When looking at debts, include principal and interest or just principal?

[paulywalnutz]

I am trying to preliminarily examine my situation. Considering non-consumer Chapter 7 filing. When looking at total debts to determine if I have more than 50% non-consumer do I include principal and interest on outstanding loans or just principal? For instance if I have a fixed loan, do I consider the entire amount still due inclusive of principal and interest or just the principal that is left?

[mtbc]

Include interest: it's the total liability that matters.

[paulywalnutz]

Thanks!

[justbroke]

I don't think you can include interest unless it's already accrued. For instance, if you have a $100K loan at 5% over 5 years, you don't get to say the debt is $113,227.40. The debt is $100K (or whatever the balance is at the time).

Most loans are "simple interest" loans anyhow and interest only accrues and is calculate on a certain term, like monthly. Otherwise, my home balance would be over $1M and that wouldn't be good for me.

Or did I miss something?

[mtbc]

Sorry, yes, I agree completely. It didn't occur to me that someone might hope to include interest that hadn't even been charged yet. Basically: only the present debt, the principal and interest that you are supposed to pay by now, not the total of what you'd have to pay over the whole contract until it expires.

[paulywalnutz]

Thanks guys!

[justbroke]

So it's principal plus accrued interest which yields your "balance". If it's a mortgage, please know that the balance sometimes doesn't include escrow shortage or other fees such as late fees.

[mtbc]

Basically, it'd often be similar to what your present-day payoff would be without prepayment penalties. (I hope that clarifies rather than further confuses. (-: )

(Interesting, I didn't know late fees sometimes weren't included.)