Hi , I'm in the process of filling 13 and my question is I have roughly $50000 in back property taxes to be paid plus about $60000 in unsecured CC. My disposable income is about 1300 a mo. I know that the taxes are not excempt and it looks like the 1300 will be eaten up by the taxes does the CC debt get anything. Thanks
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Priority claims are paid first and in full, and unsecured claims get what's left over. I calculate that you'll be able to pay off the back property taxes + 47% of your unsecured over the course of a 60 month plan. That's not an unreasonable plan based on what I've seen on this site, but talk to your lawyer. Of course, I have no idea what your Trustee's fee/% is, so that will back out of the unsecured amount. -
If you are keeping the property the property taxes must be paid but they are not necessarily a priority claim. Further, you cannot simply calculate the amount of tax. You most likely will have to treat the tax as secured and pay interest either under bk law or state law. For example. . . In Arizona property taxes are secured and receive interest at the state statutory rate of 16%.
$1300/mo for 60 months produces $78,000.00. You have to deduct from that the Trustee’s fee which, while not currently 10%, can be that high. So, assuming its 10% you are now down to $70,200.00 for your creditors. If you have an attny, deduct say another $3,000.00 for legal fees. Now you are at $67,200.00 to be paid to the creditors. If you have no other secured or priority debt and no mortgage arrears to deal with, and there is no interest running on the property tax (but most likely there is), that leaves approximately $17,200.00 to be paid to everyone else - split on a pro rata basis.
If interest does have to be paid and it is close to the 16% we have in AZ, your Plan may be underfunded as the interest alone over 5 years would run close to $20,000.00 (rough estimate - math is not my strong suit).
You really need to sit down with your attny and run the numbers.
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Just curious what happens if you are under funded ?Comment
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Simple. . . you increase the amount of the monthly payment to make up for the miscalculation. Hopefully the payment is still within your financial means.Originally posted by gmarf1 View Post
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