100% Payback Plan

[mountanddo]

What is a 100% payback plan? Everyone's payments seem to be so high compared to what my attorney told me mine would be at $150/mo. I am afraid I am missing something here. I have 20k in credit card debt and make $17/hour. I am hoping she didn't say $150/week and I just missed that! Since only one of my CC's was up to $181/month paying $150 seems like a relief. I know people are saying that Chapter 13 is hard but maybe they have much higher debt than I do though I thought mine was pretty high.

[newbie2]

A 100% plan means that the plan pays all unsecured debt in full. (In your case/example it would mean that the 20K in credit card debt is paid in full)

mountanddo, everyones plan is different, just as everyones income and expenses and debt is different. From your income it sounds like the $150 is per month.

[justbroke]

Never use another debtor's payment amount or percentage as any barometer of what you'll pay. It is a "personalized" number based on a bunch of financial factors.

[kornellred]

mountanddo - Chapter 13 is quite simple after all is said and done. Your plan payment will be your Disposable Monthly Income, which is the money you have left over after all of your living expenses are taken into account. Arriving at the numbers that will be plugged in to the simple arithmetical formula is best done by an experienced attorney who is familiar with how business is conducted in your district.
The Chapter 13 trustee will make disbursements to various creditors based upon priority as described by law. Unsecured creditors are the last to get paid. If all of your Chapter 13 debt paid through the plan is unsecured, then 100 percent of the plan base amount (DMI x months in plan) will be distributed to unsecured creditors. This does not mean that unsecured creditors get 100 percent of what you owe them. They get what they get.

[mountanddo]

So do they distribute it in equal percentages or does the one I owe the most money get more? For instance say I have $50 in DMI and I owe a CC $3000 and my daughter $1000. Does each creditor then get $25 or is the CC paid at a higher percentage because I owe them more. *these numbers are totally made up* LOL.

[keepsmiling]

At 150/mo (and it would be a MONTH, not a week lol)... you would NOT be in a 100% plan.
You are trying to figure out what your daughter would get, right? I don't think you get any control over that. I think all creditors share equally in the pie, ie, same percentage.

[forgotten]

So do they distribute it in equal percentages or does the one I owe the most money get more? For instance say I have $50 in DMI and I owe a CC $3000 and my daughter $1000. Does each creditor then get $25 or is the CC paid at a higher percentage because I owe them more. *these numbers are totally made up* LOL.

If your DMI was $50 and those were your only debts then you would be paying $3000 over the life of a 5 year plan. Your total debt is $4000, so you would be paying back 75% to unsecured creditors. The CC would get $2250 and your daughter would get $750 (each would get 75% of what they were owed).

Now... this is an oversimplified example to show you how it works. You probably have an attorney fee that will be paid in the plan as well as a trustee percentage (will vary by district, not to exceed 10%). If your attorney fee was $1000 and the trustee percentage was 10% then you would actually be paying unsecured creditors around 42.5%. the CC company would get $1275 and your daughter would get $425.

[mountanddo]

At 150/mo (and it would be a MONTH, not a week lol)... you would NOT be in a 100% plan.
You are trying to figure out what your daughter would get, right? I don't think you get any control over that. I think all creditors share equally in the pie, ie, same percentage.

I guess I will just wait till they make the first payment and then ask her how much she is getting. Guess I'm just trying to figure out how much I might owe her to pay off the entire amount after the 3 years is up. Sorry for all the ignorance guys! Just trying to soak in as much information as I can.

[keepsmiling]

No apologies!
Keep asking, keep soaking. We all started out in the same place.

[lrprn]

A trustee making Ch 13 disbursements to creditors doesn't operate like a debtor paying a creditor where the creditor has to get the same amount of money every single month.

The trustee will start by making monthly disbursements to secured creditors, to pay off arrears (if any), priority creditors (like the IRS), and your lawyer.

Once the secured and priority creditors and your lawyer are paid in full, then the trustee will finally start paying the unsecured creditors but not until then. The amounts sent to each unsecured creditor each month can vary or some trustees even skip months occasionally. Because of the automatic stay, the unsecured creditors have to take what they get when they get it. As long as the payback % is met by the end of the plan, that's all that really matters.

Looking back at the payments to our secured and unsecured creditors over the five years of our plan, the amounts paid out to each were in the same ballpark but seldom the exact same figure from month to month and tended to go out the last day of each month. Of course, that's just our trustee's pattern. Yours may be very different. Your lawyer will know what you can expect to happen with whatever trustee you end up having.

Keep in mind that you have zero control over what the trustee sends out and when, just like the creditors have no control either.

[jrs]

Very good info,answered alot of my questions..Thanks to all who post here.