decision shows that you can pay 100% over the 60 months, without committing your total DMI to the Plan. This is a good thing for debtors who are in 100% plans and don't want to commit all their DMI to get the Plan completed early. Otherwise, you'll pay your DMI until all allowed unsecured claims are paid to 100%.

[lrprn]

Let's use a simple example here:

You have two unsecured creditors. You owe $10,000 to Creditor A and $20,000 to Creditor B.

You file Ch 13 with a monthly payment set by the amount of disposable income showing on your Means Test and Schedules of $500/month. Your plan is set for 60 months and your payback % AT FILING is calculated to be 25%. This first payback % assumes that both Creditor A and Creditor B will both file claims and will be paid back through your plan until you pay 60 months as agreed.

Now, after 90 days, only Creditor B files a claim. Instead of your $500/month (minus trustee admin fee, secured payments, etc) being split between two unsecured creditors, now it's going to be given to just one - Creditor B.

This will increase your payback % to something higher than 25% because you are only paying back Creditor B in your plan. ***But as HHM explains in his payback % thread, in this case the payback % "increase" is a completely artificial one from your perspective!***

Your monthly payment will not change whether both A and B or only one files a claim. It just means that in the situation I just described, Creditor B will get a higher % payback from your $500/month payment because Creditor A will get $0 back from the plan - Creditor A did not file a claim.

You will pay your same confirmed Ch 13 monthly payment until Creditor B is paid in full or until you've paid 60 payments - whichever comes first.

Does this make more sense?

[klandsb]

Yes... That makes alot of sense.. I just cant believe that some unsecured creditors w/not file a claim.... All 100% of my approx $33,000 is in unsecured debt. I have kept everything else up to date hse, heloc, car...According to the means test I have $341 a mth in DMI...Of course my attorney says he can get that down but lets just say he didnt get it down. It could be that I pay $341 x 60= $20,460 back but after the trustee fee ect are taken out I will be paying back a little less to my creditors... But each creditor would get the same % of payback according to what I owe them ???
AM I correct???

[13inIN]

As long as they are all non-priority debts, correct.

Just a thought on the 100% discussion and what it says on the website(s)..
For those using with trustees on 13network.com, I think that the 100% is an automatic placement there. The software likely wasn't ever upgraded after the law switch in '05 and it still shows the percentage.... even though it's irrelevant to most cases. At least that's how I read it.