A few chapter 13 questions

[mnvikingfan]

Here are the facts in my case:

Our home is valued at $225,000. We owe $150,000. We have never missed a payment. Our payment is $1200 per month.

We have a student loan that we are paying $68 per month on for the next 15 years. We have never missed a payment.

We have a 403B (similar to a 401K) loan that we will be paying $400 per month for the next 4 years. We have never missed a payment.

There are five people in my family. We live in Minnesota.

Our monthly gross income is $5,000.

We have about $80,000 in credit card debt. We have never missed a payment, but it looks like that is about to change this week. We just can't keep up anymore.

We filed chapter 7 five years ago.


Questions:

I am currently putting about $300 per month into a health savings account because we have high-deductible health insurance. The balance in this account is about $1,400. What happens to this money when we file a chapter 13?

Will we still be allowed to contribute anything to the health savings account after we file chapter 13?

We own 4 vehicles worth about a total of $14,000. We do not have any loans on the vehicles We are allowed two vehicle exemptions of $4200 each. What happens to the other two vehicles in a chapter 13?

What happens if our payment plan isn't sufficient? In other words, is there a minimum payment required?

Does the 403B loan become part of the monthly payment plan?

Does the student loan become part of the monthly payment plan?

Does the mortgage become part of the monthly payment plan?

[pepperoncini]

I posted to you on another forum.

[SMinGA]

Most likely, your student loans will go into forebearance while in a ch. 13 - so you won't pay on them and that can increase your disposable monthly income.

As I understand it, 401k loan repayments ARE factored into your budget during a 13. But if you pay off the loan while in the plan then your plan payment may be adjusted once your disposable income increases.

I think funds in the health savings account would be secure, as to payments being made to the health savings that would most likely be fine to continue as well. Paying for necessary medical care is not a luxury.

You may end up with a 'minimum' amount that needs to be paid based on a few different factors:

1. Insider payments: if you've repaid family/friends recently, you would need to pay at least that much to unsecured creditors during your plan.
2. Non-exempt assets: you'd need to pay an amount to unsecured creditors at least equal to your non-exempt assets. Sounds like you have $5800 in non-exempt vehicles. Possibly more in your house - you listed $75k equity, but I don't know your state exemption.
3. Priority debt: if you have taxes, secured debt, atty fees paid thru the trustee these get paid ahead of unsecured debts.

The trustee also takes a %, between 5-10% depending on your district. To get confirmed in a 13, you must file a feasible plan. Meaning you need enough disposable income to pay enough to resolve those 3 points. If you had no priority debt and no minimum required to unsecured, then whatever amount of DMI you had would be fine.

At $60k gross annual income and a family of 5, I'm guessing you would be below median. Meaning you could do a 36 month plan. If you can't afford to pay off what you need to in 36, you could do a 60 if the #s would work that way.

[SMinGA]

Just looked up MN exemptions - seems fairly generous on homestead so your home equity should be fine.

If $5800 on the vehicles is the only non-exempt asset, then that would mean a minimum of ~$161/mo to unsecured over 36. If you pay your atty fee in advance (not in the plan) and your trustee charges the max of 10%, you would need DMI of at least $179/mo. For the vehicles, you would need to consult with your attorney to determine how your district values them. Mine uses NADA retail value - which is higher in my opinion than they're actually worth.