top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

Having extra $ in the bank when starting a 100% pay back

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

    Having extra $ in the bank when starting a 100% pay back

    Hi All,

    We are getting ready to file for Ch 13, and based on my income there is no question that the plan will be to pay back 100%. That being the case, I am assuming that we will be able to keep any extra money that we have in the bank over and above the plan payment amount as a cushion for emergencies. Or, will the trustee require us to pay any extra money that we have up front?

    Thanks!

    #2
    why would you keep the money in the bank?
    Ch 7 filed 8/15/11 341 9/22/11 Discharge 11/28/11
    The rebuilding begins

    Comment


      #3
      Why wouldn't I? Why would I not want to have some money in the bank for emergencies? Sorry, but I don't understand where you're coming from.

      Comment


        #4
        Yes, in a 100% payback plan, you can pretty much have unlimited funds in the bank. No worries! It's definitely a good idea to have an emergency fund from the get-go.
        Filed Chapter 13 on 2-28-10. 341 completed 4/14/10. Confirmed 5/14/10. Lien strip granted 2/2/11
        0% payback to unsecured creditors, 56 payments down, 4 to go....

        Comment


          #5
          Originally posted by greenthinker View Post
          Why wouldn't I? Why would I not want to have some money in the bank for emergencies? Sorry, but I don't understand where you're coming from.
          Sorry green thinker, I misread your original post. I was assuming you were asking about leaving $$ but it wasnt a 100 percent payback.
          Ch 7 filed 8/15/11 341 9/22/11 Discharge 11/28/11
          The rebuilding begins

          Comment


            #6
            Thanks, momofthree. That's what I thought, but it is good to hear it from someone else.

            Comment


              #7
              A good rule of thumb is this: If you have $20,000 that you can't exempt, then you have to pay in at least $20,000 to your unsecured creditors over the life of the plan.
              Filed Chapter 13 02/2006 - Confirmed 05/2006 - Discharged 09/2011
              I'm not an attorney. My replies are merely suggestions or observations, not legal advice. As always, consult with an attorney before making any decisions.

              Comment


                #8
                The $ in the bank will / can be taken by the trustee if you cannot exempt ALL of it...regardless if you will be in a 100% plan or not. It will work like this: Using newbie2's example, let's say you have 20K in the bank...and can only exempt 10K of it... that means the other 10K can be dealt with as follows:

                1. Trustee takes it upfront, and shortens your plan time since you will be in a 100% plan

                OR

                2. Trustee leaves it, but in order to do so, you have to pay it back into your plan (Ch. 7 liq. test)

                One way or the other, unless you can totally exempt that $...you'll be paying for it somehow..some way. As momofthree stated however, once confirmed (if at 100% to unsecured creditors) then anything over and above your plan payment should be yours to keep.

                Comment


                  #9
                  Actually, The debtor's plan must satisfy the "liquidation test", i.e., the plan must propose to pay creditors at least as much as they would have received in a Chapter 7 proceeding and administrable assets were liquidated by a bankruptcy trustee to pay the claims of creditors.
                  If you had property or cash above and beyond all liens, leases, and available exemptions, worth $10,000. Your Chapter 13 plan must propose to pay creditors at least $10,000 over its duration.

                  If you are in a 100% plan the courts usually are much more forgiving and will allow you to keep most/all non-exempt property, and not have to pay it in to shorten to the plan.
                  Filed CH13 - 06/2009
                  Confirmed - 01/2010

                  Comment


                    #10
                    Thanks everyone for your great responses. The amount that we would expect to have in the bank would be far less than $10K...probably $3K - $5K. And yes, our plan would easily satisfy the liquidation test. So, given those facts, it sounds like we would be able to keep that amount in the bank.

                    Comment

                    bottom Ad Widget

                    Collapse
                    Working...
                    X