Ch 13 payment plan negotiation and estimates

[AZNoName]

My husband and I havent filed yet, but I'm getting the info ready for the attorney. We net about 6K a month, and my attorney estimated our pmt to be 700-800 a month roughly for 5 years. Does this seem accurate based on your experience?

We have a home thats upside down 120K which we will surrender in the Bk. We have 17K of credit card debt (with minimums of 400/mo), but the real issue we're filing is because we're being sued, and could expect a judgement of 100K possibly. The judgement is coming in November.

When we do come up with a payment plan, can the debtor negotiate with the trustee on payments that are feasable? I hear about these horrendous payment plans where debtors are totally strapped and broke for 5 years. That scares the crap out of me. Can the trustee seriously think they're entitled to 100% of my disposable income?

[karm43]

Who is sueing you? Think it makes a difference.

[AZNoName]

My husband used to own a business, and they purchased a building. The building is now in foreclosure and the bank is sueing us for the deficiency on the loan.

[LadyInTheRed]

Welcome to the board! If you haven't done so already, please spend some time reading the stickies and other existing threads. You may find answers to your questions and to questions you haven't yet thought of.

Nobody here can tell you what is an accurate Chap 13 plan payment in your circumstance. We could guess if $700 - 800 is realistic if you tell us your household size, the balances of your secured debts and the value of property securing them and whether you have any tax debt. Also, tell us if you have any non exempt assets (AZ exemptions are listed at http://www.azb.uscourts.gov/document...exemptions.pdf). Even with that information, we would only be guessing. You can try the means test calculator at http://www.legalconsumer.com/bankrup...3&sponsor=nolo. It will estimate what your plan payment would be in a Chap 13. But, there are many factors that could make that inaccurate. The best way to confirm your husband's estimate is to consult with a few experienced bankruptcy attorneys.

The creditors would not negotiate with the trustee regarding the amount of your plan payment. You file your plan which includes a proposed payment. The trustee or a creditor can object to the confirmation of the plan. If somebody does object, you (through your attorney) can negotiate with whoever objects and amend the plan to resolve their objections. For example, they might object to certain expenses you list and you might agree to reduce some or all of those expenses to arrive at a higher plan payment. Or you may be able to convince them that the expenses are reasonable. If you don't come to an agreement, the judge will decide whether your plan should be confirmed.

A Chap 13 is not meant to be easy. But, your plan should be liveable. It will require you to carefully budget and live within your means instead of relying on credit cards. You actually may find you have more money to pay your expenses during your Chap 13 than you did before. My plan payment is less than half of what I was paying to credit cards and my 2nd mortgage that is being stripped. It has given me breathing room, but I am careful to save whatever I can because I can't just pull out my credit card when somebody throws a rock through my car window or the tiles start falling of the shower wall.

The key to having a livable plan is to find an experienced attorney who will work with you to come up with the best confirmable plan possible.

If your debt is mostly your husband's business debt, you may be able to file a non-consumer Chap 7 instead of a Chap 13. Chap 7 filers with mostly business debt do not have to pass the means test.

[newbie2]

When we do come up with a payment plan, can the debtor negotiate with the trustee on payments that are feasable? I hear about these horrendous payment plans where debtors are totally strapped and broke for 5 years. That scares the crap out of me. Can the trustee seriously think they're entitled to 100% of my disposable income?

Yes, the Chapter 13 plan is supposed to include 100% of your disposable income. Getting to the disposable income is your attorneys job. Make darned sure that all of your expenses are accounted for and that you are not scrimping in major categories: Food, utilities, insurance, etc.

[AZNoName]

Thanks, you bring up good points. I'm being very careful in accounting for all expenses I have, including my professional dues and money spent to maintain my credentials. Little stuff... Not sure where that all goes in the paperwork, but I'm accounting for it! thanks!

[karm43]

Did they take the building in a foreclosure?

[AZNoName]

The sale is scheduled in November. The bank took receivership in August though.