High trustee payment?

[Bearmo01]

Hello,

I've been searching the forum for a few hours now and can't seem to find an answer.

Are all 13's paid back at 100%?

We are in AZ and make to much for a 7, so we've met with an Attorney and according to their numbers, we'll have a monthly payment of about $2800. When we crunch the numbers we do not see a DMI in which we call pull this off, especially for 60 months.

In our initial meeting, looking over paystubs both my wife and I had been getting a lot of overtime (we're both in healhcare) we are not getting any now, and my monthly income has dropped by about $800 per month, my wife's by close to $1000.We met with him again, re-crunched the numbers and were still at $2500 per month. We're baffled here, we are not stupid people, we just don't see it.

Should we meet with a different Attorney to see if the numbers truly correlate?
Should we get someone more aggressive?

I've been working all night it's 5:00 am, so please pardon me if I left out any vital information (I'm sure I must have)

Any advice would be greatly appreciated. Or if anyone can reccommend a good Attorney in AZ (Mesa/Gilbert area) that would fantastic also.

Many thanks,

B

[newbie2]

No, in fact it is rare to have a 100% payback. Please read this thread http://www.bkforum.com/showthread.ph...sn-t-matter%29 in the stickies. It helps explain how payback is determined.

And yes, definitely seek a 2nd (or third) opinion, especially since you aren't sure how that payback was determined.

One other thing: If your overtime recently dropped off that may be part of the issue you're having (the 6 month look back). The forward looking income may not be accurate. Ask your attorney about that.

[LaurieM]

Your attorney can motion the court to have the plan payment modified (lowered) which would obviously decrease the percentage paid to your unsecured creditors. Be prepared though to have the trustee do reviews (asking for updated paystubs periodically) to ensure that the overtime hasn't increased. We do plans for people all the time who have seasonally increased income and the attorney I work for has successfully prepared and had approved plans which have one payment a certain number of months per year and a lower payment during the decreased or no overtime months of the year. We provide the court with excel spreadsheets proving the fluctuating income when we ask for something like this though.

[Bearmo01]

Thanks Newbie, thanks Laurie.

The Attorney just doesn't seem to keen on any modifications, basically it's "here is the payment we came up with, now make it work somehow" We get the impression he'd like to keep it as simple as possible on his end, and he probably wants it that way. He'll get a higher rate of return with the least he has to do for us. Working smarter, not harder applies to this I guess...LOL

We're doing the budgeting, using tools, got signed up with Mint.com and we just don't see how we can make this happen for the next 5 years. We also have 4 kids from 7 to 17 in the mix as well. When we showed him our paycheck stubs since June and how our income has dropped by $1800 per month he said our payment would most likely be around $2500 down from $2800. That's a pretty small drop for an $1800 monthly deficit I think.

We"ll meet with other Attorney's to compare and then make a decision from there.
I'd like to add the he also came up with the 100% payback suggestion, just from reading other posts on the forum that seems odd to us, but then again is a learning experience for us.

I'm thankful for all the good people on here willing to share their experiences with us that have little to go on.

Best wishes,

B

[momofthree]

Have you already taken the means test? There's one here: http://www.legalconsumer.com/bankruptcy/means-test/. You enter your zipcode and family size and it automatically fills out all of the IRS standards for your state and household size. This should give you insight as to how much your payment should be.

[13for60]

B -

We're in the same boat - my wife and I both work in healthcare, lots of OT. Our attorney warned us up from that we'd be hit with 100% payback. We have our 341 hearing on 11/10 and we're looking at 2500+, depending on what the Trustee does. Initially, our payment was $3500, but like you the DMI didn't add up (something like Sched J vs. the Means Test just didn't jive for some reason).

We're hosed, we know it. It's gonna hurt for a while, but we figure that we'll find a way to make it work. We're not 100% in love with our attorney, but we live in a rural area of Northern Cal and choices are limited. We're 100 miles away from the attorney and almost 300 from the Trustee's offce.

Our attorney told us that "your situation rarely comes up" but that's little comfort when faced with a huge payment. Out Trustee has bee na Trustee for like 40 years - I have no idea which way our 341 will go. We're keeping our fingers crossed and hoping for the best.

We'll keep our fingers crissed for you, too!

--13for60

[becky20]

I would DEFINITELY do some other consultations and do your best to hold off as long as possible on filing to show 6 months of current income instead of the inflated income with OT that is no longer given...

[minan]

All, my payment is 2800+ to the Trustee so I know how you feel. I'm single so I can't claim dependents etc..I'm basically living the bare bones in terms of living expenses. I'm looking for a second job so long as my income doesn't go over 10% above what I make now, my atty told me the trustee will not touch the extra income. I am hosed because I filed 13 to deal with tax issues from when I had my own business. It's the only option I had left because they had already issued 2 levies against me and probably would have eventually put a lien on my condo. It's going to be hard, however I'm willing to get a second job so I have just enough to make it through.

If you haven't met other attys, definitely get more consults. Also check your numbers on the means test, and all paperwork. My atty made a mistake on mine and the original payment was over 3000+/monthly. It wasn't until I reviewed the paperwork because my gut was telling me something was off and there was no way I should have a 3000 plus payment. Read the posts on this forum. This forum has been a wealth of info.

[LaurieM]

When income fluctates seasonally, we propose plans whereby during the typically lower O/T months, the plan payment is one amount versus a higher payment in the higher O/T months. I hate doing 13's when people aren't on salary lol.

[Pandora]

We are in AZ and make to much for a 7, so we've met with an Attorney and according to their numbers, we'll have a monthly payment of about $2800. When we crunch the numbers we do not see a DMI in which we call pull this off, especially for 60 months.

In our initial meeting, looking over paystubs both my wife and I had been getting a lot of overtime (we're both in healhcare) we are not getting any now, and my monthly income has dropped by about $800 per month, my wife's by close to $1000.We met with him again, re-crunched the numbers and were still at $2500 per month. We're baffled here, we are not stupid people, we just don't see it.

B

Have you done both the means test and completed all your schedules to come up with your DMI of what the attorney is proposing? Seems awfully high to me - if income doesnt support it then you need to sit down and do a line for line with your attorney before papers are filed. I'd also question your attorney's actions to not wanting to modify a plan - you're in a 13 for 36-60 months, there are bound to be situations where a plan modification may happen. Thats what you pay your attorney for, to see you through the entire plan including any changes that must be made until you complete your plan.

If you dont see eye to eye with him/her - then its not going to get any easier once you're in your plan either. If you havent filled out the schedules yet and your attorney is just going off of your 6 month income - I'd be worried. Of course, if you can wait to file so you can get out of the previous income amounts prior to your salaries dropping, I would.

Remember you need to include everything you pay for during the course of the year in your schedule, with 6 people in your family you get pretty high IRS standards.

[kornellred]

There is no big mystery about figuring out disposable monthly income. The numbers that you plug into the schedules need to be accurate, and then mathematics does the rest. Arrival at accurate numbers is the sticking point when income and expenses are not fixed (relatively speaking).

Your plan payment will be the mathematically derived DMI figure, modified by allowances negotiated by your attorney and approved by the Court. It's as simple as that. If there is any way that a plan payment even closely approximates an amount whereby all creditors would be paid in full, then you should not even be thinking about bankruptcy.

[Logan08]

My wife and I are looking into 13 as well, we have rental properties that the mortgages have gone through the roof due to new taxes. So, I'm confused, if you are paying 100% back, then why not just work out another plan with the debtors instead of filing 13? Isn't filing 13 supposed to eliminate some of the debt?

[rjd78]

Good grief. $2800 per month?? I'd seek out another attorney. Pronto.

[LadyInTheRed]

My wife and I are looking into 13 as well, we have rental properties that the mortgages have gone through the roof due to new taxes. So, I'm confused, if you are paying 100% back, then why not just work out another plan with the debtors instead of filing 13? Isn't filing 13 supposed to eliminate some of the debt?

If you have a $20,000 balance on a credit card and file bankruptcy, interest would stop accruing on the date of filing. 60 monthly payments of $333.33 (plus attorney and trustee fees) will pay off that balance. At a 19% interest rate, you'd have to pay $518.81 a month to pay off the balance in 60 months. If you paid $333.33 on that balance at 19%, it would take 191 months to pay it off. Many people are paying rates higher than 19% and have much hire balances. Banks don't tend to do much to work with you unless you have cash to pay a lump sum.

This is only one example of why somebody would file a Chap 13 with a 100% plan. There are others.

[Guest123]

From what I have seen the payment is dertermined by how much secured credit, lawyer fee and trustee fee you have to pay back. Rarely does anyone payback 100% according to a few people and lawyers I have talked to.

We didn't qualify for a chapter7 either and only qualified for a chapter13 if we added our yearly overtime in. Our secured credit was $60k plus fees and a $500 monthly payment wouldn't even pay off half of that. In Arizona cars are included in the plan if you are financing them.

I would talk to other lawyers.