Can't afford chapter 13 make too much for 7

[JSchrader]

Duke,
You said that you are below median income. Is that statement based on the means test calculation? If so, then barring some unusual circumstances, you are eligible for Chapter 7.
If you just recently lost some income, you might need to wait a little while so that your income for the last 6 months would place you below median income.

[tobee43]

it took us over 2 years to plan our bk....carefully and skillfully....and legally.... we didn't clear the means test...however, there are also exceptions as in expenses...so there are many ways to fit a square peg in a round hole...providing it's legal and truthful.

[dukedog]

No, I am above the median. I don't know....The more I read the more discouraged I get. How do they figure chap 13 payments?? Is it 75% of what is owed? Is there a disposable income limit on that as well. I will give up my vehicle if my payments for 13 are decent..

[tobee43]

re post your question in the chapter 13 forum and see what type of responses you get. some have 0% while others 100%...it all depends on your personal situation.

do not be discouraged. you just may have to wait it out, or use a different stradagy....

[ccsjoe]

duke, hunt around for a few free consultations with attorneys once you have some specific questions you know need to be answered in order for you to make your decision. Some bk's take a lot of planning, like my friend tobee's. Some don't, like mine. I went from not knowing to filing in one month.

Take the time to formulate questions and get some free consultations. Then you can make an educated decision without feeling like you're drowning in information overload.

[dukedog]

Yea, my own personal disaster seem minor compared to some others here. I do feel fortunate.

[momofthree]

No, I am above the median. I don't know....The more I read the more discouraged I get. How do they figure chap 13 payments?? Is it 75% of what is owed? Is there a disposable income limit on that as well. I will give up my vehicle if my payments for 13 are decent..

Your ch.13 payment is based on a combination of non-exempt assets & disposable income. Most debtors are in no-asset cases, meaning they can exempt all their belongings. In a non-asset case, there is no minimum that has to be paid in. You simply pledge your disposable monthly income for 36-60 months. Being over the median, you'd automatically be in a 60-month plan. Some districts use disposable income from the means test, but I believe most use the disposable income based off of your I & J schedules. You are allowed reasonable living expenses, even including a recreation expense. Ch.13 is not the "debtors prison" that some people make it out to be.

If you have non-exempt assets that you're keeping, or back taxes, mortgage arrears, etc, then that does create a min. to be paid into the plan....

[dukedog]

So, surrendering a vehicle on loan would not benifit me as far as what I get to keep in my pocket after trustee payment? And If I do get chapter 7, If I surrender that $500 truck payment, $500 will be added to my DMI giving me less of a chance to qualify. Correct? I have even thought of giving back the vehicle and doing a DMP, but I am Upside down at least $10k. I would end up getting sued for that 10k. putting me back in a lose lose. These are all the things I would like to talk to an attorny about, but that cost at least $1000.

[momofthree]

Have you had the truck for at least 2.5 years? If so, you can "cram down" the loan to fair market value. The other portion of the loan would become unsecured and paid at the same rate as your other unsecured debt. Something to think about....