Funding a plan question - child support

[FrickinCCs]

I'm confused about funding the Chapter 13 plan. I really need to stop a foreclosure and I'm counting on a Chapter 13 to help. Currently all my income is from child support (over $2k month) and social security benefits. I believe that these sources aren't counted as "disposable income." Well if I don't have any "disposable income" can I still fund a repayment plan?
Does the plan payment amount come from I - J or from the disposable income calculation after the means test (and the standard expenses for my state)?
Also, I think I may need a little more income to make the plan work, but if the plan only accounts for the past 6 months then is it even possible to increase my income in time to make a payment plan work?
I would really appreciate any help.

[HHM]

Your first assumption is wrong...child support, Disability income, etc, ARE counted for purposes of determining disposable income. The code is pretty clear about "all" sources of income.
Why people are confused on this issue is that, child support etc, are exempt as "assets" and they fail to realize that assets and income are 2 different things. Child support as an asset is your right to receive child support...no creditor or trustee can interfere with your right to receive the money (i.e. via garnishment or levy), however, when it comes to determining income, child support, SSDI, is a source of regular recurring funds.

First question, is your house worth more than you owe, or vice-versa

Also, you may need a reality check here...if you can't afford the house, YOU CANT AFFORD THE HOUSE, and the chapter 13 will end up being a big mess, cost you a lot of money, and 6 months down the road, you will end up losing the house anyway. You need to be able to emotionally detach yourself from the house and look at the situation with some financial objectivity. Also, be Leary about making financial decisions about "what might happen" in the future. I see too many debtors with the attitude, "well, as soon as I get this better job, I will be ok"...then a year later, they are deeper in debt, don't have that job, and wasted a year.

Granted, I am making some assumptions, but if you can fill in some more details about your situation, perhaps we can point you in the right direction.

[FrickinCCs]

Thanks HHM for your quick response! I'm trying to save the house because there is maybe $100,000 in equity there. I have about $10,000 in credit card debt and that is it. With the recent divorce I got behind on a few mortgage payments and now I don't have the $15,000 to cure the arrearages. The mortgage companies assigned the trust deed to a lawyer and he won't work with me one bit. (jerk) I just need a little time to be able to make up the $15,000 I still owe on the house.

1. So where does the plan payment amount come from, I - J or the result of the form 22 calculation?
2. I understand that you are saying that child support and social security can be used to fund a plan, but the form 22 calculation specifically makes you subtract them in one of the last sections and when I was trying to figure this all out I read this:

"For purposes of this subsection, the term "disposable income" means current monthly income received by the debtor (other than child support payments, foster care payments, or disability payments for a dependent child made in accordance with applicable nonbankruptcy law to the extent reasonably necessary to be expended for such child) less amounts reasonably necessary to be expended--"

To me that means disposable income specifically excludes child support payments. Maybe you could direct me to where it explains that child support payments can be used to fund the plan.

Thanks for all your help. I really appreciate all the information and support from the members of this forum!

[HHM]

Form 22 is the means test and ONLY relates to whether you can meet the burden to qualify for a chapter 7 BK, your disposable income comes "primarily" from schedules I and J, but the IRS and Census bureau expense figures act as a check on what you can actually qualify for expenses.

With that much alleged equity, the first thing you need to figure out, what is your state's exemption for home equity? The aspect in determining a chapter 13 payment is the amount your unsecured creditors would get from the value of your non-exempt assets.

Since you only have $10K in unsecured, and $15K in arrears, you are looking at a plan that would minimally require about $30K (which includes trustee fee and attorneys fees). If you can afford to pay $30K in 60 months or less, then you should probably file Chapter 13.

[FrickinCCs]

I-J it is then. Thanks for your quick responses HHM!