New - need an explanation

[mxmom]

My husband and I are going to file 13. We have been told that our trustee payments will be $2,847.65 for 3 years. Our monthly income is $5,469.30 and expenses are $4,827
I do not understand how they figure we can afford this. The expenses include our house payment and truck payment. We are in the arrears approximately $4,600 and current on our truck payment.

Please help me understand.

[LadyInTheRed]

Hi, mxmom.

We need more information in order to help.

$127.77 of that payment is your mortgage arrears. What other minimums do you have to pay in your plan? Does the $2,847.65 include your truck or house payment? How much are the monthly mortgage and truck payments? Do you have any non exempt assets you are trying to keep (like, equity in your truck or house)? Do you have non dischargeable debt that needs to be paid during your plan? Is that your gross income?

[pychk2pychk]

Hi mxmom, I too am relatively new to the BK thing. My payment made no sense to me at all, started off at $2100, the lawyer eventually came up with $1250 but unfortunately that was about $500 more than I bring home. After explaining that I cashed in vacation and PA time to cover summertime childcare he amended the plan to $715. It's a doable payment but leaves very little if anything left. Talk to your lawyer, explain how the income was obtained. I had a bonus 3 months prior and cashed in my time at work which blew up my 6 mo average. He said he will have to fight to keep it at $715. If your pay was increased do to bonus or something, you might can get the payment lowered being it is not a regular monthly amount. The banks sure skewed ch13 in their favor with the 6mo average, Ugh.

Good Luck

[mxmom]

Our house payments are $1,391, the truck is $467. The worksheet does not show any non dischargeable debt. I am aware that the school loan I took out for my son is not dischargeable, but as I said it doesn't show on the worksheet. I showed our net income. Our gross is $7,659. Our truck has a balance on the loan of approximately $5,000 and is worth about $15,000.

[LadyInTheRed]

According to http://www.thebankruptcysite.org/exemptions/ohio.html, Ohio has a $3,225 motor vehicle exemption and a $1,075 wildcard exemption. So, if you apply the entire wildcard exemption to the truck, you still have $4,700 of equity that's not exempt. That's $130.55 per month in a 3 year plan that must be paid to unsecured creditors. Do you have equity in your home? Any other non-exempt assets? Any tax liablities? Who prepared this worksheet? pychk2pychk brings up a good point. Did you have a decrease in income in the last 6 months? Does the $2,847.65 assume the mortgage and truck payments will be paid by the trustee or by you directly?

Based on the very little info we have so far, if your mortage and truck payments are included in your plan payment, your payment would have to be at least $2,116.36, without including any attorney or trustee fees:

Monthly Truck payment: $467
Monthly house payment: $1391
mortgage arrears: $130.55
Minimum amount to unsecured creditors to cover the non-exempt equity in your truck: 127.77

Are there any attorney fees that would be included in the plan? Does the worksheet show a percentage to the trustee?

All of your disposible income must be paid to your plan. According to your initial post, your disposible income is $642.30. Add your truck and mortgage to that if they are paid in the plan and you have $2,500.30 to pay into the plan. That seems to be enough to cover the minimums and trustee and attorney fees. So, there still seems to be something missing that is causing a higher minimum.

I hope my explanation isn't too confusing. Whoever prepared this worksheet should be able to explain how they came up with the $2,847.65 plan payment. People here can only help if you provide more information.

ETA: did your expenses in your initial post include any student loan payments?

[boomerkae]

I am aware that the school loan I took out for my son is not dischargeable, but as I said it doesn't show on the worksheet. I showed our net income. .

Although it's not dischargable, the payment does become part of the bankruptcy payment, at least that's what my lawyer told me. That's why it's not on your expenses.