How is the payment amount for a Ch 13 plan calculated?

[olivies]

When devising the plan for a 13, how is the payment amount derived? We are behind in our payment, hoping to be able to cure it so it doesn't dismiss, but we have been telling our attorney all along that the amount is more than a struggle for us. I'm going to have them file an amended plan because we now have home schooling expenses for one of our children and increased vehicle insurance expenses with a newly licensed driver in the home, neither of which we had before. I'm not sure if this means we'll have to provide paystubs, etc to the trustee again either. (I wish our attorney would just return our calls already and give us some info)

[optimistic1]

Once you accurately calculate what your disposable monthly income is (ALL OF YOUR BILLS SUBTRACTED FROM YOUR INCOME), you multiply it by how many months your plan is, dependent upon if you are above or below the state median income.

This will give you a big number. Let say your disposable monthly income is $300, multiply it by 60 months (because you are above median), it gives you $18,000.

Now, the hard part for you.

You now determine what debts you have, unsecured, secured, tax debts, and you also will need to determine whether or not you have any assets that are not exempt. You need to value those assets and determine if you are keeping them or not.

Here is an example, an easy one

LINE #

1. Secured car loan, $10,090, value of car, $6000, this will be a secured creditor. The remaining $4090 will be a unsecured creditor. Proposed interest rate of 5%.

2. Tax debt of $3000. Just guessing an interest rate for tax, I dont really know about this part, lets say its 3%.

3. Assets that are not exempt, $1000.

4. Any attorney fees not completely paid in full, lets use an example of $1000.

8. Unsecured creditors totaling $20,900

Now is where you can use this tool,

http://www.trustee13.com/fundwiz/

Once you calculate your disposable monthly income, you will input it into the first section. Lets use the example I gave you above, and enter 60 months and 300 per month.

Now in the next section, you will enter in the credit claims as above, but you use payment order #8 for the unsecured claims.

Upon completion of you entering in all the data, it will tell you whether or not your plan is feasible, but this is just one part of filing a bk, your payments could change this way or that way depending on a variety of variables not be discussed here.

It will also automatically calculate a trustee fee of 10%, so you need not enter it as a claim.

Lets complete the example in the funding wizard.

My end result says

Your proposed Plan is Adequately Funded.
Your general unsecured creditors will receive $4,663.96 or 19%.

If you use this tool, it will help you determine whether or not your plan will work, your 13 will work or not, because if it wont, then you will need to revisit your expenses, your assets, leftover attorney fees, tax debt you could take care of now or later, and so on and so on. It really makes some people think about whether or not they should be keeping their house or not, because it sometimes will tell you that you need more disposable monthly income to fund a plan with a variety of debts, and to do that, you have to start looking at your living expenses. That means cuts into things like food, electricity, the mortgage, things you wouldnt consider changing, but to get your discharge, you would do anything to make it work. Ok. I am blabbering now.

Have fun with this tool, its what BK attorneys and some trustees use, I feel sorry for the ones who do this by hand.