What determines payback months?

[fugazzi]

How is the time period of the payment plan determined? For instance, with my income doing 100% over 5yrs gives me 600 more dollars a month than making minimum payments and the payment on a piece of property that i will be surrendering. But lets say what they consider to be disposable income could pay it back in 4yrs at 100%, will they force me to do 4yrs at 100% instead of 5 at 100% if the DMI is there?

[RunningMan]

I am not an expert, but I think they use your DMI to calculate the payment. If you are paying 100% and it is paid early, your payments end early (4 years instead of 5).

[BKParalegal]

The trustee can object to the plan based on not committing the full amount of the DMI to the plan. Depending on the trustee and your Atty they can usually reach a compromise. If not then they could go before the judge.

Good luck

[despritfreya]

The length of your Plan is based upon numerous factors:

1. If you are above median income your commitment period is 60 months unless you pay all allowed claims in full before the 60th month - sounds like you.

2. If you are below median income your commitment period is 36 months however you can fund a plan for as much as 60 months.

3. Your ability to pay based upon your real but reasonable budget.

4. What you are required to pay under law - administrative fees, priority creditors, secured creditors (for collateral you are keeping), mortgage arrears if any, and the value of your non-exempt property etc.

You need to sit down with your attorney to determine exactly what you must pay. When I have an above median income filer who can afford to pay off all creditors is less than 60 months I ususally set it up that way. The quicker they are out of the system the better. If income drops during the Plan I can always make adjustments for them.

Des.

[puggymoo]

Ours is a 100% payback and we also surrendered property. Is all other debt unsecured? We were initially set for 60 months. I have 3 loans outside of the plan and 1 paid off in 1year and 2 paid off in 3 so our payments went up at those times because we had extra money available to the plan. Ours went from 60 to 53 and conifrmed at 48 months. They could still be paid off sooner depending on who files unsecred claims. We have less than 2 weeks left and only have 3300 in claims filed. Our 2 big ones charged off the accounts.

[bobmartins69]

It actually depends on what payback policy you are going to pay premium cause it differs depending upon the different institutions. It will be much better if you go and find it pout yourself personally with the institutions.

[fugazzi]

what does this mean: "payback policy you are going to pay premium" ?

[BKAttyMI]

There are several different payback month time frames, depending on what you are trying to accomplish with your plan. If you are paying back 100%, you have the option of stretching it out over 5 years, even if you qualify for 3 years by being under the state median income. If you are only paying back a portion of your debt, like a 10% plan, you would only contribute your disposable monthly income to the plan for your plan period, either 3 or 5 years. An experienced chapter 13 attorney can give you an estimate on what is right for you.

[despritfreya]

what does this mean: "payback policy you are going to pay premium" ?

Ignore the comment. It makes no sense.

Des.

[fugazzi]

There are several different payback month time frames, depending on what you are trying to accomplish with your plan. If you are paying back 100%, you have the option of stretching it out over 5 years, even if you qualify for 3 years by being under the state median income. If you are only paying back a portion of your debt, like a 10% plan, you would only contribute your disposable monthly income to the plan for your plan period, either 3 or 5 years. An experienced chapter 13 attorney can give you an estimate on what is right for you.

Ok, so since I'm going to pay 100%, then even if i qualify to pay 3yrs, i can still do 5 if i want? I would rather have the lower payment and do over 5yrs, our plan right now is to sit tight for 5yrs, get this paid off and the car will be paid off then as well. This would also give me a total of 13yrs on my current mortgage which will set it up for a nice investment property to rent out and then we can get something a little bigger after the 5yrs.

Meeting with my Attorny today to go over all this, i'll let you know what i find out, thanks for all the help everyone!

[fugazzi]

Met with the lawyer today, said will be no prob to do 5yrs with 100% payback. Everything is looking good for us to file sometime around June. I'll post an update then.