Max to pay back?

[Mark80]

I keep reading that you have to pay back "no less" then the minimum required if you went Chapter 7. Do they ever make you pay back "more" then your balances? Meaning adding interest on top of what you already owe? Why I ask this is if the worst case scenario for me is 100% payback over 3 years with no extra interest I could just make it. It would be less then paying the minimums and getting no where.


Thanks for any advice

[woeisme]

You have to pay a certain percentage to the trustee, and then depending on the local jurisdiction rules, you may or may not have to pay interest on the debts, although it's almost guarenteed to be a much lower rate than the interest you are currently paying. So yes, you may have to pay back more than 100% because of the added trustee and interest fees. In my case, my trustee only charges 2.7%, which is quite low, and 0% interest, so if you are in a low fee/0% interest district like I am, then you may not have to pay much over 100%.

I'm curious why you used the timeline of 3 years. Most CH 13 are 5-year payback plans these days, unless you are under the median income for your area. In that case, you would be eligible to file CH 7, which might be beneficial or not, depending on the assets you want to protect. (sounded like you might be protecting assets since you mentioned the clause that you must pay back at least as much as creditors would get in a CH 7.)

I've never thought about the case of a below median filer with so many assets that they'd have to do 100% payback, so I don't know if you could extend the payments more than 3 years in that situation or not so that you could satisfy the "at least as much as the creditors would recieve in a CH 7" rule if your fees add a lot to the plan. You can get free consultations with lawyers though, and they should be able to answer that question for you. You can go to the US Trustee website to find out what the trustee fees are for your district.

[qwertysue]

Keep in mind too, all of your creditors need to file claims....sometimes they all do, sometimes they don't!

.

[Mark80]

Thanks for the replies!

I thought they always forced you to go 3-year if income allowed it. If I had that broken down over a 5-year period it wouldn't be nearly as horrible. I have a house and car that I want to keep, so I figured chapter 13 was my only option. I have a wife 1 daughter and 1 step daughter I claim every-other year but she lives with me outside of the every other weekend deal. I also am expecting another child due in September. I make 79k a year and my wife is a student.

I figured I would be above the means to qualify for chapter 7.

Also one reason why I am worried about this is because I currently pay my parents 300 a week for a loan I got when I bought my home. I still owe them another 18 payments or so. And since its not a "real" loan contract deal the court I am sure wont take this into consideration and over anything I want to pay my parents back!

[MajorMike]

Wait til after September when you're child is born and you could be under the median income for 2 kids instead of one which could squeak you into a 7. Do the means test with one child and two and see how it comes out. The loan to your parents has to be considered just that or you're going to have a tough time paying your chapter 13 payments because you are supposed to put all expendable income into the plan to pay your creditors etc. If you don't put them in and the trustee doesn't approve your attorneys proposed payment or increases it, you'll be in a tight bind. If you include your parents, they will get paid just as your creditors would from the trustee and if you have any extra money after that payment, you could make it up to them. You need to talk to an attorney ( at least 2-3 ) and get some advice. It's usually a free consultation. You can put your parents down as a creditor in a chapter 13.

[Mark80]

Wait til after September when you're child is born and you could be under the median income for 2 kids instead of one which could squeak you into a 7. Do the means test with one child and two and see how it comes out. The loan to your parents has to be considered just that or you're going to have a tough time paying your chapter 13 payments because you are supposed to put all expendable income into the plan to pay your creditors etc. If you don't put them in and the trustee doesn't approve your attorneys proposed payment or increases it, you'll be in a tight bind. If you include your parents, they will get paid just as your creditors would from the trustee and if you have any extra money after that payment, you could make it up to them. You need to talk to an attorney ( at least 2-3 ) and get some advice. It's usually a free consultation. You can put your parents down as a creditor in a chapter 13.

Thanks Mike,

So does my Step-Daughter who lives with me 99% of the year not count? I will defaintly try and tread water until my new addition is born just to have more piled onto my outgoing expenses. Its good to hear I can infact include my parents loan, obviously I do not want them to know, but you have to do what you have to do. My biggest fear is them trying to bail me out, which I would much rather do this chapter 13 and pay it back on my own.

Now its time to find a good lawyer, ugh which I am dreading. Might aswell meet with them and ask 1 vs 2 children as you suggested!

Thanks!

[MOMof3]

We were able to file in February 07 & use our "future" expenses for our baby due in April 07. Meet with an attorney & find out because you could just be wasting time for no reason.

[Mark80]

We were able to file in February 07 & use our "future" expenses for our baby due in April 07. Meet with an attorney & find out because you could just be wasting time for no reason.

Ok I will make sure to find that out. I was hoping this was the case! Thank you!

[woeisme]

If the step-daughter lives predominantly at your house and your family provides the majority of the support for her, then you should be able to count her as part of your household.

[woeisme]

Unfortunately, they will also count any child support payments that you and your wife get for your step-daughter in the income calculation too.

[Mark80]

Unfortunately, they will also count any child support payments that you and your wife get for your step-daughter in the income calculation too.

Ugh, that sucks. I am not including my wife on this as none of the debt is in her name. We don't get much in child support, around 60bucks a week. Hopefully it wont cause the payments to go to much higher.

[MOMof3]

Will your new baby be in daycare? We were able to include $200/week for daycare expenses for her even though she wasn't born yet. We also included increased expenses for diapers/formula, etc... Our trustee did not make any objections to our astronomical daycare costs (I have 2 other children that have before/after school & vacation care). I actually went to several local centers and got their rates--proof, just in case a red flag went up.

[Mark80]

Will your new baby be in daycare? We were able to include $200/week for daycare expenses for her even though she wasn't born yet. We also included increased expenses for diapers/formula, etc... Our trustee did not make any objections to our astronomical daycare costs (I have 2 other children that have before/after school & vacation care). I actually went to several local centers and got their rates--proof, just in case a red flag went up.

In all reality no, my wife will stay at home with the new baby. She plans on taking that semester off from college and then going back in the evenings come january. I will keep in mind the diapers and formula addition though! Thanks for that tip!