payment plan

[frankies_mom]

If you are only in arrears on your first mortgage, how do you figure out your payment plan? We have no other debt. Do you just divide the arrearage by 36/60, whichever is allowed? Also, how is the trustee's percentage figured in? Is that on top of your payment? Thanks for your help!

[optimistic1]

If your only debt is arrears, why even file BK13? Is your lender not working with you, you should try every other available option first.

Your plan basically would be a 100% plan, meaning 100% of your debts are being paid into the plan, nothing more.

Determine if you are above or below median income for your state, then determine if you have any reachable assets that exceed your state exemptions.

The trustees fee, just 10% as a ballpark figure, would need to be factored in. Let say you owe 10,000 in arrears, the trustee's fee is 10%, or 1,000, so your plan would need to pay 11,000.

Keep in mind, that you need to have enough disposable income to fund the plan, otherwise you will need to revisit your expenses, but you can go too low or your plan is simply not feasible.

[frankies_mom]

thanks optimistic1! i realize i should have included in my post after. we are doing the 13 to now strip the lien on our 2nd mortgage. already been through a 7.

[momofthree]

You technically have debt then. The 2nd will be stripped and be considered "unsecured debt." Your payment will therefore be your DMI, as is standard in a chapter 13.

[SMinGA]

As to your other question - your trustee will take a % of all you pay in. The % is based on your district. Mine takes 5.4%, I've read about some up to 10%. So if you end up with a payment of $500 a month and if your trustee's fee were 7%, then of every $500 paid your trustee would keep $35 and the rest would go to creditors.

I think there are a couple of things to look at in determining your payment. One is the minimum amount that must be paid in order to make your plan work. Sounds like that would be your mortgage arrears, enough to cover the trustee fee, and attorney fee if any is being paid in the plan. Your net income less expenses x the length of the plan needs to be at least enough for those things. Personally, we are eligible (based on income guidelines) for a 36 mo plan but cannot afford a payment high enough to get it all done in 36 - our vehicle must also be paid off in full in our plan - so we are doing 60.

[optimistic1]

So you are doing a Ch.20?

[frankies_mom]

yes, a chapter 20. thanks all for your posts. i think i got it now. our attorney said we will be in a 60 month plan to pay back our arrears. he did say there is no penalty for paying off early. so hopefully by next tax season we can be almost there.

also, we did pay all of our attorney fee so none of that will be in our plan.