Negative disposable income...

[Skipper]

Has anyone here been successful in obtaining a Chapter 13 confirmation with a negative disposable income and zero payments to the unsecured creditors because of it?

I am referring to anyone having used the 9th Circuit Court ruling as an argument for a confirmation without a timeline (3 or 5 year) or a payment.

TIA,

Skipper

[HHM]

Can't do it. You need to pay SOMETHING. You must show some disposable income, even if it is a $10 per month payment. The most recent rulings are not allowing debtors to do a disguised chapter 7 as a zero payment chapter 13.

But let's clarify, are you talking about a ZERO payment 13, or simply that you have priority claims (mortgage arrears, taxes etc) that WILL be paid but there is nothing left over for unsecured. If it's the prior (zero payment), then no. If the later, you have a shot, but even then, trustees will object if unsecured's are getting zero.

[tjs1970]

HHM........my attorney suggested that he has been able to do the latter in your above example with other clients, and not only that, but the plan was only 10 months!

I am hoping I can get a similar deal, but with my mortgage and tax arrears, there is no way we could pay that in 10 months.......it would have to be much longer.......

I will not be filing until at least after I get my NOD on the house, but that hasnt happened as of yet and we have not made either of our mortgage payments since March .......but if we are going to keep the house, the mortgage arrears will have to be paid anyways on the first mortgage .........right now our arrears are over 19k!!! that in itself may be reason for us to walk away from the property as we are going more and more under water each month.......

I would love to hear more input and feedback on this topic from anyone!

[HHM]

Please clarify what you are trying to accomplish with a chapter 13. What, exactly, did you attorney say he could do.

Are you going to save your home, or not; i.e. pay the arrears into the chpater 13. If, yes, then you will not be a zero payment chapter 13, but you could be zero to unsecured creditors. However, the other leg of a chapter 13 is feasibility. If you file a chpater 13 and have negative disposible income, and if someone objects based on feasibility, you will lose that objection 9 ways to Sunday. As mentioned above, to have any sort of payment in a chapter 13, even to pay prirority claims, you need to demonstrate the ability to pay your living expenses and the minimum payment you need to pay your chapter 13.