How do they determine what about you payback?

[banannas]

Well, meet with our attorney yesterday about adding our house and second mortgage to our bk and of course it sent our payments through the roof.
(We got behind when our a/c went out and had to have that replaced.)
We are in a 100% payback bk and don't understand how others get 55%-90% payback? Don't get me wrong I feel better paying back the amount we incurred however the interest rates the freaking credit card companies have charged is usury. Good news is we have completed 2 of 5 years and can now focus on the other 3 without having to worry about losing our home. We just got a feeling the next 3 years are going to be extremely tough. Anyway just wondering about the percentages.

[TexasEx]

The percentage is calculated by how much you make, minus all your allowed deductions (which can vary by district considerably) and the amount of debt you owe. If your income minus deductions times 60 months are higher than your debt then you will be in a 100% payback plan. There is a sticky at the top that explains this rather well.

If your debt is higher than your income minus allowable expenses then that is where you start getting at lower percentages. What happens is that any money left over after all your expenses becomes as the "DMI" (disposable monthly income). You are supposed to turn over all your DMI to the trustee. The law says nothing about percentages, although I hear that some trustees have made up their own local rules about it (such as not allowing a payback of 0%, or being harsh if you do not pay back some specific %).

In my case because I have a rather large mortgage and plenty of other allowable expenses my payback percent came out to be about 20% (not counting a possible deficiency judgment on a second home we surrendered that was under water). If this bank does file the judgment (which is very unlikely considering our payback%) then all my unsecured creditors will get less than 5% payback.

[momofthree]

We are one of the few who are at a 0% payback. The reason for this is that we are well below median income ($20k below!) for a family of 5, and could have filed a ch.7. However, we wanted to strip our 2nd mortgage, so we chose to file a 13. We had to use figures WELL below IRS standards in order to fund our plan. (For example, IRS standards for food/clothing is $1633/mo. WE claimed $485/mo).

Our 13 is going to be much more of a struggle than someone in a higher payback, so even though someone looks at our 0% payback and thinks how lucky we are, I look at someone in a 100% payback and think how lucky THEY are that they have so much extra money each month. I only WISH we could have IRS standard expenses each month, we would eat soooo good, and my kids might actually get to have new clothes or go to a movie every now and then....

[ColoradoBell]

Mom of three: thanks for that explanation re the 0%, because I was one of those people who thought , initially, how lucky someone would be to pay 0%.But then I realized that you are still paying your secured, any arrearages and the trustee and the attorney....so while it's a 0% to UNsecureds , it isn't zero dollars!