Need help with chap 13 procedures

[maxwell18]

I am new and thinking about filing chap 13, have lawyer paid $500.00 to start. Lawyer is a joke and his asst is also. Can somebody tell me how the payment is determined? I think this is the way it go's. Take all your income, take the authorizied exemptions from it and what leftover is disponsible and go's to the payment. I am current on everything. Does it matter how much debt you have like we are going to repo a motorhome and a boat and know they we will be charged for what they sell for and what we owe. We also know we will be a 60 month plan. The means test the lawyer e mailed indicated we will pay $3000.00 plus and the admin fees. They say the over all don't matter it all is the disposible and what gets paid. I asked them where estimated $40.000 default from the motorhome and boat is on the means test, don't worry it does not matter? We are going to strip out the second on the house first mort is 230,000 and second is 60,000 current appraisel is 190,000. One last thing, what money do you get or have between the disponsible and the bills you are paying which I figure is very little.
Thanks very much

[klandsb]

There are 2 different forms they use to determine your pmt amount. The means test is based on the IRS standards. The I & J schedules are your actual mthly bills such as utilities, Cable,Food,Clothes ect... So you take your mthly incomes , minus, your mthly expenses and come up with a DMI (disposable mthly income).. The I & J numbers are tweaked depending on your actual bills... There are many, many threads on this subject and sometime when you have some free time to go thru them it would be a big help to you... Also, there is a thread about % payback does not matter in the Chapter 13 forum. Its a must read for beginners !!!
As far as stripping loans and such I have no knowledge. Did not apply to my case.
Other veterans will chime in I am sure....

P.S. When my lawyer first told me my pmt amount I almost fell off the chair .. Here my secured creditors hse,helco,car are being paid thru the plan and are included in that amount.

[lrprn]

Welcome to BKForum - glad you found us!

Lawyer is a joke and his asst is also.

How did you reach this conclusion?

Can somebody tell me how the payment is determined?

Your lawyer plugs in figures into the Means Test (some major ones determined by bk law, and some your real figures) to see if you have disposable income. If the Means Test shows disposable income, then your lawyer completes the required Schedules A-J where your real figures can be used.

Here's the kicker though - what expenses you are allowed to claim can vary between bk districts across the country. For example, the motorhome and boat assets you plan to surrender at filing - since you intend to surrender them, in some districts the current payments for them cannot be included in your Means Test and Schedules figures. In other districts they can be included. Crazy, I know. But that's how prior case law decisions in districts that end up with different decisions around the same issues works in the US.

They say the over all don't matter it all is the disposible and what gets paid. I asked them where estimated $40.000 default from the motorhome and boat is on the means test, don't worry it does not matter?

From this comment, it sounds like you may be in one of the districts that doesn't allow you to include the payments for these on your Means Test. That could increase your disposable income considerably. You need to ask your lawyer about this, and don't walk away until you have an answer you understand.

We are going to strip out the second on the house first mort is 230,000 and second is 60,000 current appraisel is 190,000.

How did you arrive at your current appraisal? When stripping a second mortgage, some bk courts will only accept a certified appraisal. This is another question to ask your lawyer.

One last thing, what money do you get or have between the disponsible and the bills you are paying which I figure is very little.

Ch 13 plans are created by establishing how much disposable income you have *after* paying your secured asset payments, other required payments (child support, for ex), and living expenses on your Means Test and Schedule I minus J. Whatever your disposable income (aka DMI) calculates out to be, that becomes your Ch 13 payment.

How much money you end up having to live on after paying everything depends on how good a Ch 13 plan your lawyer comes up with. That's why you need to find an experienced bk lawyer who files lots of 13s that you have faith will represent you well. Designing a liveable 13 plan for five years is much more an art than a science.

Since you've already said your lawyer "is a joke", this is *not* a good way to start. How many bk lawyers did you interview before picking this one?

[maxwell18]

reply

Thanks for the info. The house value came from a appraisal as we were thinking about a refin, but came in was too low for first not counting the 2nd. I have interviewed two att. The one we are working should be a used car saleman. All promises little results. Attemps to out talk you instead of listening. Got a half ass draft of a chap 7 means test, but we all know including him we have to go chap 13. The means test does not show the motorhome or boat payments or even the second mort. We were very interested in the payments but the chap 7 form was not filled at that point. He keeps telling us we are making too much of this don't worry, let us do our job? I am still wondering if he was doing his job why did his asst e mail the wrong form. I have not been able to ask that question they closed till the 4th of Jan. He claims many years of BK experinace (that why we picked him) he looks the part. After reading what they e mailed means test and they only list what the IRS allows not using any data that we gave them to plus up the
numbers we will be in the hole after paying everything?

[NoTomatoCan]

The means test does not show the motorhome or boat payments or even the second mort.

I am definitely not an expert (just beginning my BK journey) but my attorney did not incude our 2nd mortage (we are planning on stripping it) or the payments on any property we are surrendering.

I guess in a way that makes sense. If they are not ultimately going to be part of your budget, why should you include them in determining if you are able to fund a CH13?

Yeah, it makes so that you have more DMI to potentially fund a CH13, but if you weren't going to keep those assets anyway, then it seems like a fair representation.

I follow the logic on the property that is going to be surrendered, but the lien strip on the 2nd mortgage hasn't occurred yet. What if it fails? Then I am still responsible for the 2nd mortgage and the corresponding payment.

I know that my DMI would then be adjusted, but it just seems odd to not include it upfront until it is stripped out.

Multiple lawyers I have spoken with in the area all say that is how it is done here, so (not being the expert) I trust their judgment.