Question about trustee fees

[paulsk]

I have around $100,000 of unsecured debt that i plan to file with a 100% repayment plan. If i do that, would the trustee's fees add on to that amount? I haven't consulted with a attorney yet. I understand most attorney's charge 2-3K to file a chapter 13. Am I looking at 100,000 + 10% trustee fees + attorney fees in my repayment plan?

[despritfreya]

Using 10% as the guide you would be looking at:

All claims including any applicable interest + legal fees + 10%

The Trustee's percentage is added to everything.

Des.

[paulsk]

So someone with high income has nothing to gain from pursuing chapter 13.

[sophieanne]

Hi,

I'm in a 100% payback plan and paying close to 130,000 in unsecuried credit card debt. The trustee fee is 3.75%.
Good luck with you decision.

[kornellred]

No debtor chooses to be in a 100 percent payback to unsecured creditors. If your disposable monthly income is large enough, you will be placed in that situation whether you want to be or not. In such a case, your attorney will tailor your Chapter 13 payment to assure that the trustee will receive the customary compensation, and also cover any other secured and priority debts there may be (which will include the attorney's fees if that has not been dealt with prior to filing).

In all other cases, the disposable monthly income determines the Chapter 13 payment, and the plan base is drawn down with priority and secured debts being paid first, then the trustee fees are taken, and the balance is distributed among unsecured creditors. What the unsecured creditors get in terms of percentage is irrelevant.

High-income individuals who can afford to maintain their debt loads may choose to file Chapter 13 just to get rid of the ridiculous interest that must be paid to maintain the debt. Maintaining large unsecured debt amounts is exactly the same as burning money in your fireplace. Besides, high-income earners are usually smart enough to avoid getting into such a situation.

[justbroke]

So someone with high income has nothing to gain from pursuing chapter 13.

Yes, there is. For most "general unsecured" creditors (credit cards, etc), the interest and penalties stop. That's a very big advantage.

Remember a Chapter 13 is a Plan of Reorganization of the Debtor. It is nothing more than a contract to bring yourself current and payoff certain debts. It does allow charging off of everything else, including wholly unsecured mortgages, old tax debt, and a host of other things. There is nothing else that gives you the guarantees of discharge (of liability) for debts than a Chapter 11/13.

[sophieanne]

High-income individuals who can afford to maintain their debt loads may choose to file Chapter 13 just to get rid of the ridiculous interest that must be paid to maintain the debt. Maintaining large unsecured debt amounts is exactly the same as burning money in your fireplace. Besides, high-income earners are usually smart enough to avoid getting into such a situation.

Ouch!...i understand what you're saying..but unfortuantely sometimes life happens and even high-income earners (such as myself) get themselves into trouble no matter how smart we are. And just for the record I was happy that I'm able to be in a 100 percent payback situation...i just went though a couple rough years.

[paulsk]

Thanks for sharing, I plan to do a 100% payback.

[LadyInTheRed]

Thanks for sharing, I plan to do a 100% payback.

I hope that's because your disposable income is high enough that you would be required to pay 100% and not because you think you have some moral obligation to pay 100% whether you can afford the plan payment or not. Don't get yourself into a plan you can't afford.

[paulsk]

LadyInTheRed: Yes, I have high income, I determined this with the means test. Thanks for the reply, I do understand that part about not having to pay back 100% if i cannot.

[andy158]

We are not in a 100% payback and our trustee fees are 6%. I understand they vary by district.

[goon]

Figuring out what the trustee fees will actually be can be tricky ( depending on district). In my case the trustee is taking a different amount out of each payment that I make. (anywhere from like 1% to 10%). From reading somewhere else on here I believe the reasoning for this is that the trustee is limited in how much total he can collect across all cases in a given time period, or something of that nature, so while the "normal" rate here is 10% sometimes it is less because he has maxed out what he can collect ( or at least that was my understanding from the threads I have read).

For reference my case is (I believe) going to end up being a 100% payback case (or at least close to 100% payback of "allowed claims" because my second mortgage lender didn't amend their claim to be unsecured after the house was foreclosed, otherwise would not have quite been a 100% case... closer to 70% payback). And as everyone else has said plenty of other benefits, I was paying far more than 10% interest on most of the claims (and so far (halfway in) my trustee fees have actually averaged under 4% even thou the "normal" for my district is 10%)

[toojerm]

My monthly fees have changed often. After 52 months, if I divide the total fees by the total paid to all debtors, it comes out to exactly 7%. I'm in a 100% with just over $101k in debt. Total amount paid back will be just under $108k