Question about payback converting to CH13 from a CH7?

[AKA]

Because I waited too long and started to make some decent money again right around my filing for CH7, after I tried to modify my loan twice unsuccessfully, the trustee determined I was making too much money to qualify for a CH7. If I had filed back in March it never would have been a problem as I had been making little to nothing the prior 18 months.

My CH13 means I will be making a mo. payment of $169 for 60 months. My question is if I continue to make more money annually over time can the trustee change/increase this amount I owe? Do I need to be concerned about making more money during the 60 months?

[Pandora]

My question is if I continue to make more money annually over time can the trustee change/increase this amount I owe?

Do I need to be concerned about making more money during the 60 months?

1. Yes he/she can increase it based on income increases and what is the percent of your debt you're required to pay back. You're at roughly $10K in payback...(base plan minimum) - so what percentage of your total debt is that?

2. Yes. In general all income increases are to be reported to your lawyer / trustee. Once confirmed, your order should state what the trustee requires during the course of your plan. Some trustee's require anything over a certain percentage, while others dont.

We're one of the lucky ones - we get to keep all pay increases as well as tax refunds.

[AKA]

1. Yes he/she can increase it based on income increases and what is the percent of your debt you're required to pay back. You're at roughly $10K in payback...(base plan minimum) - so what percentage of your total debt is that?

2. Yes. In general all income increases are to be reported to your lawyer / trustee. Once confirmed, your order should state what the trustee requires during the course of your plan. Some trustee's require anything over a certain percentage, while others dont.

We're one of the lucky ones - we get to keep all pay increases as well as tax refunds.

My lawyer has informed me differently. That the plan is SET; Florida law?

1. Total debt is around $237,000...$160k 1st, $70k 2nd and about $7k in CC. So that would be almost 4.3%.

2. I am commission only. One month can be $6-8k the next could be $3-5k...you never know...there is no guaranteed income.

So why is it that YOU don't you have to pay any increases or refunds?

[AKA]

JUST TO CLARIFY, Pandora: Are you stating they can increase the monthly payment to pay off the creditors faster (which I would be fine with) or increase the total amount set to be paid over 60 months from the origination of the plan?

Again, I really have no increase in pay to notify my lawyer or trustee of because of the huge fluctuations in my monthly paycheck. They would only have my annual income to look at as a measurement.

[Pandora]

Hi AKA

no, thats not what I meant (pay off creditor faster) - and yes to "increase amount over 60 months".

You asked if your income increased, could the trustee change the plan - and that answer is yes. Generally, if you arent in a 100% payback to creditors and your income increases, then the trustee can increase your payment; which in turn increases the amount your creditors get. Make sense? Doesnt mean the trustee WILL - it just means that they can. You can only pay off your BK plan early if you're paying everything back at 100%.

As to it being "set" - is it maybe the base plan that your lawyer is saying thats "set"? Meaning - if you have assets you own/equity - the base plan would be based upon what creditors would get if Ch. 7 liquidation was done. This is how our Ch. 13 was done - our base plan minimum is set at what the value of our vehicles were, then set over 60 months.

Questions:

Are you surrendering the house? ...If not, are you paying your mortgage outside of your plan and stripping your 2nd? Are these your only secured items? If stripping the 2nd, it becomes unsecured debt (if approved) and they get paid the same as all other unsecured creditors (i.e., your credit card debt).

As to why my trustee isnt requiring pay increases / tax refunds - it all depends on the trustee/your district/state.

[justbroke]

This is a duplicate thread? I answered in this thread...

If you're not in a 100% plan, then you'd be paying more than $10,140. If $10,140 is just your base plan amount, then this is just the minimum that your plan needs to pay in order to both receive a discharge and be feasible).

Not all Trustees care about changes in income, and those that do -- the majority -- only care if it's significant. I can't define significant, but it appears that 10% is the trigger. For Florida, the plan payment usually doesn't change, but if you have a significant change in income during a calendar (tax) year, the Trustee will likely file a Motion to Modify Confirmed Plan.

(Also, as stated above, not all Districts require tax returns to be submitted. Florida Districts do!)

[Pandora]

This is a duplicate thread? I answered in this thread...

Didnt even see that one JB...

JB would know - he's "been there - done that" ;)

[AKA]

Hi AKA

no, thats not what I meant (pay off creditor faster) - and yes to "increase amount over 60 months".

You asked if your income increased, could the trustee change the plan - and that answer is yes. Generally, if you arent in a 100% payback to creditors and your income increases, then the trustee can increase your payment; which in turn increases the amount your creditors get. Make sense? Doesnt mean the trustee WILL - it just means that they can. You can only pay off your BK plan early if you're paying everything back at 100%.

As to it being "set" - is it maybe the base plan that your lawyer is saying thats "set"? Meaning - if you have assets you own/equity - the base plan would be based upon what creditors would get if Ch. 7 liquidation was done. This is how our Ch. 13 was done - our base plan minimum is set at what the value of our vehicles were, then set over 60 months.

Questions:

Are you surrendering the house? ...If not, are you paying your mortgage outside of your plan and stripping your 2nd? Are these your only secured items? If stripping the 2nd, it becomes unsecured debt (if approved) and they get paid the same as all other unsecured creditors (i.e., your credit card debt).

As to why my trustee isnt requiring pay increases / tax refunds - it all depends on the trustee/your district/state.

I am surrendering the house. All I know is the amount of my proposed monthly payment and term, that my income is COMMISSION only so not sure how they measure increase/decrease other than annually and that this year will be a significant increase in annual income over last year. I am also worried the paycheck I receive this week until the CH13 plan is finalized (next 15-30 days?) will screw me into paying a lot more.

[Pandora]

I read on your other post that you do not know what your lawyer has on your schedules... ?? You need to know whats on those forms - actually you should have done the forms yourself and then let your lawyer increase/decrease/stay the same from there; getting a copy of all forms submitted. You will be asked questions at your 341. If you're surrendering the house - are you doing a stay and pay or are you renting another home? Things you need to know before your 341

As far as your income goes - many on here have been paid as you do; the trick will be for you to manage all of your money throughout the year and making your 13 plan payments on time every month. Regarding how there may be an increase in payment - the trustee may require your tax returns and/or refunds at the end of the year; if your income is significantly higher than reported initially, then as JustBroke stated, your plan could be modified.

[AKA]

Okay, this is what my lawyer just sent me: "Yes, since he is paying off 100% of his unsecured debt, there will be no increase in payments if his income increases."

[justbroke]

Okay, this is what my lawyer just sent me: "Yes, since he is paying off 100% of his unsecured debt, there will be no increase in payments if his income increases."

Exactly how it should be in a 100% plan.

[AKA]

Exactly how it should be in a 100% plan.

That gives some relief, although my CH13 hasn't been finalized (just submitted this morning) so I'm concerned my upcoming monthly paycheck this Friday may gum up the works if taken into consideration.

[justbroke]

That gives some relief, although my CH13 hasn't been finalized (just submitted this morning) so I'm concerned my upcoming monthly paycheck this Friday may gum up the works if taken into consideration.

If you're in a 100% repayment plan, not much affects it. Unless your 100% payback is due to excessive DMI. Otherwise, if you're in a mandatory 100% repayment plan -- due to the calculation of what's known as the Chapter 7 liquidation test -- then nothing would affect the payment amount.