Chapter 13 repayment plan

[huskylvr]

We are now having to file bankruptcy again. We filed Chapter 7, six years ago right after we got married as my husband came witha lot of debt I had no way to pay. A lot of situations happened and we have to file again. Since it has been less than 8 years, we have to file Chapter 13. When I took the online means test for my state, it said we have -$67 a month disposable income. Which is pretty right on. Will we have to be able to pay something for a Chapter 13 bankruptcy to be accepted or will they let us file with a zero re=payment plan?

[justbroke]

The question on a zero-payment Chapter 13 is District specific. In Florida, at least, I know that $0 Chapter 13s are confirmed often. In some other States, i think Ohio may be one, there is a "minimum" that you have to pay, otherwise they call it a back door Chapter 7.

I think your big problem will be that if you have no secured debt, no priority unsecured debt (taxes) and no attorney payments in the plan, then the Trustee would earn NOTHING to manage the case. This would more than likely be denied confirmation.

I'm actually thinking that a Trustee or Creditor would have an excellent reason to file an objection and be sustained based on bad faith. You are bared from receiving a Chapter 7 discharge for 2 more years, yet you want to file a back-door Chapter 7 (masked as a Chapter 13) to receive the benefit of the super-discharge, without actually proposing to pay or actually paying anything to the unsecured creditors. You would, in affect, get your Chapter 7, potentially, earlier! That would definitely be what the serial-filing rules were meant to prevent.

At least, that would be my argument from the Trustee/Creditor viewpoint. I don't know the specifics for your State.

[whathehell]

I don't thing u can be negative u have to have a + for the plan, I believe my lawyer mentioned that to me in the interview... Start scheduling apponitns to find out your best option..

[justbroke]

Well, mine was actually negative and my plan was confirmed with 0% to the unsecured creditors. Attorneys want you to pay "something" to unsecured creditors, just to appease the unsecured creditors and the Trustee, but it's not a requirement in Florida.

[sheilaE]

How does one find out if their state might confirm a 0 repayment. We're in CA and I don't think our attorney will offer to tell us this, but I'd sure like to know...I'm working on our schedules right now.

[huskylvr]

Zero percent payment

Does anyone know if they confirm a zero percent pament in Iowa in Chapter 13 bankruptcy. We would actually love to pay something every month if we had the means to. We haven't actually paid on anything we would have to claim in the bankruptcy for several years, but also can not afford to have wages garnished. We only have about $200 a week after bills for gas, groceries, daughter expenses, clothing etc. I am in the process of scheduling an appointment with an attorney. Hopefully will have appt set today. If we can not file and get wages garnished, we will not be able to afford basic living expenses. We do not have anything extravagent. In fact have less than $8000 in materiel goods. That amount includes the value of our 2 used cars.

[momofthree]

#1, the means test uses arbitrary numbers. Where do you stand on DMI when you fill out schedules I & J (income - actual expenses)?

#2, you do not have to be positive on the means test to be allowed a ch.13. We were negative by well over $1000/mo on the means test. However, we were able to change some numbers and come up positive on our schedules. We now have a $610/mo payment.

#3, while it is possible to end up in a $0 payback to unsecured, you generally have to pay something into your plan besides just your attorney fees. We are in 0% but we are paying our car payment in the plan. Our attorney got a lecture from the trustee at our 341 about our filing being a "disguised chapter 7" but since it was our first filing, they didn't feel that the totality of circumstances indicated abuse, and they did confirm the plan without objection. In your situation, I think you'd have a rough time getting confirmed at 0% payback.

If you want to file, you will simply have to make room in your budget, finagle with your numbers on the schedules, and pay something into the plan.

Good luck and keep us posted!

[momofthree]

Shiela, we're in CA and were confirmed at 0% payback. You do have to pay something into the plan though--mortgage arrears, secured debt, IRS, etc. you can't just pay attorney fees. At least that's how it is in the Eastern District. Other districts may vary.

[huskylvr]

Thanks Everyone. And the only secured debt we have is our 2 car payments which we plan to continue to pay. That is $800 a month, so technically wouldn't that be allowed to be our pay into the plan. Though both would be paid off before September this year. No other secured debt, just 5 old credit cards that have not been used for 3 years and hospital bills and our 2 homes that foreclosed were mortgaged in 80/20 plans. The 80% plans were the amounts foreclosed on so the 20% portions are still out there. And on one, my boss co-signed for us and when he found out we missed a payment, he payed off the loan and took out a personal loan at his bank and made us sign a promissary note of re=payment with the house as collateral or he would fire me. I couldn't go without an income, so I signed. In the foreclosure the court ruled he had no rights to the home and dismissed the promissary note. Now, 3 years later he is sending me a right to cure and I believe will sue me for the $18,000 as he has a snowboarding accident and needs money.