Question Payment plan

[Thingshappen]

Hello,

Currently, I am getting my ducks in a row with the objective to file for Chapter 13 next month. I have already hired an attorney and he estimated the payment based on my income and amount of debt. The estimated payment seems high but still better than paying minimum payments on credit cards. I have read that most of the times, the final payment is higher than the initial estimate. So question, based on your personal situation, did your payment change dramatically after the 341 meeting? thank you.

[justbroke]

My payment was exactly what I estimated. You will probably fine that many debtor's payments are the same as projected. The issues come when the Chapter 13 Trustee sees something that you may not see. For example, some debtors estimate their payment but don't consider tax refunds. The Chapter 13 Trustee actually takes your average tax refund (over the last 2 years), divides by 12, and adds it back to your income. This is probably the biggest area where the numbers differ.

Another area where the Chapter 13 Trustee and the debtor have a different number is with respect to expenses. If you exceed any of the "local rule" guidelines or the IRS financial collection standards (the United States Trustee program re-categorization of those standards), then you will get pushback. That pushback will likely lead to a higher payment.

This is why I would recommend waiting for your attorney to estimate the payment. That would be closer to reality than trying to guess without the advantage of local practice.

I'm sure you'll get replies from no changes to big changes.

[Thingshappen]

Thank you justbroke. This has been a stressful process so far and I havent even started it. I know the budget will be tight and I hope that I dont have to do a major repair or get a significant life change in the next five years. It will be difficult to put money aside for emergencies. That is my biggest worry. I am okay if I have to eat rice and beans with an egg. I actually enjoy it. lol. I typically get a small 3-4 percent salary increase every year. I hope the trustee doesnt go after it.

[Carmella]

Our payment was the same, they tried to get more after the 341 meeting, but since it was 100% it didn't increase.

I doubt they will try to to take 3-4% raises. I have read it's only over 10% when they might get interested.

[brokenurse]

Our payment increased 5 times, but we didn't start at a 100% plan. We shifted to 100% about halfway through. Our current payment is more than double the original payment. We got lucky, though, when my husband got a significant raise; since we were already at 100% they did not come after it.

[Thingshappen]

Question. Is the 100% payment plan based on the amount of debt "claimed" by the creditors after filing or the outstanding debt before filing? thanks

[justbroke]

Well, a true 100% plan is based on paying all the allowed unsecured claims. That means all of the claims that wee submitted, adjusted according based on objections, and in their entire amount.

Most people know whether they are in a 100% plan because the calculation shows that the debtor's DMI (disposable monthly income) is sufficient to repay all those creditors over 3-5 years. This means that the calculation is based on what is in the schedules (what did the debtor list at the time of filing).

That amount may be adjusted based on the creditor never filing a claim, the claim being adjusted, the claim being bifurcated (secured/unsecured), or being disallowed.

[mh321]

Our payment started off exactly what our lawyer estimated. The Trustee tried to say it should have been about $500 more, but ended up exactly what it was estimated at.

Now, about halfway through our plan the Trustee came back and wanted more money. My wife's income dramatically increased so our household income literally doubled. Without going into details, it somehow worked out even better for us in the end. We had one estimate for what our payment was going to go to and the Trustee came back with almost half the estimated amount to the surprise of even our lawyer. We are not on a 100% plan either.

[alaska708]

I’m about to start the 13 process soon. I have over $46000 in unsecured debt but am going to finance a newer used car before filing. I only make $3500 after tax, will have a $650 car payment, a $1,600 rent payment, after bills paid not much left! What’s the lowest payment I can get? Going to start doing my works 401K before filing as I cannot save money and am in my 50’s, god help me.

I had to do a 13 because I filed a 7 approximately 4 years ago, went through a divorce. Just a horrible time in my life.

[shipo]

In your shoes I would do everything as you are doing it except the car; I would opt for a lower priced new car, with extended warranty which should both make sure you'll make it through the five years, but also lower your monthly payment. Had I done that prior to my Chapter 13 I would have come out if it significantly better off than I was.

[alaska708]

That new car is actually a newer used car. Cars are so expensive right now. Just in a really bad position. $25,500 at 18% interest, $500 down, no other choice

[shipo]

You can get a brand new Toyota Corolla for about $21,000. This is the car I wish I'd bought before my Chapter 13; yeah, it has almost zero panache, but it will do the job quite nicely.

[flashoflight]

You can get a brand new Toyota Corolla for about $21,000. This is the car I wish I'd bought before my Chapter 13; yeah, it has almost zero panache, but it will do the job quite nicely.

Not possible at that price in my area. The quoted price on the phone or Internet won't include the market adjustment fee or all of the extras you don't want. They'll let you walk out the door if they think they can't convince you to pay the markups.

[shipo]

In California I might accept that; but for a Corolla in Texas? Nope, not buying that argument.