Doesn't this depend on whether you are over or under the median income for the past six months for your family size? Meaning below median=3 year plan and above=5 year plan? Or is it more complicated than this?
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Yes, it is that simple.
More accurately, if a family is below median, it has the "option" for a 3 year plan. Depending on the type of debts that need to be paid, a below median family can go up to 5 years. -
So this is a benefit, obviously? 3 years of the same plan as would normally be required for a 5 year plan? Or would it be 3 years at a higher payment versus 5 years at a lower payment?Originally posted by HHM View PostComment
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No, doesn't work that way.
Your payment, for the most part, is based on your disposable income, (income minus expenses). Thus, if your disposable income is $100 per month and you are below median, that debtor would pay a total of $3,600 into a 36 month plan. IF that same debtor did a 60 month plan, it would be $6,000.
The common reason a below median debtor would file a chapter 13 longer than 36 months is if they cannot afford things that MUST be paid in the plan. For example, lets say the debtor only has $110 in disposable income; but has $5000 in mortgage arrears that must be paid so the debtor can keep her house, That debtor would need a 50 month plan. (assumes a 10% trustee fee).Last edited by HHM; 01-30-2010, 01:07 PM.Comment
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