Announcement

Collapse

Forum Rules (Everyone Must Read!!!) (updated: 04/28/2015)

Welcome to the Bankruptcy Forum. Bankruptcy (BK) Forum is known as BKForum.com and will be referred to as BKF hereinafter. In order to ensure a long term success of our vibrant community, we have established certain rules and guidelines to which everyone must adhere to. Please take your time to carefully read our rules, before you start to participate in the community.

Things you agree to do:
BKFORUM.com (BKF) users agree to use the search function before starting a new thread. This prevents duplicate discussions and allows for better organized topics.

All BKF users agree to read the sticky posts which may be available at the top of a forum page. These Sticky posts often contain valuable information. They may also outline more rules and guidelines specific for that particular forum, stickies are put in place by that forums moderator(s) or admin(s).

Things you agree not to do:

All BKF users agree not to call people names or write a post simply to make a personal attack, or get a negative reaction; this behavior is not allowed on our forum. The use of derogatory language aimed at anyone will be severely dealt with. There is no need to agree with each other, or to even like each other. However, by signing onto BKForum.com you agree to treat each member and guest with the respect they deserve. No threats or personal attacks will be allowed.

All BKF users agree not to discuss, engage, or encourage any behavior or activity which violates the law. Discussion of drugs, violence, murder, theft, vandalism, fraud or any other issue which could be used to help individuals break the law is strictly forbidden.

All BKF users agree not to "bump" old threads, unless there is a specific benefit to the community by doing so. But in most cases, please don't post in very old threads, instead start new threads.

All BKF users agree not to attempt/use another members account. It is against BKF rules to use any account other than your own. Impersonating another member will result in an immediate ban. It is also against the rules to open more than one account in your own name without permission from a moderator or administrator. If you have been banned for any reason, it is against the rules to open another account. If you were banned temporarily and you are caught using another account you will be banned permanently. Choosing a moniker which is similar in either sound or spelling as a moderator or administrator is strictly forbidden.

All BKF users agree not to private message any moderator, admin, or other member with questions related to their personal circumstances (Questions about the forum or issues with the forum are ok). This forum only works when members share their experience and insights with everyone.

Things you agree not to post:
All BKF users agree not to post any derogatory/racist/or sexist remarks. This includes attachments, links and all information contained within posts, signatures, and avatars, failure to comply with this rule will result in a permanent ban.

All BKF users agree not to post any copyrighted or trademarked information without the express written permission of the owner(s) / proper citation of source.

All BKF users agree not to post any real names, addresses, telephone numbers, email addresses, social security numbers, or any other personal details (their own or other people's).

All BKF users agree not to post links, pictures, attachments, videos, or the like of pornographic content, objectionable material or extreme violence, whether cartoon or real.

All BKF users agree not to use BKF for advertising purposes without a written contract between yourself/company/agent and the administration of BKF. Blatant advertising will result in a ban.

All BKF users agree not to spam the forums. Spam includes but is not limited to posting erroneous, non-relevant-useless, off-topic, or meaningless posts. Spam may also include posts which contain no text, or large areas of blank space between lines. Simply posting emoticons without text is considered spam. BKF is the largest bankruptcy message board and all the content is intended to help other users. Please help us improve the quality of our forum by making sure that your posts are well-worded, spell checked, grammatically correct and syntaxed.

Regarding actions of moderators and administrators:

The forum is no place to air out your opinion or be judgmental of our staff and its capabilities.

All BKF users agree not to abuse or mistreat moderators or administrators. It is against BKF rules to post any information regarding bans or any other action taken by a member of the moderating or administrative team. If you wish to discuss bans or warnings please do so via PM. To place a complaint against a moderator, send a PM to a super moderator. All Moderators are equal, any decision made by a moderator must be adhered to. If a moderator tells you something you do not like, do not go to another moderator looking for a different answer. If you are caught doing this you will be banned. The moderators work as a team and respect the decisions made by their peers and will help enforce them unless an administrator tells them differently.
If you have an issue with how the forum is run, then notify one of our administrator and we will look into the situation. We have in the past and still do appreciate any input that you offer this forum. But critical input and/or judgmental postings towards the staff will result in you getting banned.


Should you find a thread offensive or out of line, then notify a Mod in a PM so they can evaluate the situation and do the action deemed necessary.

All moderators do have active "other" lives outside of the forum and help moderate this forum in their spare time throughout the days and weeks.

If you have a problem with a member or Mod follow the proper channels of reporting it.

BKF reserves the right to delete any posts which contain anti-BKF comments or discussion. Any bashing of moderators or administrators, or any of their discussion or actions will also be deleted, and the responsible posting party(s) will be banned. Any public anti-BKF advertising, communication, or posts on another forum will result in permanent bans as well.

All warnings and bans are decided by individual moderators and administrators. Warnings are preferable to bans however, for serious offenses and repeat abusers bans will go into effect. The length of the bans can vary from several hours to permanent.

All messages posted or sent including through PM are the property of BKforum.com.

All BKF users agree not to advertiser on the forum (Niether by posting, private messaging or using your signature). If you are a company/attorney/legal adviser wishing to advertise on the site or sell a product, you must contact the head administrator and inquire about our advertising packages.

All bankruptcy related opinions expressed on BKForum.com are those of their authors and not necessarily of BKF, its staff or representatives.

You agree not to copy any material/post/content from BKF without written permission from our head administrator .

By posting on this forum you agree to these terms and conditions, including any punishment deemed appropriate by moderators or administrators in the event of an offense.

Administrators/Moderators can change these rules at any time without prior notice.
See more
See less

Chapter 13 and start of dual income questions?

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Chapter 13 and start of dual income questions?

    Currently my wife and I are starting to drown. We are a month behind on our house and car payment as well as slipping on all our other accounts. Our debt is split between us (totaling 40k in unsecured). I could tell the story of "why" we ended up with so much debt but everyone has heard it before.

    I believe I just miss the cut off for Chapter 7 income requirements for my family size. So I am trying to educate myself on the process of chapter 13 and hoping for some input here. =)

    First of all my CC's and store account interest rates are extremely high (like many). My wife got in an accident and had to resign from her job, and then was diagnosed with hasmimoto's and was pretty sick for awhile (still hit and miss but better). So she made the decision to go back to school as she was able to start with online classes and avoid driving (we also needed to defer her current loans). So currently we are living off of one income. Things slowly slipped away but I don't want her to drop out of school, even if she did her field didn't pay well and we were living week to week. Her new career path will lead to much higher pay eventually (hopefully). And work out better for a family (no more 1 1/2 hour drives).

    Right now we pay a total of about 1500 - 1600 monthly in high interest payments. As mentioned between us we hold about 40k of total debt. From what I have learned it seems in chapter 13 they structure your re-payment around your living expenses. However I was working up some numbers and realized if we paid back 100% of the 40k over 5 years our payments should come out around 670 a month. I am not sure how much in fee's get added though. This brings me to the cross-roads on what everyone else would do.

    Would it be best to just setup 100% re-payment, if I did would they ignore additional income that gets added? That way I never have to worry about my payments increasing over the plan? Once setup in a plan could you just pay off the remainder if you do the 100% re-payment? If you ended up with a lump some of money (inheritance)? I was not sure if you get charged with some kind of penalty if you are able to pay it off early, such as the interest that would've been incurred by the credit companies during the time frame?

    Basically I am wondering if you guys would try to get the smallest payment possible, or just go with 100% to avoid any surprises?

    Last question, when re-paying 100% back do creditors tend to dispute it less?

    And ya I am sure I need to talk to an attorney, but wanted to see if anyone has been in this position?



    Last edited by Taipans; 08-07-2017, 09:34 AM.

  • #2
    The decision to pay 100% of what you owe (which will become 100% of the "claims"- get familiar with that word- made by creditors after you file) depends on your ability to pay that 100% and still have enough left over for you living expenses. If you do not think that you will have enough to cover your living expenses at 100% (you believe that you will), than maybe having a plan that pays creditor your "disposable monthly income" (less than 100% and after your declared living expenses) is the way to go. Keep in mind that for more than a few chapter 13 debtors, living on a "DMI" plan can be a spartan experience. That decision is up to you. That said, one goal of Ch 13 bankruptcy is to be able to pay off you debt as soon as possible and if you can't do that, then pay it off successfully in 3 to 5 years. In a 100% plan you should be able to pay off early without any penalty. In a DMI/less than 100% plan, it's 36 or 60 months, no early payoff permitted, unless of course you come into money that can put you at 100%. you do not pay interest during the plan. The creditors do add interest to their claims on your debt that may accrue up to the date of the claim. Now if your case is dismissed at any time during your BK, the creditors can collect the amount you owe plus any interest lost during the payback period.

    I don't know what profession you wife is in, but I would advise that in BK, Develop your Ch 13 plan for the today that you actually live in, not for the tomorrow you think you will live in because tomorrow is usually carved in mud and not in stone. Also keep in mind that during your BK, Mr. Murphy of Murphy's Law occasionally pays a visit to give you a roof leak, a blown engine, a busted dishwasher and the medical crises that you are too well familiar with. Except that during BK you will only have cash to cover those expenses, though the trustee may allow a car loan. If you get more $$, then tell your attorney, you can always file a modification to your plan after its confirmed.

    Also, you will not know what your unsecured debt will be until your plan is ready to be confirmed by the BK Court. Your creditors will be given 90 days after the 341 meeting to file a claim and not all creditors file claims (though many file between your petition date and 341 date), which means that you may not have as much debt to pay back post-petition as you did pre-petition. My unsecured debt was only half of what it originally was because two of my CC companies that held 1/2 of my unsecured debt did not file claims by the "bar date" (deadline). Once that bar date passes, you wlll know for sure whether 100% or DMI is right for you. Maybe all your creditors file claims, maybe some don't.

    A creditor will not usually object to your plan even if paying DMI. Creditors rarely show up at 341 meetings. Whether you pay 100% or 10% it most likely won't matter to your creditors. It is also likely that, after you file, your creditors will sell your unsecured debt to debt buying companies for pennies on the dollar. About 75-80% of my unsecured debt is held by debt buyers and not the original creditors, all of it sold after I filed my Ch 13 petition.
    Last edited by switch625; 08-07-2017, 11:15 PM.

    Comment


    • #3
      Thank you very much Switch for the response!

      living on a "DMI" plan can be a spartan experience
      Does this mean it becomes a heroic battle to survive? I wasn't sure. =)

      though the trustee may allow a car loan
      Do you mean a new car loan? Or having one that was re-affirmed? I currently have a car loan although the car of course is worth a bit less than the loan anymore.

      no early payoff permitted, unless of course you come into money that can put you at 100%
      So lets say you inherit enough to cover the remaining amount to pay you can do that without penalty (or added CC interest). But you cannot start making say larger payments to speed it up? I was a bit confused on that.

      I would advise that in BK, Develop your Ch 13 plan for the today that you actually live in
      OK so IF we went with a DMI plan and my wife started working they would just modify are current plan to incorporate a larger payback? I assume based on only which creditors filed by the bar date? (the old ones don't get another go at it?)


      I am not sure what to do at this point, obviously we will speak to an attorney. I am hoping with the information we can provide he / she might have an idea on what we might get approved for. It almost seems by reading your response that if we just went with a DMI that it would be less stress up front. As we are bringing in more income we can raise it closer or up to 100%. That way for now (as you said future is carved in mud) we can be a bit more secure. The one thing we will have coming into play are pretty large student loan payments (still on deferment). Once they come due we will have a HUGE chunk of money going out. At that time can that be considered for a modification?

      Thanks again for the help!

      Comment


      • #4
        Does this mean it becomes a heroic battle to survive? I wasn't sure. =)
        Lol, but what you are allowed for living expenses does not leave much else remaining for anything else of leisure or enjoyment, or even emergency expenses. Look at a Schedule J (expenses) and the Form 22 C for what can be claimed. Note that you do not see "vacations", "date nights" "Christmas/birthday gifts" as living expenses. Some trustees have even been known the question pet food as an expense! As you read this forum you will find that a number of people find a Ch 13 plan tough to do. It is common knowledge that a majority of Ch 13s fail. As you move along and get pay increases if you are on a salary, it should get easier. But if you lose income, you should file a motion to modify to pay a lower amount.

        Do you mean a new car loan? Or having one that was re-affirmed? I currently have a car loan although the car of course is worth a bit less than the loan anymore.
        Getting a new loan and reaffirming an existing loan are two different things. I know nothing about the re-affirmation process, but if you find that you need a replacement car, you would need the trustee's permission before getting that loan.

        So lets say you inherit enough to cover the remaining amount to pay you can do that without penalty (or added CC interest). But you cannot start making say larger payments to speed it up? I was a bit confused on that.
        That is correct. There is no interest pre-penalty for payoff that I am aware of and you can't make extra payments to speed up a DMI plan. You may pay the trustee fee when paying off early in a 100% plan, but I'm not sure if that is for the remainder of months or not. If the trustee notices that you are paying extra, they can just increase your plan base and monthly payment because you have more DMI. As for a 100% plan, someone more knowledgeable than me can answer that, but I would think yes.

        OK so IF we went with a DMI plan and my wife started working they would just modify are current plan to incorporate a larger payback? I assume based on only which creditors filed by the bar date? (the old ones don't get another go at it?)
        Yes, you can file a modification to go to 100%. If you live in a district where the trustee wants copies of tax returns every year or and income/expense statement, your plan payment may go up with an increase in income. Yes, after the bar date, no more claims are accepted from unsecureds, but they could try and cite some excuse for the delay (and you can file an objection to the claim because of the late filing). Did not happen in my case.

        I am not sure what to do at this point, obviously we will speak to an attorney. I am hoping with the information we can provide he / she might have an idea on what we might get approved for. It almost seems by reading your response that if we just went with a DMI that it would be less stress up front. As we are bringing in more income we can raise it closer or up to 100%. That way for now (as you said future is carved in mud) we can be a bit more secure. The one thing we will have coming into play are pretty large student loan payments (still on deferment). Once they come due we will have a HUGE chunk of money going out. At that time can that be considered for a modification?
        Thanks again for the help!
        There is no eligibility requirement to meet per se to do a mod. You can file a motion to do one at any time. Post-confirmation mods require filing a motion in court to modify and you submit a revised plan showing the new payment. I believe that the court approves it if the new plan is "feasible" meaning that you pay your creditors an amount they would get if you filed Chapter 7 (the total of non-exempt assets) and your income at time of modification supports the new payments.

        Comment


        • #5
          Your goal should never be to pay 100% of claims. You want the lowest payment you can get based on your DMI. If you can afford to pay 100%, the trustee will make sure that happens. If you are lucky enough to have a plan payment that leaves you with extra cash each month, save it. If you get to the point where you can end your Chap 13 early by paying 100% of claims, then you can ask the trustee for a pay off amount and make the payment.

          Don't assume you can't get a Chap 7 discharge just because of your income. Many people with high income can qualify for a Chap 7.

          You know when you will have to start paying on your student loans, so, tell that to your attorney so it can be factored into the plan from the beginning, if that's an option.
          LadyInTheRed is in the black!
          Filed Chap 13 April 2010. Discharged May 2015.
          $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

          Comment


          • #6
            Originally posted by LadyInTheRed View Post
            If you get to the point where you can end your Chap 13 early by paying 100% of claims.
            Sorry I just saw your replay (didn't get notified), when you say paying over Chapter 13 early via paying 100% of claims you are saying the total amount I filed, not the adjusted amount inside payment plan correct? If that's so, do the creditors then get to add all incurred interest from that time period onto the total?

            Thanks

            Comment


            • #7
              It would be 100% of the allowed claims. The allowed claims are typically listed in the order confirming plan as an exhibit. You would need to pay 100% of the value of each claim as filed with the court. So, if your plan says that you'll pay them $100 over the life of the plan, but the claim reflects that the balance is $2,500, you would pay the latter.
              Last edited by justbroke; 09-06-2017, 12:31 PM.
              Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
              Status: (Auto) Discharged and Closed! 5/10
              Visit My BKForum Blog: justbroke's Blog


              I am not an attorney. Any advice provided is not legal advice.

              Comment


              • #8
                Thank you for the response justbroke! I had a feeling that's how it works. So lets say during the payment plan the creditors received payments that brought the claimed balance down. Does that just burn up and you start right back where you started (on claimed amount). And just to be sure, the creditor can not add any extra interest to that amount correct?

                REALLY appreciate the help! Just trying to get more of an idea on what could happen.

                Comment


                • #9
                  If a debtor, in a Chapter 13, decided to pay 100% of the allowed unsecured claims, then they would pay the total of the allowed unsecured claims less the amount paid to date. There is no interest.
                  Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                  Status: (Auto) Discharged and Closed! 5/10
                  Visit My BKForum Blog: justbroke's Blog


                  I am not an attorney. Any advice provided is not legal advice.

                  Comment


                  • #10
                    Great, thank you very much!

                    Comment

                    Unconfigured Ad Widget

                    Collapse
                    Working...
                    X