Pros and cons of a 100% payback plan?

[zenbit]

After spending much of the year going back and forth on this, I have finally gotten to the point with my attorney where we are ready to file... as early as next week.

In many ways - my case is simple. There's about 124k in debt, in which the atty is including 45k in student loans (didn't know student loans could go into a Ch 13 repayment plan, even though I realize that if there is a remainder at the end - it won't be discharged).

I am letting go of my home. I have no assets. What I *do* have, for now at least, is a high income. There are no guarantees, of course,

So he wants to go in with a 100% repayment plan. Which, from a pure karma / catholic guilt perspective, I like. What I need is a rational, business perspective. I like my attorney, but he's getting flat rate to handle this for five years - so I can see how he would tend to want simple vs complex as a solution.

Here are my assumptions, maybe you guys can help me here.

Pros to a 100% repayment plan:

* The trustee will approve it without much debate / negotiation. No haggling.

* After I am in the plan, if I make a little more money along the way, it's less likely that the trustee will stir up any trouble.

* In general, I would expect this to go smoothly - assuming I can make all of the payments on time.

* Are there are other pros I am missing?

Cons:

* My primary concern is that I am taking on too big of a payment.

I can easily live with this payment here for the next few months. But I need to find an apartment and move. I have two children to take care of. I have some savings prepared for that, but am really anxious about the next year or two.

My confidence level is about 90% that I'll be in better shape in the coming years (1 to 2 years out - after the move), barring the unexpected and unforeseen (aren't those always the things that get you in the end though?). I understand that if I lose my job or some other big event happens, I can go back and adjust the plan - or convert to Ch 7, but I am not sure how easy or hard that will be to do.

So - do I bite the bullet now and take the 100% repayment plan and hope for a quick resolution and smooth sailing ahead? Or do I dig into the details of my budget and fight for a lower payment and end up with the trustee maybe breathing down my back for five years? Or am I way overgeneralizing this and making false assumptions?

[forgotten]

My confidence level is about 90% that I'll be in better shape in the coming years (1 to 2 years out - after the move), barring the unexpected and unforeseen (aren't those always the things that get you in the end though?).

That line of thinking is what got a lot of us here. The assumption you will be in better financial shape in a year or two and can worry about it then.

Take what you think you can live with for the next 5 years not what you can live with for the next 6 months until things get better because that often doesn't work out.

Just my advise.

[zenbit]

Thanks forgotten. It's a good point - that this is the mindset that landed me in this spot, at least to a degree. There was also a divorce with an expensive custody battle, and the death of both of my parents... so I guess a part of me is feeling like the worst that life has to offer is somewhat behind me. There's definitely no safety net left, which is why I feel so anxious about this.

I'll focus more on my budget and try my best to plan and budget for the move. It's the unknowns with the move that really have me worried.

I was just wondering if there's much of a difference between a 100% payback plan and let's say an 80% or 90% plan when it comes to dealing with the trustee and the attorneys over the life of the chapter 13 plan.

From what I am learning - it seems that whatever the agreed amount repayment amount is - that amount doesn't go up even if circumstances change for the better. On the other hand, if circumstances get worse, it seems that my monthly payments can go down, so I am guessing this means the end repayment amount also goes down.

If I have this right - this also says I should go in fighting for the lowest monthly payment which means the lowest overall payment amount, because it won't go up over the coming 5 years.

I definitely more homework to do.

[daytona]

An Attorney I met with earlier this week suggested the same thing with a 100% payment plan...In his word it is WAY easier to get approved and they hardly look at anything. I have a large sum of $$ coming to me in a few yrs that I must disclose, so I have no choice but 100%...and as you stated if something changes it can always be lowered. I will have low payments until the money comes in a few yrs and then will be done with the plan way early. Basically it takes all of your unsecureds and makes them a 0% "loan" until you pay them off....not a bad deal vs. things accruing at 20-30%. If done right you have no liability on any "secured debts" to make them "unsecured" to be part of the payments...

[zenbit]

Made it through the 341 mtg - no problems!

Hi all,

Just thought I would drop by with a quick update.

I worked with my atty and we came up with a 100% repayment plan. Didn't know they could do this - but he even folded in my student loan payment, which is just nice to not have that extra bill to pay.

If all goes well, and I know that's a significant "if", I am looking at being DEBT FREE for the first time in my adult life in 5 years!

The 341 meeting was a breeze, by the way. It was only my attorney and a representative of the Trustee that was present. They swore me in - asked some questions, confirming what was filed, and that was it. Done!

One thing I didn't realize - they asked me to start making plan payments right away after we filed... even before the 341 mtg.

If it helps anyone to know this - I am in Illinois, county of Kendall

I can't describe what a relief it is to have this behind me. There are no bill collectors calling, and I have a solid plan in place. Now, I just have to budget, budget, budget, and save, save, save!