Too much Disposable Income?

[findingfish]

We have filed Ch 13 to stop a foreclosure. We are still waiting for the attorney to file the Plan so I'm anxious to find out what my monthly payment is.

I'm confused on something that I keep reading and that is that we have to pay every penny of our disposable income into a plan payment. What if our disposable income over 60 months exceeds our debt? How can we pay back more than we owe?

On paper, our disposable income exceeds $1,500 a month which over 60 months is $90,000. Our total debts that we are including in the plan are less than $50,000. How does that work??

[HHM]

You don't pay back more than you owe. If your DMI x 60 is more than you owe, your plan simply ends sooner. So, if at the end of 49 months, all claims are paid in full, the plan ends at that point. No big deal.

[justbroke]

Adding to what HHM wrote... in some Districts you can actually propose to pay 100% to unsecured creditors over the 60 months while not dedicating all your disposable income (DMI) each month. While that seems nice, I think it's better to just get it over with sooner by paying all your DMI each month.

[jcj112562]

To echo justbroke, my Plan was 100% payback to secured/unsecured, payment was not ALL of my DMI, but a significant portion, and while the Plan was written for 5 years (statutory requirement), completed in 26 months. The trustee likes seeing large chunks of DMI to pay off everyone as quickly as possible (at least my particular trustee did).

John

[boomerkae]

Let me ask a quesiton another way.
I have no idea yet what my payback is going to be.

So if my plan is written for five years, and not many creditors show up and I have a low payback, I could finish a lot sooner than 5 years? What if I don't HAVE to give up my tax refund but want to? Will that help make the plan end faster?

Once the amount is set, it doesn't change, right? My payment could fluctuate based on income/expenses, but how much I'm paying back would not. Right?