Non-exempt paid back as secured?

[rbaronex]

Hello All,

My plan with my attorney is about wrapped up. I have $400.00 per month of disposable income, but my BK13 paymet came out to $1100.00 per month. This is due to assets I own (45k non exempt) added to my 60 month plan. Given that I have only $400 left over at the end of the month (family of 4 in Arizona) how can I be given a payment that high? I was under the impression that the outcome of my payment weighs against what I have left over and available to offer up to a 13 payment. I have an RV worth $30k with no payments on it, which is causing most of my issue. I also have two other vehicals, one that is worth $7500 (no payments) and another that is worth $27k (owe $16k).

I take home 4k a month after taxes. 80k in CC's, the HELOC will be stripped (49k). primary home underwater by $40k, investment property paid $275k, worth $210k. Mortgage paid by renter.

Appreciate your input to this issue.

Thanks..

RB

[rrockinggramma]

well the law states that if you have non exempt property (rv and cars and investment property) then you owe your creditors the amount that is not exempted. In order to get that done in your plan it is 1100 a month.

Now if you are sure you cannot afford that then you will have to make some real decisions. Perhaps keeping the rv is just not in the cards.

Lifestyle changes are the hardest changes to come to grips with when one files bk. Everyone who posts here knows what it is like to have to walk away from something or to change the way they think about money and "things"

You are filing to protect your "things" but what the attorney is trying to tell you is that if you can't afford 1100 a month then you can't afford your things. Look at your budget of 400 left over. Can you tighten up more to come up with the 1100 to keep your things. Are you willing to do that? Sacrifice is the name of the game in bankruptcy.

You will need to make a "business" decision here. Either you suck it up and pay the 1100 a month and keep everything or you give up some of your things to pay less each month.

The bottom line here is that your life and your way of living is about to change.

[optimistic1]

First off, congrats on getting filed soon.

Second, these non-exempt value's that you came up with, how did you do that? Did you have them professionally appraised? They might be worth less (hopefully), and if so, that would drop your payment.

Third, your DMI (disposable monthly income), simply shows what you can pay to your UNSECURED creditors, which could be $400, or it could be $0.

If you have non-exempt assetts, they have to be paid for in your plan, otherwise you could give them up, but that is not what a Chapter 13 is all about.

[becky20]

I'm not an expert but wouldn't a trustee refuse to confirm a plan that is doomed to fail? If he has only 400 DMI and 1100 in payments due to the assets, wouldn't that be a plan filed in bad faith, since there is no way for it to work???

IMO you're going to have to either revisit the value of the assets to see if they are accurately valued - if they are, you're going to have to give them up (at least the RV probably) in order to bring it down to a payment you can afford. Sucks, but doesn't seem to be any other way around it.

[optimistic1]

No, because most likely his DMI is calculated using the B22 form. Which, his expenses may be less than that, hopefully not more, so his DMI might increase even more to cover the increased payment.

You can always re-visit your expenses that you incorporate into your plan to increase your DMI, to show that it is feasible. Obviously if you shorted yourself too much on food and such, it would look kind of desperate.

And, yes, the last option is to simply give up the non-exempt asset's to make the plan more liveable.

[rbaronex]

Thanks all. Appreciate the input..

Kind of figured this was the case. I will look into some decisions and see what works best. Thaks for all your input..

RB