High trustee payment?

[justbroke]

Just a little information. Plan payment is NOT the DMI value calculated by the Chapter 13 Means Test on Official Form B22C. Plan payment is based upon a combination of the DMI on Form B22C and payments on secured debt (if paid through Trustee), priority debt (taxes), and the Trustee administrative fees. We have had some people complain that their plan payment was $2000 and how they were going to pay their mortgage, not knowing that the mortgage and car payment was included in the "plan" payment. I'm just trying to get people to not confuse DMI with a Chapter 13 plan payment.

As a debtor who filed and was confirmed in a Chapter 13 plan, and later converted to a Chapter 7 and was discharged, the amount of money you make is only a "factor" when determining eligibility for Chapter 7. It's not the only factor. I am over $100K over the median, and my Means Test (Chapter 7 Official Form B22A) shows negative "DMI" and my old Chapter 13 Means Test (Form B22C) showed only +$60 or so.

A Chapter 13 "plan" can also be difficult to pinpoint since any assets that are being kept may factor into the "Chapter 7 liquidation test". Each individual case can have a very intricate set of numbers to deal with and generally is "unique" to an extent.

Here's the bottom line. If you want to file Chapter 7 and are over-the-median, make sure you work with an attorney that knows that over-the-median income debtors get Chapter 7 discharges every single day. This may not mean that your numbers will work, but at least the attorney will work with you, and not just tell you that you "make too much".

Second, if you are in a Chapter 13, make sure you work with an attorney that will create a budget that works for you. Make sure that the attorney will go to bat and fight a Trustee objection to confirmation, if your lookback is NOT an indicator of your current situation. I'm tired of hearing about so many attorneys that just tell their clients, that's the payment, so "make it work". A good attorney will explain the numbers and allow you to ask questions about other factors that may influence the payment.

[artgood]

justbroke... thanks for that. We will be barely over the median, and my aim is to still file a chapter 7 (if we can). Otherwise, I will expect my attorney to help me, honestly, get the lowest repayment plan possible. I don't have a problem paying some of my debt back, on the contrary I would reasonably like to do that, but I will fire my attorney and look for another one if they just hang up their hat and stick it to me.

[alorth]

J
Here's the bottom line. If you want to file Chapter 7 and are over-the-median, make sure you work with an attorney that knows that over-the-median income debtors get Chapter 7 discharges every single day. This may not mean that your numbers will work, but at least the attorney will work with you, and not just tell you that you "make too much".

Second, if you are in a Chapter 13, make sure you work with an attorney that will create a budget that works for you. Make sure that the attorney will go to bat and fight a Trustee objection to confirmation, if your lookback is NOT an indicator of your current situation. I'm tired of hearing about so many attorneys that just tell their clients, that's the payment, so "make it work". A good attorney will explain the numbers and allow you to ask questions about other factors that may influence the payment.

Thank you so much for saying this. Its what I've been thinking about so much recently. It seems that the attorneys I speak with when trying to find one (I haven't retianed one yet) automatically says "You are over the median by so much (about 60K) that there is no way a 7 is an option for one of you, let alone both"....and they say that w/o even looking at the situation in detail, or really listening to us.

Its like they are bored with their job, and think "Its just another BK...they're all the same".

[JEM]

Just a little information. Plan payment is NOT the DMI value calculated by the Chapter 13 Means Test on Official Form B22C. Plan payment is based upon a combination of the DMI on Form B22C and payments on secured debt (if paid through Trustee), priority debt (taxes), and the Trustee administrative fees. We have had some people complain that their plan payment was $2000 and how they were going to pay their mortgage, not knowing that the mortgage and car payment was included in the "plan" payment. I'm just trying to get people to not confuse DMI with a Chapter 13 plan payment.

As a debtor who filed and was confirmed in a Chapter 13 plan, and later converted to a Chapter 7 and was discharged, the amount of money you make is only a "factor" when determining eligibility for Chapter 7. It's not the only factor. I am over $100K over the median, and my Means Test (Chapter 7 Official Form B22A) shows negative "DMI" and my old Chapter 13 Means Test (Form B22C) showed only +$60 or so.

A Chapter 13 "plan" can also be difficult to pinpoint since any assets that are being kept may factor into the "Chapter 7 liquidation test". Each individual case can have a very intricate set of numbers to deal with and generally is "unique" to an extent.

Here's the bottom line. If you want to file Chapter 7 and are over-the-median, make sure you work with an attorney that knows that over-the-median income debtors get Chapter 7 discharges every single day. This may not mean that your numbers will work, but at least the attorney will work with you, and not just tell you that you "make too much".

Second, if you are in a Chapter 13, make sure you work with an attorney that will create a budget that works for you. Make sure that the attorney will go to bat and fight a Trustee objection to confirmation, if your lookback is NOT an indicator of your current situation. I'm tired of hearing about so many attorneys that just tell their clients, that's the payment, so "make it work". A good attorney will explain the numbers and allow you to ask questions about other factors that may influence the payment.

Awesome post!

I'm confident we chose the right attorney because he's basically told me the same things. That income is just one piece of the puzzle in the process. Being over the median does NOT mean you cannot file a CH7. I still sit and worry since we are right over the median--and after I saw him today, he told me to stop getting so hung up on that one aspect. It's only the first step at determining qualification.

[artgood]

Awesome post!

I'm confident we chose the right attorney because he's basically told me the same things. That income is just one piece of the puzzle in the process. Being over the median does NOT mean you cannot file a CH7. I still sit and worry since we are right over the median--and after I saw him today, he told me to stop getting so hung up on that one aspect. It's only the first step at determining qualification.

I hoping that will be the case for us as well. We are only about $150 over the median.

My wife works for a bank that offers incentive money for credit card accounts she sells (how ironic) and also for how well the branch performs. She may or may not get these incentives in any given month. Hopefully, our attorney will somehow take that into account. Get rid of that, and we are under the median.

[Pandora]

Justbroke is the man ;) Tellin' ya..he should go to law school! I'd hire him!

[NowImDownInIt]

Justbroke is the man ;) Tellin' ya..he should go to law school! I'd hire him!

I'm not yet convinced that he hasn't! LOL, j/k.. He did totally set us straight though.. What you pay to unsecured is based on what you can pay.. and that's based to some extent on your DMI.

[johnjan2009]

Just a little information. Plan payment is NOT the DMI value calculated by the Chapter 13 Means Test on Official Form B22C. Plan payment is based upon a combination of the DMI on Form B22C and payments on secured debt (if paid through Trustee), priority debt (taxes), and the Trustee administrative fees. We have had some people complain that their plan payment was $2000 and how they were going to pay their mortgage, not knowing that the mortgage and car payment was included in the "plan" payment. I'm just trying to get people to not confuse DMI with a Chapter 13 plan payment.

As a debtor who filed and was confirmed in a Chapter 13 plan, and later converted to a Chapter 7 and was discharged, the amount of money you make is only a "factor" when determining eligibility for Chapter 7. It's not the only factor. I am over $100K over the median, and my Means Test (Chapter 7 Official Form B22A) shows negative "DMI" and my old Chapter 13 Means Test (Form B22C) showed only +$60 or so.

A Chapter 13 "plan" can also be difficult to pinpoint since any assets that are being kept may factor into the "Chapter 7 liquidation test". Each individual case can have a very intricate set of numbers to deal with and generally is "unique" to an extent.

Here's the bottom line. If you want to file Chapter 7 and are over-the-median, make sure you work with an attorney that knows that over-the-median income debtors get Chapter 7 discharges every single day. This may not mean that your numbers will work, but at least the attorney will work with you, and not just tell you that you "make too much".

Second, if you are in a Chapter 13, make sure you work with an attorney that will create a budget that works for you. Make sure that the attorney will go to bat and fight a Trustee objection to confirmation, if your lookback is NOT an indicator of your current situation. I'm tired of hearing about so many attorneys that just tell their clients, that's the payment, so "make it work". A good attorney will explain the numbers and allow you to ask questions about other factors that may influence the payment.

hey justbroke, thanks for sharing this info based on your experience. It really helps me stand up and get more details on what the attorney I'm working with is up to. Also, any chance you know if chapter7 can help discharge 2nd loan/heloc and be treated as unsecured debts? I'm over the median but just slightly on the borderline not by $100k or more Also, I like to get rid of this 2nd loan/heloc specially my home is underwater by $250k

[muzzey58]

Please take my advice and get another lawyer ASAP! I went through this with my first lawyer. My husband owed around $106,000 in debt which was mostly credit card debt. He lost his job in 2002 and was unemployed for over 15 months. He was living on his credit cards. He wasn't able to maintain his condo payment and lost his home. I had good credit when I married him, but had to give back a bad car to the lender. The car though was only $4000. My total debt was around $7000.

My husband and I barely qualified for a chapter 13. If I hadn't worked that year we would have qualified for a 7 instead. The lawyer had us adjust our federal tax withholding allowances which increased our disposable income by almost $400 a month. I quit work because of suffering a serious shoulder/back injury from being a nurse aide. My husband agreed to let me stay at home and recuperate. I tried emailing, sending letters, phoning the law office with no success. This was a period of over 6 months after I quit work. The payments to the Trustee were high 80% of 106,000 which was based on the higher withholding allowances. I finally fired the attorney and hired my current attorney. She figured that we should have never been confirmed at that rate. We were paying $1400 a month. That year we owed the IRS $7000 in back taxes. We adjusted our withholding allowances and petitioned the court for a modification. She reduced the payments to $1150 at 55%. That was much but at least we are able to live now. No one should be paying that type of payback to the court. You need to please call your local Lawyer Referral Service which all major cities/counties have across the US. Get a second, third, fourth opinion on your case. Please be proactive in this procedure. You don't want to have to pay that outrageous payback amount. Good luck.

[justbroke]

Also, any chance you know if chapter7 can help discharge 2nd loan/heloc and be treated as unsecured debts?

No it can't. You will receive a discharge of the debt itself, but you won't be able to do anything with the lien. It's the lien that ties it to your home. There may be some maneuvering that you could do if you filed a complaint (to determine secured status) and the lender/creditor didn't respond. However, that strategy almost never works. You would need to have a very lazy creditor who wouldn't answer your complaint. (And even then, a summary judgment isn't necessarily in your favor even if they don't answer the complaint.)

[johnjan2009]

No it can't. You will receive a discharge of the debt itself, but you won't be able to do anything with the lien. It's the lien that ties it to your home. There may be some maneuvering that you could do if you filed a complaint (to determine secured status) and the lender/creditor didn't respond. However, that strategy almost never works. You would need to have a very lazy creditor who wouldn't answer your complaint. (And even then, a summary judgment isn't necessarily in your favor even if they don't answer the complaint.)

Thanks, justbroke for the explaination... you did explain to me a lot better than the prospect lawyer did... Also, I've been behind on my HOA dues(it went up to $110 per mo.) for almost 12 mos now and was referred to ASAP collection threatening to record a lien(I was given a notice 3wks back)...Do I need to worry about lien from HOA if my home underwater by $250k? Also, what are implications of this lien if ever recorded? Any thoughts how to deal with this? I'm assuming I can include this under chp13 plan as well. Thoughts, pls?

[justbroke]

Do I need to worry about lien from HOA if my home underwater by $250k? Also, what are implications of this lien if ever recorded? Any thoughts how to deal with this? I'm assuming I can include this under chp13 plan as well. Thoughts, pls?

If you are staying in the home, yes, the lien could become a problem. The fact is that in most States, HOAs have very very very strong foreclosure powers and may even be able to do a non-judicial foreclosure on the property for, literally, the $300 you owe them.

Many HOA "liens" are statutory, meaning they are automatic as soon as the HOA issues you a bill. They don't have to record a lien in many States. I'm not sure if HOAs enjoy statutory liens in California, but they do here in Florida.

[puggymoo]

Some of us are filing chapter 13 so they can't garnish wages and charge interest.

[indebt00]

I got lost on what this post was really about...?? I saw OP was in AZ and read it....but basically...

the Trustee is not going to approve a plan where your plan payment makes it impossible to pay your secured debt as well...he is going to make you include the secured payments IN the plan payment.

basically there are 2 trustee's for Maricopa county...so...the Trustee is determining your plan payment and approval...so not a lot of wiggle room there....GET THE BEST LAWYER and make sure you can afford your plan. If you are having ANY doubts with this guy/plan...find another lawyer ASAP !!!!!

good luck OP

[Bearmo01]

Thank you Indebt00. How is your 13 going? May I ask who your Lawyer is?

Best wishes