please help....I'm a nervous wreck.

[regaleagle]

I have retained an attorney and plan to file bankruptcy mid-September. She has advised me to propose a 100% pay back plan over a 5 year term. But based on everything I've read so far, this does not appear to be the best approach.
Here's some background on my situation:

1) I earn approx 100k annually
2) Have a $105,000 mortgage on a rental property that is valued at approx 60k (I plan to surrender in the bk)
3) Appox 60,000 in unsecured debt
4) Own a 1998 car w/no car payments but would like to purchase a new car(advised to not purchase a new car until 1yr after I file with the courts permission)
5) Have disposable income of approx 2.5k monthly after living expenses
6) No property valued over and above state exemptions


My questions are:
1) Is my attorney proposing the best bk solution for my situation?
2) Should I delay purchasing a new car as she has advised?
3) Am I required to pay 100% on unsecured debt

Sorry for all the questions but I am scheduled to meet with my attorney tomorrow for the last time before the petition is filed.

Any assistance you can provide in this forum will be greatly appreciated. Thanks in advance, regaleagle

[HHM]

Something sounds fishy, this attorney either does not know all the ins and outs of chapter 13 or there are other facts you are not telling us.

1. There doesn't seem to be any reason why you would need to pay more than 36 months. if you are surrendering the rental property and only have $60k in debt, there is no reason for you to be in a 60 month plan

2. No, you can buy a new car, but its not the best move.

3. No, absolutely not. Howver, given your disposable income $2500 per month, you will anyway, since in 36 months, you would pay $90K, but only owe $60K.

All in all, you would still have to pay 100% to unsecured given your disposable income, but I see no reason why you would have to pay for 60 months. You could probably complete your plan in less than 36 months. Did your attorney understand that you wanted to surrender the rental property?

[regaleagle]

Thanks for your reply.

The only other thing I can think of is the remaining 45k over and above the value of the rental property is added as an unsecured debt. I understand from my attorney this becomes unsecured debt and is added to the 60k for a total of 105k. But it still doesn't add up for me. What am I missing here?

[HHM]

The only thing I can think of that might make so that you have to pay longer than 36 months is the liquidation value.

In a chapter 13, you have to pay an amount to your unsecured creditor that would equal what they would get if you filed chapter 7 and had your non-exempt assets liquidated. However, at no point does that amount exceed 100%.

Still, at your disposable income of $2500, your plan would be aout 47 months.

You have to factor in the attorney fee and the trustee fee. The trustee fee is usually 10% of the total plan payments.