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Under the median for chapter 13,

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    Under the median for chapter 13,

    If I am under the median for chapter 13 in Cali, does that mean that there is no disposable income calculations? If not then how do i figure out my plan payment? I think I saw somewhere that the most likely it will be 0 payback or close to it as all of your disposable income is already gone and the only thing you need to pay is the trustee fees and the lawyers fees for 36 months?

    For a Chapter 13, that is not the case. The Means Test for a Chapter 13 determines your "disposable monthly income" (DMI) which will serve as the "starting point" for what you will need to pay to the unsecured creditors over the life of your Chapter 13 Plan. You may believe that your DMI is all gone, but you will may be shocked by what is an actual "allowed" expense compared to what you are spending. If you own property you may need to pay a minimum amount to the unsecured creditors based on the results of the "best interest of creditor's test."

    I don't think a Trustee would easily agree to confirm a plan that only pays attorney fees. These are called "fee only" Chapter 13s where there are no creditors being paid through the plan (no secured debt and a 0% plan). The question would be, why file a Chapter 13 and not a Chapter 7 if you have no need to make any payments through the Trustee. The Trustee needs to earn something to manage the case. They would make nothing except on the attorney fees.

    Now, I did have a plan confirmed of 0% for the unsecured creditors but I had a $5,700/month payment for my secured debt being paid through the Trustee. (It went to over $7,000/month at a certain point. The Trustee loved me as they made $570-$700/month writing checks.)

    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

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.


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