confusion

[bkstuff]

I am a little confused. I have read a lot of post today and I have read that some people pay off the CH 13 early. How does that happen? Is it a payment or an "amount owed" that gets established at the start (or both)? I assumed that if income went up, payments would have to go up too....therefore no extra income to pay off early.

I'm sure I may find my answer if I look here long enough.

Thanks!

[klandsb]

Yes you will find many, many threads on this issue. I am no expert and can only tell you what I have learned from my hours of reading on this site. I guess before the bk laws changed in 2005 you could pay it off early. Since then the only way u can pay it off early is if you are in a 100% plan. Meaning you pay all of your debt 100%. Saying that, most of us, would not be in a Chapter 13 if we could pay off the large debts we have . I hope that sounds like I want it too and no one gets offended...
I have wondered what would happan if by chance (long shot) you hit the lottery or maybe inherited a large sum of money from a family member u knew nothing about (ha,ha, another long shot) . Would they take the money to pay back everyone at 100% and be done with it ???

[catleg]

You only have to pay off creditors who have filed a claim. So if you somehow end up with enough money to pay off the claims at 100%, you're done.

[klandsb]

P.S. It is a payment that gets established for the 3 or 5 yr term of your plan. Its all calculated from the means test (either state or federal guidlines) which you can take online yourself to get an idea of your DMI (disposable mthly income) and also the I & J schedules that your attorney will compile with the information you provide him of your mthly income vs expenses and see what your DMI is from that and between the two they come up with a pmt amt ....

[bkstuff]

OK- That helps.

I did find some info on the means testing....but for someone like us who have never really had a "budget", it is really hard for me to estimate what we actually spend on what..... That sounds really pathetic doesn't it?! So is this where the IRS guidelines come into play (to help establish a budget) or do we need proof of what we pay?

One more question. If we file and our 2nd mortgage is stripped (should be), does our 5 year payment still pay to the "eventually" stripped 2nd mortgage also? OR does it get stripped before the payment is made, and ch 13 completed?

You are all very helpful. Maybe one day I could play it forward.

[klandsb]

My thoughts are if you strip your 2nd mortgage it becomes a unsecured creditor so they would get whatever percentage of payback your plan calls for .. Example: mine is 40% payback to creditors ...So in simple terms I am paying back 40% to unsecured creditors over 5 yrs...but then you have to add in the trustees % and the attorneys fee to that.
My attorneys fee was approx $ 3700 (not sure exact figure) I had to pay an upfront retainer fee and then the balance gets put into the plan...
Also, you can get your states max expenses online ...meaning the max allowed for your family size and try to figure out what you pay for what... Also, they allow for such things as drycleaning, pet care, recreation ect....I know its timeconsuming but there are great threads on here and by searching you can find other members experiences with the expense part and what they put and also the exemption part. And dont forget to look at the "stickies"... There is some really great info in those threads..
I was so uninfomed about all this stuff when I started out but am making progress as time goes by...There are great moderators on here and will chime in and give you great information.... Patience is the key and I am very short on those when I am stressed out .. And yes, this has stressed me to the max

[bkstuff]

Are Auto loans usually included in the Ch 13 plan if you are up to date and owe about $7000 (another 1-2 years)?

[sofarsogood2]

Depends on the type of debt- secured vs. unsecured and what type of recourse is available to the secured creditors. For secured debt, in some states, the creditor gets the collateral and thats it. You can pay off the unsecured early if the debt is not really high and the trustee allows it. Your attorney could advise you better on the trustee in your area.

[tigergem]

Are Auto loans usually included in the Ch 13 plan if you are up to date and owe about $7000 (another 1-2 years)?

Auto loans are fun. If you purchased the vehicle more than 910 days ago you can request valuation of the asset and request to repay the nada book value at a reduced interest rate over the course of the loan. I read somewhere prime + 3%.

[klandsb]

I had 3 yrs left on my auto loan and I honestly cant tell u what the interest rate was.. They have stretched it out to be 5 yrs with 6% interest (which I think is higher than original but whatever).... the only thing that worries me is my Jeep w/be 10 yrs old before its paid off. Luckily it has low mileage and I havent had any problems with it..