Ability to save money each month?

[valerie724]

Hi everyone. I’m trying to figure out my payments and how much I’ll be able to put away as savings each month. I’ve started talking to an attorney but I keep getting lost (I’m probably confusing myself, very possible). I had one attorney tell me my payments would probably be $1000 per month - that’s taking my total debt of $50(ish)k and dividing it over 60 months.

I’m thankfully working full time at a great company and after taxes my monthly salary is around $4k. And what I’m trying to figure out before proceeding - and what I feel like I can’t get a clear answer from the attorneys - is, what happens to the remaining $3k each month after I make the $1k payment to the trustee? Obviously I know I’ll use it to pay rent, groceries, other necessities - but once those are taken care of, I get to keep the rest, right? And put into a savings account or something? Everything I’m reading online talks about disposable income and I keep thinking they’re going to take anything left over - on top of the $1k.

Hopefully this post makes sense. Can anyone help clarify this for me? What have your experiences been? Thanks in advance!

[sophieanne]

valerie724 ..welcome and congratulations on taking the first steps to getting your financial situation in order. If your debt is $50,000, other than trustee fee, you will pay no more than that amount. So what your attorney told you is correct. I was in the same situation..paid back a lot more than 50,000 ...the amount I owed plus trustee fee was divided by 60 to determine monthly payment. I know some states do things differently, but your attorney would know how things are done where you are...so yes, you will be able to keep what is left after your monthly living expenses and plan payment. Good luck as you go forward.

[shipo]

Hi everyone. I’m trying to figure out my payments and how much I’ll be able to put away as savings each month. I’ve started talking to an attorney but I keep getting lost (I’m probably confusing myself, very possible). I had one attorney tell me my payments would probably be $1000 per month - that’s taking my total debt of $50(ish)k and dividing it over 60 months.

I’m thankfully working full time at a great company and after taxes my monthly salary is around $4k. And what I’m trying to figure out before proceeding - and what I feel like I can’t get a clear answer from the attorneys - is, what happens to the remaining $3k each month after I make the $1k payment to the trustee? Obviously I know I’ll use it to pay rent, groceries, other necessities - but once those are taken care of, I get to keep the rest, right? And put into a savings account or something? Everything I’m reading online talks about disposable income and I keep thinking they’re going to take anything left over - on top of the $1k.

Hopefully this post makes sense. Can anyone help clarify this for me? What have your experiences been? Thanks in advance!

valerie724, maybe it is just me, but if you only owe $50,000 and you go into a 60-month Chapter 13, then paying $1,000 per month would equate to $60,000 in payments; I cannot imagine a Trustee charging $10,000 for your case. Said another way, I'm thinking your payments will be a tad lower, say in the $800 to $900 per month range.

[sophieanne]

I can’t help thinking the attorney was estimating the amount ...,he/she can’t give the actual amount until all information is collected. The OP said debt was 50ish...

[valerie724]

That’s correct - attorney was giving me a worst case scenario estimate based on the numbers I gave him.

[justbroke]

The Trustee would charge a baseline of (usually) 10%. So if you have $60,000 in unsecured debt, the Trustee fee would be $6,000. If you have other priority and secured debt (home, car, attorney fees) that would be added on as well, and the 10% Trustee fee too. You're basically paying the Trustee to pay the creditors.