Mortgage included in Ch. 13 Question

[deedee642]

If I were to include my mortgage and all of the back payments owed in a Chapter 13 does that payment somehow take priority over my over unsecured debts (credit cards, loans). I was once looking at 100% payback, but I was wondering if that would change now that I owe so much more on my house because of the added amount for the arrears, so I thought possibly I could be at a percentage payback on the other debts? Any feedback or personal experiences would be appreciated.
Thanks,
Dee

[justbroke]

Not only does it take precedence, it is likely that you won't pay much to the unsecured creditors. As you know, the only amounts that go to unsecured creditors, is your "disposable monthly income" (DMI) which is derived primarily from the Means Test. If you have arrears, those arrears are "secured" debt and will affect the calculation of your DMI.

So, unsecured creditors could get less then they could in a Plan where there were no mortgage arrears. It really depends on the DMI calculation.

I would not worry about this DMI and unsecured creditor payments too much. The mantra on BKForum is that the % payback to (unsecured) creditors does not matter. In your case, the money either goes to the arrears or the creditors. It would (or at least should) not affect your Chapter 13 Plan payments in general.

You could still end up in a 100% payback. Remember, it's really your DMI that's driving all this. If you still have enough DMI to pay 100% to (allowed) unsecured claims (creditors), then you would still be in a 100% plan. But don't concentrate on the % payback!

[deedee642]

Just Broke,
Thanks for your reply. I am going to go back and read some of the topics about % payback.
Dee