High trustee payment?

[momofthree]

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.

Do you mean UNsecured credit? You have to pay back all secured credit unless you surrender the collateral.

[jcj112562]

Another reason that one might file for Ch13 and pay 100% of all secured and non-secured debt would be if there are several one-time events (or one really big, nasty one-time event with hairy teeth and assorted ancillary debt-generating things), and you look at your money and say.."Gee, with that lawyer fee, and this property settlement, and this lawsuit pending, for the next 14 months, I will have income that is about 1200 bucks less than my bills." Rather than listen to the collectors, and let stuff get late, repos, foreclosures, etc., you file for Ch13, make a decent plan, and pay off what you owe. I know it is not what the majority do, all I know is it worked out reasonably well for me.

John

[Guest123]

Do you mean UNsecured credit? You have to pay back all secured credit unless you surrender the collateral.

No I meant Secured credit. This is mostly what decides what your payment will be because you have to pay all of it back within 5years/60months. Unless you turn in a car or what ever secure credit it is.

$2800 payment would equal $168000.

[enginegirl]

Did you see this new ruling posted ??My atty used this to reduce payment from $1000 per month to $500.00

GREAT NEWS FOR CHAPTER 13 DEBTORS, U.S. Supreme Court
The US Supreme Court upheld the ruling out of the 10th circuit of In Re Lanning

http://www.supremecourt.gov/opinions/09pdf/08-998.pdf

Hamilton v. Lanning 08-998

The Supreme Court has adopted the Forward looking approach for determining disposable income for the chapter 13 plan payment. In a nutshell, no more stupid objections from Chapter 13 trustees if you have a bonus, severance, or other 1 time income event in your prior 6 month look back that eschews your monthly payment calculation. Chapter 13's are to be based on a common sense understanding of "projected" disposable income.

[artgood]

Ok... so that means the trustee can't use a one time, it's never going to happen again bonus my wife got this past year to compute her projected disposable income? Am I understanding that right?

[enginegirl]

Ok... so that means the trustee can't use a one time, it's never going to happen again bonus my wife got this past year to compute her projected disposable income? Am I understanding that right?

according to the ruling they cant use it!

[momofthree]

No I meant Secured credit. This is mostly what decides what your payment will be because you have to pay all of it back within 5years/60months. Unless you turn in a car or what ever secure credit it is.

$2800 payment would equal $168000.

I'm confused. What "mostly decides your payment" isn't your secured debt. What decides your payment is your DMI. Plain and simple. You can have zero secured debt and still have a $3000 monthly payment because that's what your dmi is. Most filers who have zero dmi file ch.7, not chapter 13, but in the cases where the filer has zero dmi and chooses a chapter 13 anyway (like us, for example), then they have to create a budget that shows dmi and make it work, but that's not common at all.

[ozarkmiss]

FWIW,

My first number crunching session with atty he thought we should do 100% c13 too. I let him know I had done my research and told him I prefer to try a c7 first. We crunched numbers again and it's clearly a 7. granted we haven't filed yet / had 341, but now that atty knows we want to proceed with a 7, he's very clear that it will work a0ok.

I'm with you, I think he wants the path of least resistance and to hand off some ripe fruit to the trustee whenever he can get away with it.

[Guest123]

I'm confused. What "mostly decides your payment" isn't your secured debt. What decides your payment is your DMI. Plain and simple. You can have zero secured debt and still have a $3000 monthly payment because that's what your dmi is. Most filers who have zero dmi file ch.7, not chapter 13, but in the cases where the filer has zero dmi and chooses a chapter 13 anyway (like us, for example), then they have to create a budget that shows dmi and make it work, but that's not common at all.

Your secured debt does play a roll in it. If you don't have enough DMI to pay the secured then it is not so plain and simple. And that doesn't mean you automatically qualify for a chapter7.

Our DMI wont even pay half of the secured in the 5years and we don't qualify for a ch.7, lucky for us we have overtime twice a year wee can count on to make the ch.13 doable.

Most of these people that seem to be getting high payments that are cutting into their allowed expenses need to do so to cover the secured credit. And if you have alot of secured credit you want to keep then it does "mostly decide what your payment will be". Plain and simple!

[momofthree]

Your secured debt does play a roll in it. If you don't have enough DMI to pay the secured then it is not so plain and simple. And that doesn't mean you automatically qualify for a chapter7.

Our DMI wont even pay half of the secured in the 5years and we don't qualify for a ch.7, lucky for us we have overtime twice a year wee can count on to make the ch.13 doable.

Most of these people that seem to be getting high payments that are cutting into their allowed expenses need to do so to cover the secured credit. And if you have alot of secured credit you want to keep then it does "mostly decide what your payment will be". Plain and simple!

You are using your situation to make broad statements that make it seem as though secured debt is the most important part of the calculation, and that simply isn't the case. In your situation, you don't qualify for a ch.7 because you earn $20k of overtime each year, which changes your calculated income and gives you DMI. If you didn't have the overtime, you wouldn't have the dmi and you'd qualify for a ch.7. You continually say you don't make enough to fund a ch.13 because you keep discounting your yearly overtime.

The formula for calculating a plan payment is: Income minus allowable expenses equals plan payment. And yes, there are other variables that can create a minimum such as non-exempt assets, IRS debt, mortgage arrears, etc. However, you stated (exact quote) "the payment is determined by how much secured credit, lawyer fee and trustee fee you have to pay back." and I don't want anyone new to the forum to misunderstand. A filer IS required to pay their DMI into the plan for the duration regardless of the amount of secured debt. Even if you have zero secured debt, you still have to pay your DMI into the plan. For some, that means a payment of $100/mo for others it's a payment of $5000 a month.

Secured debt plays the same role that living expenses like groceries and medical expenses play. So, to that extent, it is used to calculate your dmi, and therefore help arrive at your payment.

And, yes, you're correct in that if someone is trying to keep assets, and their DMI isn't enough to cover those assets, they have to get creative with numbers (BTDT!) and make it work, but that doesn't change the formula used to calculate dmi. It's still Income minus allowable expenses equals plan payment.

[Guest123]

You are using your situation to make broad statements that make it seem as though secured debt is the most important part of the calculation, and that simply isn't the case. In your situation, you don't qualify for a ch.7 because you earn $20k of overtime each year, which changes your calculated income and gives you DMI. If you didn't have the overtime, you wouldn't have the dmi and you'd qualify for a ch.7. You continually say you don't make enough to fund a ch.13 because you keep discounting your yearly overtime.

The formula for calculating a plan payment is: Income minus allowable expenses equals plan payment. And yes, there are other variables that can create a minimum such as non-exempt assets, IRS debt, mortgage arrears, etc. However, you stated (exact quote) "the payment is determined by how much secured credit, lawyer fee and trustee fee you have to pay back." and I don't want anyone new to the forum to misunderstand. A filer IS required to pay their DMI into the plan for the duration regardless of the amount of secured debt. Even if you have zero secured debt, you still have to pay your DMI into the plan. For some, that means a payment of $100/mo for others it's a payment of $5000 a month.

Secured debt plays the same role that living expenses like groceries and medical expenses play. So, to that extent, it is used to calculate your dmi, and therefore help arrive at your payment.

And, yes, you're correct in that if someone is trying to keep assets, and their DMI isn't enough to cover those assets, they have to get creative with numbers (BTDT!) and make it work, but that doesn't change the formula used to calculate dmi. It's still Income minus allowable expenses equals plan payment.

I'm correct, yet I'm wrong?
Nothing I said is incorrect, you are just making it more complicated then it needs to be.
Am I wrong to say secure credit plays a part in the payment...NO!
Have I stated that DMI plays a part in the payment...YES!
Do I have some super special case no, I just have a way to pay my secured debt without having to cut my expenses.

AND if you read the first post you would have seen that they stated their DMI wouldn't cover the payment, so common
sense would let you know there is some secured debt that has to be paid or something is seriously wrong.
I think my statements are correct for this thread.

[FishersMike]

momofthree,

I would not try debating with Guest123 -- it will be an uphill battle - just ask Pandora. It is quite interesting reading though!

[Guest123]

momofthree,

I would not try debating with Guest123 -- it will be an uphill battle - just ask Pandora. It is quite interesting reading though!

If I'm wrong then state how so. But when you state the same damn thing I have said just in a different way then and call me wrong is ignorant. Much like this post that has nothing to add!

[LadyInTheRed]

I'm correct, yet I'm wrong?
Nothing I said is incorrect, you are just making it more complicated then it needs to be.

No I meant Secured credit. This is mostly what decides what your payment will be because you have to pay all of it back within 5years/60months. Unless you turn in a car or what ever secure credit it is.

That is just one incorrect statement you have made. Your secured credit does not MOSTLY decide your payment. It does play a role because payments on secured debt will reduce your DMI, unless that debt is paid through the plan. momofthree has already explained very well how your payment is determined.

Secured debt does not all have to be paid during the plan. The payments need to be made on the secured debt to avoid the creditor from getting relief from the automatic stay, but a debtor can still have secured debt after discharge of the Chap 13. The very common example of that is a mortgage.

momofthree,

I would not try debating with Guest123 -- it will be an uphill battle - just ask Pandora. It is quite interesting reading though!

I think momofthree's goal is not necessarily to convince Guest123, but to counter the false information posted. I decided to add my 2-cents so that somebody trying to learn about Chap 13 who reads this thread might give more weight to momofthree's explanations with a little back up from another poster.

[NowImDownInIt]

I'm correct, yet I'm wrong?
Nothing I said is incorrect, you are just making it more complicated then it needs to be.
Am I wrong to say secure credit plays a part in the payment...NO!
Have I stated that DMI plays a part in the payment...YES!
Do I have some super special case no, I just have a way to pay my secured debt without having to cut my expenses.

AND if you read the first post you would have seen that they stated their DMI wouldn't cover the payment, so common
sense would let you know there is some secured debt that has to be paid or something is seriously wrong.
I think my statements are correct for this thread.

I'm going to have to side with momofthree and state that it is actually YOU that are making this more complicated that necessary.

Your payment IS your DMI. Simply put. Your situation, Guest123, is hardly the rule.

Mortgages are paid outside and inside but neither are expected to be paid in full by the end of the plan.

Secured debt is just one part of the equation in the plan base.