chapter 13 no income available to pay debts?

[lomspolo]

Question.

State of Fla. filing a 13. What happens if after all legitimate budget items are added up there is no remaining income left for debt service even though household income is higher than means test so rules say you have to file a 13?
Thank you

[deeone2010]

Hi,

I may have the same issue. My lawyer should have our totals done by Monday. Just be reviewing our debt/income ratio, he thinks we may only have to pay out $40 a month for 5 years. He does not want to be in a bind and not be able to pay off our chapter 13 in 5 years. We have children, a mortgage and 2 car payments (we are keeping the vehicles). I should know more by early next week. I'll keep you posted!

[lomspolo]

thank you

Thanks for info. Anothr question do you recall what dtermines a 3 or 5 year payback?

[Skipper]

Thanks for info. Anothr question do you recall what dtermines a 3 or 5 year payback?

If you are under the state "median income".

http://www.justice.gov/ust/eo/bapcpa/20100315/bci_data/median_income_table.htm

For Deeone, as far as "paying into a plan", there is the option of paying for your vehicle(s) through your Chapter 13.

Skipper

[SMinGA]

Being over median income does not automatically mean you are only eligible for ch. 13. It may put your expenses under scrutiny, but its not the final answer.

You also need to discuss your actual expenses with your attorney, and you can compare them to the IRS standards to see if there are any areas where you are likely to have trouble. Also, self-assess to see if you are trying to hang on to things (secured items or costly hobbies/habits) that need to be cut out.

[momofthree]

You're over the median income, upon full completion of the means test does it show remaining income (DMI)? If not, then you should qualify for ch.7, assuming that your schedule J also doesn't show DMI.

If you do show DMI on the means test, and you want to file bankruptcy, then you'll simply have to adjust your budget/lifestyle to make room for a chapter 13 plan payment.

[drowningNIL]

question about how much payment/month....

is $40/month really worth it for everybody involved - thinking about the processing fees etc. I thought it would cost a bit to even handle a Ch 13. ???

I thought even if you had a couple hundred bucks left DMI....there was a line where it just isn't worth it for the trustee or whatever to have to deal with a small payment. On one of the legal consumer means test lines it adds in for processing fees and those are a few hundred/month.

Good luck, all.

[momofthree]

question about how much payment/month....

is $40/month really worth it for everybody involved - thinking about the processing fees etc. I thought it would cost a bit to even handle a Ch 13. ???

I thought even if you had a couple hundred bucks left DMI....there was a line where it just isn't worth it for the trustee or whatever to have to deal with a small payment. On one of the legal consumer means test lines it adds in for processing fees and those are a few hundred/month.

Good luck, all.

If your dmi is only $40, then you wouldn't be denied a chapter 7 due to DMI issues. However, some people WANT to file a chapter 13 (whether because of a previous bankruptcy, IRS, arrears, moral obligation, etc) so it is worth it for those people to enter a ch.13 with only a $40 payment.

[drowningNIL]

momofthree - thanks for clarifying!