How to read the 22C for Payment Amount

[Slingerland]

I know this is going to be an "interesting" (hard-to-answer ) question.

I downloaded the Best Case software, and following the instructions my attorney gave me, I've been entering my schedule data. (Once completed, my attorney compares it to his paralegal's version.) Here are some important numbers:

• My mortgage payment is $1340. Attorney says the mortgage will be paid outside the plan. Best Case put it into line 47 with the cars.
• I owe on 3 cars. Line 47 shows the 60 month payments for all three at $1128. They will be paid inside the plan.
• I have an IRS priority claim at $150 for 60 months.
• No arrears on any secured debt.
• Program calculates my DMI at $313.42

Since the house mortgage is not in the plan, am I correct in assuming the starting point for a payment plan would be the secured car payments, IRS claim and DMI put together? In other words, $1591.42?

I find this interesting... one of the cars is my wife's car (she pays it now) but the Trustee in my district will require me to pay it instead. By lumping her debt with me, my wife is going to get (in effect) a $600 pay raise!

[Slingerland]

(gentle bump)

[Pandora]

What is the reason that your trustee is requiring you to pay for your wife's vehicle? Is it in your name alone? Is it titled your name or survivor? I've never heard of a trustee requiring one spouse who is filing to add in the other non-filing spouses' secured debt unless it is in both names.

For your Ch. 13 payment, you must deduct all expenses (irs standards) etc - from your monthly income, then you get DMI (if any). Form 22C determines how much you have to repay your creditors and length of time (36 / 60 months); 6 month average for income applies / household size, then all necessary expenses are deducted. DMI indicates how much you must repay to your unsecured creditors; your secured creditors will get 100% unless you can cram something down (2nd lien / car payment). So essentially, you're correct that your payment could be $1591.42, however that also depends on other factors, such as if you need to factor in any attorney fee's and whatever % the trustee is getting.

You do have secured debt - your cars are secured.

ETA: Are you behind in car payments? What is the reason for keeping the vehicles in the plan vs. outside of it?

[Slingerland]

Thanks, Pandora! All three cars are in both names, so the Trustee requires them in the plan. All cars are too new for cramdowns.

[Pandora]

so in your district regardless if you're not behind on payments, you must include vehicles in your Ch. 13 plan? Ouch.... thats just more $ for the trustee...

Just went back and read your posts - it would make more sense for your wife to file with you vs. you filing alone, especially since much of the debt is joint; this leaves her still liable for her share of joint debts, but wipes out yours. It will also affect her credit just as much as yours. Something for her to think about.....she gets no protection from creditors.

[Slingerland]

Pandora, let me clarify if I may... my wife and I actually do not have any unsecured joint debt, only secured joint debt. Four houses, three cars and an IRS bill. We've always kept separate credit cards and student loans. In her case, she's drowning in debt (from the cancer co-pays) and I think she needs to file as well. However she is of Asian background and her pride and ego are major stumbling blocks. I can't force her to file (sigh) so for loyalty I take the bullet.

The rental houses cash flow well, but I've been using their income to pay unsecured debt. Then I had two bad repairs in the past year wiped out the repair reserves, followed by an IRS bill so I ran out of cash. Right now all my income is paying debt.

It's still possible I might survive without a BK... if I have no vacancies in the rentals and no repairs for at least 18 months. From past experience, I know that's not going to happen, and I get to stress over "when is the next catastrophe" for the next couple of years. So I spoke with an attorney, and ironically, if I file by myself, the payment actually makes our budget MUCH easier and we keep the rentals. I almost feel guilty about it... almost...

A big negative is that the trustee will force my student loans into deferment, which will cause a lot of interest to accrue. But the 22C payment is 25% payback to unsecured... and honestly based on these numbers I can afford a higher payment so I have a bargaining chip with the trustee... start out at the 22C payment and negotiate upwards.

Yes, I'm still surprised...