0% Plan

[anonymuse]

I remember reading on here where someone had a 0% plan.

I'm not sure if I understand the concept. Does it mean that you only pay your secured debts (mortgage, HELOC) and priority debts (student loans) as usual and your unsecured debts are paid back at 0% (thus, no payments are made)?

[aa06a47]

I remember reading on here where someone had a 0% plan.

I'm not sure if I understand the concept. Does it mean that you only pay your secured debts (mortgage, HELOC) and priority debts (student loans) as usual and your unsecured debts are paid back at 0% (thus, no payments are made)?

Yes, this is definatly what it means.!!!

[anonymuse]

Ok, the reason I'm asking is to determine what might happen if I'm forced into Chapter 13 (For example, below median income, but for having $3-5K too much equity in my house.)

Theoretically, if my income went up substantially (say 15%) during the repayment time, would I work for a plan that pays off the secured debts quicker, or would they add back in unsecured debts? (Of course, I'd love to pay off my student loans and HELOC quicker, but not sure if I'd get that lucky.)

[aa06a47]

For 3-5K equity, depends on your trustee, but it will cost him a hell of alot more than that to sell the place. You might make an offer on the equity and agree to give 2K in money for the equity....and then still do a chapter 7. Ask your attorney about this option.


The secured debts that are a part of your payment plan would be paid off first. So, if your payment into the plan goes up, then the secured and priority claims would get paid off faster.

However, Sorry to say that most of that increased income will go to pay off the unsecured creditors once the secured and priority is payed off. As you put it...you are working for the plan.

Of course, below the medium, if your forced into the plan, try and propose a plan to pay everything secured off in 3 years. This way, you won't be forced into a longer payment plan.

Question...are you behind in your mortgage or student loans or HELOC? That would be the only reason to do a chapter 13 if your below the medium. See what you can do as far as a buy out.

[anonymuse]

I am not behind on the mortage, student loans, or HELOC--never a day late. I'm behind on my home owner's association fees (and they have a lien), and it's the medical bills and credit cards that I've barely touched. (And I haven't put anything on my charge card in over a year.) In the student loans, I'm paying minimum right now (I think interest only) and I'd love to be paying a "normal" amount.

[jane taylor]

We are in a 0% plan; hopefully it will go forward. My goal is to pay everything secured off in 3 years except our house and get out of the plan. Don't know yet how feasible this is, but it would be awesome.

[anonymuse]

At least the thought of a 0% plan gives me hope if I don't qualify for Ch 7.

I need to start doing the dreaded attorney consultations again.

[no_it_all]

<snip> Does it mean that you only pay your secured debts (mortgage, HELOC) and priority debts (student loans) as usual <snip>

Student loans are not priority debts....

[anonymuse]

Student loans are not priority debts....

In another post, someone answered that they were unsecured priority debt:

http://www.bankruptcyforum.com/showthread.php?t=7190

Basically, to summarize, here's my situation:

INCOME

$3K Less than median income

DEBTS

SECURED

1. Mortgage -- I've never missed or been late on a payment ($80K)
2. HELOC -- I've never missed, but I was a few days late on one payment; at times only paying minimum/interest only ($13K)
3. Lien -- Got months behind on home owners association dues and they blasted me with unreasonable late charges and lawyer fees ($2K)

UNSECURED - PRIORITY

1. Uncle Sam (Paid $240, but don't think it's all correct--filed an extension and having CPA review it) (<$1K)

2. Student Loans - paying interest only and no late or missing payments ($20K)

UNSECURED - NON-PRIORITY

Lawyer fees (once I choose one and can hopefully get a payment plan)

Overdraft protection on checking account (I didn't realize this was considered "credit" so they've been receiving "preferential" treatment/payment everytime I deposit my paycheck and start the month in the black--otherwise, I can't withdraw cash) (~500)

Medical bills including yearly deductible (30K)

Credit cards (10K)

[aa06a47]

This may be a little on the shaddy side of things, but I'll say it anyways. You might use of of them credit card offeres you get in the mail and pay off your student loans with one of them. Wait 6 months or so, then file. A little sneeky, I know, but then again, I'm no . I read a little on student loans, and no-it-all is correct. I was like you, I thought they were unsecured priority.

[anonymuse]

I wonder if the BK courts are thinking that "the debtor can't discharge them but we won't let us include them as priority unsecureds since they know the student loan companies will work with you to defer payments until after BK"?? (But then again, the law is so poorly written, I don't think anyone was thinking.)

So, you mean those offers I get in the mail that I shred before looking at? LOL Believe me, even though they say pre-approved, no one would give me credit right now.

[SinkingFast]

I saw in interesting filing on PACER.

The couple filed joint and they are in a 100% Secured, 4 year payment plan. They had arrears on their house and their car, and they owed back property taxes. Their Ch 13 plan took in their house and car payments, the arrears, and the taxes. They are discharging all unsecured debt.

The only thing I can think is the people were desperate to keep their home.

[anonymuse]

Aren't we all desperate to keep our homes?

[no_it_all]

Yes, student loans are unsecured non-priority debt. Of course unlike other unsecured non-priority debt (credit cards anyone?) discharging student loans isn't gonna happen!!

[SinkingFast]

Aren't we all desperate to keep our homes?

Which one??

The one we're trying to sell?? Nope! Foreclosure auction later this month.

The one we rent to live in?? Yep!