Monthly Payment

[LIENSTRIPPIN]

We live in Florida. Will our Chapter 13 fly with $100 a month payment to the trustee?
From what I understand there is not a "minimum payment". We are stripping 2 mortgages with a total of approx $90K and a cc with a balance of $10K. And knowledge is appreciated.
Thanks!

[LadyInTheRed]

If $100 is all of your disposible monthly income and $6,000 ($100 x 60 months) is enough to pay at least your trustee fees and any attorney fees being paid in the plan, plus any non-exempt assets you are keeping, it will fly. This assumes you are in a 60 month plan and have no secured creditors that need to be paid other than those you are paying directly (the stripped mortagages are not considered secured). If there are any arrears included in the plan payment, that needs to be covered by the $6,000 too. One attorney (in California) told me it is good to include a "token amount" to unsecured credtors, but she didn't get into what she considered an appropriate token.

I think the biggest question is whether the trustee will have any problems with your claimed monthly expenses that are used to calculate your disposible income.

[justbroke]

We live in Florida. Will our Chapter 13 fly with $100 a month payment to the trustee?

No one can determine that without assessing the calculation of your current monthly income and disposable monthly income (DMI)... also known as the Means Test (Form B22C).

There are even more factors than just DMI which can affect your payment. You will probably need to pay your mortgage (first mortgage) through your plan as well as any cars. This is the default for Florida, unless your attorney asks the court to allow you to pay outside the plan. The only way you can pay outside the plan would be if you are current with those creditors.

[LIENSTRIPPIN]

All of our debt included in the bk is unsecured. So that it good. From what our atty tells us our 1st mortgage and car payments can be paid outside the bk because we are current. Here is my proposed monthly budget:


Fixed Income:
Income 1(net): 3,600.00
retention bonus(net): 290.00
Total Fixed Income: 3,890.00

Fixed Expenses/Investments
1st Mortgage: 1,017.00
Auto 1: 178.00
Auto 2: 225.00
Car Insurance: 101.00
Home Owners Ins : 70.00
College Fund: 102.00
Portion of mortgage for dad: 60.00
Total Fixed Expenses: 1,753.00

Variable Expenses
Car Maint.: 30.00
Hm ph/Cell Ph/Cable/Int : 280.00
Clothing: 60.00
Electric: 250.00
school supples/act: 75.00
Entertainment: 200.00
Gas: 320.00
Groceries: 600.00
Medical co-pays: 100.00
dog food/supplies: 40.00
gifts/donations: 30.00
Water: 50.00
Total Variable Expenses 2,035.00

Total Expenses 3,788.00

Income vs Expenses + 102.00

[Billssuck]

My monthly payment is $125 but I live in Missouri. My DMI was $145.

[justbroke]

All of our debt included in the bk is unsecured.

This is a misnomer that I have to continue to correct everyone in a Chapter 13. Everything is "in" the plan. What's paid "outside" the plan and "inside" the plan has to do with payments, not what is covered by the plan of reorganization (the "plan"). So, if you intend to pay the mortgage outside the plan, then your attorney will motion for that to happen. As I wrote, you can do that motion when your secured debt payments are current, and you wrote that they are.

Everything else looks great. My main thing was just to let people know that while we toss around this notion of things not being "in the plan" they actually are. That's because anything you are keeping must be in the plan (plan of reorganization). I think something you missed is your lawyer fees that must be paid by the plan as well. Hopefully, the $102/DMI will cover the attorney fees. Your unsecured creditors may end up getting... nothing or close to nothing!

[LIENSTRIPPIN]

We are paying our atty $1400 up front and then the remainder will be paid in the plan @ $50 a month. I do not know the trustee portion yet. We are 6 months out from actually filing. Which will allow us to get an accurate income average.
I appreciate the clarification about the plan. I guess I should have said we are not making the payments through the trustee for the 1st mortgage and the vehicles.
I worked really hard on the budget as not to leave anything out- however in the end you only have so much $ to work with anyway!

[LIENSTRIPPIN]

My monthly payment is $125 but I live in Missouri. My DMI was $145.

How is your bk going for you this far?

[momofthree]

I asked my attorney if we could just pay attorney fees and trustee fees into the plan and he said that the trustee doesn't allow that. He said the trustee will just tell us to file a 7 instead, and we wanted a lien strip, so we're paying our car in the plan + attorney fees + trustee fees, which works out to $98/mo more than the car payment. We did end up in a 5-year-plan rather than a 3-year though...

[justbroke]

The Trustee in a Chapter 13 makes NO money if you're not paying something other than attorney fees. They make money based on what you're paying "inside" and through the Trustee.

[NeedOptions]

No one can determine that without assessing the calculation of your current monthly income and disposable monthly income (DMI)... also known as the Means Test (Form B22C).

There are even more factors than just DMI which can affect your payment. You will probably need to pay your mortgage (first mortgage) through your plan as well as any cars. This is the default for Florida, unless your attorney asks the court to allow you to pay outside the plan. The only way you can pay outside the plan would be if you are current with those creditors.

Can you tell me what the advantage is of paying, say a mortgage or a car payment through the plan versus outside the plan?

[lrprn]

Can you tell me what the advantage is of paying, say a mortgage or a car payment through the plan versus outside the plan?

The only advantage for cars is that it allows your lawyer to stretch your car payment out for five years - that can be helpful in certain circumstances (not many).

Keep in mind that your trustee is going to take his case administration fee % on top of any asset payments he/she makes for you. That means that if your mortgage payment is $1000/month and your trustee's fee is 10%, then your Ch 13 payment is going to include $1000 for your mortgage company plus $100 for your trustee - so your trustee *and* your mortgage company both get paid. Over the life of your plan, that's a *LOT* of extra cash to your trustee!

Some local trustees require that the trustee make your asset payments - frankly, that increases their incomes. Luckily this is not the norm. If there's no compelling reason for having your trustee make your asset payments, it's best to make those yourself directly to the asset's lender.

In case you are wondering what your trustee's monthly fee % is, it depends on when you filed and in which state. Trustee fees range between 2.5-10%. For example, if you file after March 15, 2010, then here's the link for this particular time period - http://www.justice.gov/ust/eo/bapcpa...3_exp_mult.htm. Just look up the state you filed in.

[NeedOptions]

It just seems like there is a huge conflict of interest when the trustee makes you include car payments or mortgages within the plan. Will I definitely be able to pay my car payments and mortgages outside the plan? I do not want to give the trustee 9.5% of those costs! Btw, all the car and home loans would be up to date and never late.

[justbroke]

It just seems like there is a huge conflict of interest when the trustee makes you include car payments or mortgages within the plan. Will I definitely be able to pay my car payments and mortgages outside the plan?

If you actually thnk of what the Chatper 13 Trustee's job is, you won't think it's a conflict. The reason why Chatper 13 Trustees are much much more forgiving and lenient on Chapter 13 debtors, is because the Trustee wants you to succeed. They represent creditors and the creditors lose if you fail. It's a win-win scenario if you pay on time and they can make sure you pay on time. So much so that my District agrees that wage deduction is the best way to keep a Chapter 13 debtor on track and that the Trustee has the power to force one on the debtor!

I was paying almost $600/month on Trustee fees alone. I was negative DMI and that really hurt. This is why I'm in a Chapter 7 now. If your secured debt payments are current, then you can always motion the court to allow payments "outside" the plan (not through the Trustee). These are usually approved without any hassle.

I mean, my Trustee was making $600/month to write about 10 checks.

[SMinGA]

From my perspective, these 3 expenses could be a problem. The 'portion of mortgage for dad' may need some explaining. If you're repaying a debt to your dad, that won't fly.

And $200 seems high for entertainment, though I don't know what would be considered reasonable in your district. Just thinking that $200 to entertainment and $102 to a college fund could be problematic.

College Fund: 102.00
Portion of mortgage for dad: 60.00
Entertainment: 200.00

One advantage of paying a car loan in the plan is the interest rate may be reduced. Another is that it could help you to 'afford' a plan. Some are not eligible to file ch. 7, such as if they did in the past 8 years. But they might not really have DMI. But if they're paying $400 on a car payment for 2 more years, that could turn into a $400 plan payment (36 mo or 60 depending on income in relation to median income). Pay off the car, a few dollars to unsecured and discharge the rest.