There's a limit on how much your payments are, if you're paying back 100%, right?

[derp]

I'm likely being sued, and right now I'm just considering my options.

Anyway, let's say I file chapter 13 on $20,000 debt, and I make more than enough to pay back 100% (not figuring in whatever the trustee takes). Let's say I'm in a five year plan. My payments should be around $333 (or $555 if I'm in a 3 year plan) per month right? No matter if my monthly disposable income was $500, or $1,500? I would only have to pay back what was originally owed? Extra pay from a tax return, yearly bonus, overtime, ect, doesn't affect anything since I'm already paying back 100%? I'd be free to save the remainder of my disposable income?

[kornellred]

In a Chapter 13 plan, you only pay what you can afford to pay, depending upon your DMI (disposable monthly income). Chapter 13 is not punishment for being careless with your finances. Attorney fees and trustee fees are part of what you owe, so that would be included. If you can afford to repay your entire unsecured debt, your attorney will devise a Chapter 13 plan that will give you the best chance of completion. It could be any combination of dollar amounts and months. Any overpayment will be refunded to you upon completion of the plan.

[despritfreya]

I think what Derp is asking is whether or not he/she has to commit all of his/her disposable income if he/she is paying 100% of all allowed claims. The answer depends upon your Trustee and the Judge.

I have had cases where my client could afford a higher payment but we set it at less than that amount and left the Plan at 60 months. I have also had cases where, since the commitment period was 60 months, the Plan length was set at 60 months but a notation was made that it was anticipated that the Plan would end in, say, month 24.

The reality is that you should want to get out of the case as quickly as possible therefore if you can afford the higher payment which, in turn, will shorten the Plan duration, do it. If something happens down the road you can modify the Plan to reduce the payment.

Des.

[HHM]

Strictly speaking, the code says the debtor is to pay "all disposable income." As desp points out, it will depend on local practice, but the general rule is, you will pay all disposable income regardless of the percent payback.

For example, if $2,000 per month over 60 months would be a 100% plan, but based on your means tests and schedules I&J, you could afford $3,000 per month. Most likely you will be required to pay the $3,000, but at $3,000 per month under his scenario, the plan would last only 40 months (but still be 100%).

[kornellred]

I stand corrected in my assertion, then. The assumption is that the debtor will pay all of his/her disposable income each month, and if the 100 percent payback amount is reached before the stipulated number of months is reached, the plan is considered fulfilled.

[greenthinker]

derp,

They won't take any more from you than what you owe, plus the trustee's fee and attorney fees. So, your math is basically correct. I'm in a 100% payback plan, and I'm not paying anywhere near all of my disposable income.

Hope that helps.

[justbroke]

This is very District specific and can come down to the Chapter 13 Standing Trustee and your attorney. In most cases, the code is read literally and that is "all disposable income", but some have successfully fought, like despritfreya, to show that it also includes that "all disposable income" is for cases where all allowed claims are not being paid in full.

I like despritfrreya's approach. Set it for 60 months and the lower payment. Pay in as much as you can extra and try to get out early! Who would want to be in a pending bankruptcy for 60 months when they could be out in 24 months? Anyone, anyone?

[SMinGA2]

My understanding, and I'm no attorney: you pay back your DMI until your plan ends OR you pay back 100% of submitted claims. Some trustees/districts may let you pay less over a longer time if you're in a 100% plan, but that will vary. A local attorney is the best resource.

But... Attorney fees will cost ~$2000-4000 for a ch. 13. The trustee takes 5-10% of all you pay in. Consider all of your options carefully as the $20k in debt could end up costing a lot more in a ch 13 if you have DMI of $500-1500 per month.