Ch 13 payment?

[pete42]

My wife and I have just met with our bankruptcy attorney and are going to proceed with a chapt13. W have about $60,000 in credit card bills and are wondering what amount were going to have to pay back over the 60months?
Do you know how they come up with the monthly payment amount?

[muzzey58]

They calculate the figure based on your income, monthly expenses, debt, and number of dependents. We pay $1200 a month and don't own any property except an old 1999 Chevy Cavalier and a 2008 Mazda which is financed. My husband has a median income and I don't work right now.

We just missed filing for chapter 7 because of the change in bankruptcy laws in 2005. Our debt was $100,000 at the time of filing. Ohio's statue of limitation is a ridiculous 15 years to cancel out old debt. Most of my husband's old debt was nearly 10 years old and credit card.

We had a few secured debt such a car loan which was paid off in the bankruptcy. Our major debt is paid off already. My first attorney based our case on our total income which included my old job. I had to quit work in 2007 because of the back injury and we ended up having to modify our payments. We were originally paying back 80% at $1500 a month. We were barely living after I quit work.

We finally hired a new attorney and she petitioned the court to modify our plan at 55% and $1200 a month which is a bit easier. But, having a third of your income taken is not easy. Your attorney should be able to estimate your payments based on the means test. Which is the way the court will calculate your payments. Everyone is totally different. My sister paid only $300 a month and owned a home, but her husband is disabled and she works full time. So I believe they based her payments on her income.

Another factor is dependents and expenses. If you make below the means test then you will qualify for a chapter 7 bankruptcy. I would first strongly suggest to see if you qualify for a chapter 7 bankruptcy. If you don't own property see if you qualify. Just because you owe a certain amount of debt doesn't mean you have to file a chapter 13.

Chapter 13 was originally designed to help debtors protect and keep their property. It wasn't designed for people with just unsecured debt. The credit card companies lobbied congress to change the rules in 2005 to protect their pockets. Congress was backing the banks not the consumers. Thus, we're stuck with a ridiculous bankruptcy system that punishes middle class debtors without property.

We are nearly at the end of the bankruptcy less than 18 months! We will put the money in a savings account for retirement. We've lived over 40 months on a tight budget and have learned to live within our means. It hasn't been easy and we use lots of coupons and buy things on deep clearance. We buy our winter clothes in summer and vice versa. I've walked out of a JC Penney's with over $500 originally tagged clothes for less than $75. We put the clothes in storage and had brand new clothes for both of us for the new season.

My best advice is to contact your attorney and have them look over your case carefully and have them estimate your payments based on the means test. Good luck and best wishes.

[lrprn]

Pete42, I moved your question to here in its own thread. You'll get more answers this way.

My wife and I have just met with our bankruptcy attorney and are going to proceed with a chapt13. W have about $60,000 in credit card bills and are wondering what amount were going to have to pay back over the 60months? Do you know how they come up with the monthly payment amount?

When you file Ch 13, your lawyer will complete the required Means Test and Schedules. These are required forms that make a very complicated cross-comparison of your total income from all sources against some of your real expenses and some that are set by the bankruptcy law. If you show more than about $160/month of disposable income, then you must file Ch 13.

Your Ch 13 payment is either the amount of disposable income calculated on the Means Test or by subtracting Schedule I from Schedule J. Which one is used depends on local bankruptcy court customs or the court district you file bankruptcy in.

How much you'll end up paying back to your unsecured creditors (credit card debt, etc) depends on how many of them file claims to be included in your Ch 13.