% Payback (it doesn't matter)

[bklawn]

If you're talking about the non-homestead home (the rental that Mom's living in), the answer is yes. Here's why. You're paying the value of the home down over the 5 years. The assumption is that you are gaining equity. That money should have gone to the creditors. You'd be benefiting from the equity gained over the 5 years of payments. That's why the Trustee may want the value paid back in the plan! (They did this to me when I was keeping my $200K rental property. This would have put me in a 60% plan when I'm in a 0% plan. No way was I going to do that!)

I'm talking about the rental. You cannot apply the entire "homestead" exemption to the Rental. The "unused" homestead exemption can be used as a wildcard, but it is reduced to $5,000 (OCGS 44-13-100(a)(6)). I don't think you can double this.

Also, the motor vehicle allowance is a total of $3,500 in all vehicles (OCGS 44-13-100(a)(3)). I don't think you can double this.

Again, you are going to be paying back a lot of equity into the Plan on the rental and the cars.

ok thanks,, I will see.. you cant win for losing.. so I'm looking at 1800 to 2000 plus fees.. for 5 years just to keep assets that are under water now.. makes good sense.. even though DMI say $800.. Looks like failure before you start..

Thanks just broke.. I will let you know how it turns out once I file..Dont pay to make good money.. This will never happen again for me. getting too old for this..bad timing kid will be going to college next year..

[justbroke]

Even if they have no equity?

If you're talking about the non-homestead home (the rental that Mom's living in), the answer is yes. Here's why. You're paying the value of the home down over the 5 years. The assumption is that you are gaining equity. That money should have gone to the creditors. You'd be benefiting from the equity gained over the 5 years of payments. That's why the Trustee may want the value paid back in the plan! (They did this to me when I was keeping my $200K rental property. This would have put me in a 60% plan when I'm in a 0% plan. No way was I going to do that!)

Yes I am in Georgia I think exempts are 20000 for couples.. They can wont that property it is less then what the balance is and we are current on it with gmac which has the loan.

I'm talking about the rental. You cannot apply the entire "homestead" exemption to the Rental. The "unused" homestead exemption can be used as a wildcard, but it is reduced to $5,000 (OCGS 44-13-100(a)(6)). I don't think you can double this.

Also, the motor vehicle allowance is a total of $3,500 in all vehicles (OCGS 44-13-100(a)(3)). I don't think you can double this.

Again, you are going to be paying back a lot of equity into the Plan on the rental and the cars.

[bklawn]

Overall looks good to me. Looks like you may have to pay the "non-exempt" value of those cars into the Plan. If you're in Florida, and filing together, you'll only get $2K exemption for the cars. That's like $18K exposed (about $20K in equity less the $2K exemption). Remember, I'm talking Florida.

That means $20,000 / 60 or about an additional $333/month you'd have to pay into the plan. If you say your payment is about $800, it would now be $1,333/month.

You might also have trouble with the rental you're keeping. The Trustee may require you to pay that value to the Plan as well. Since you'd need an appraisal, we'll just say it's $30K. So you'd need an additional $500/month in your payment. You're now at $1,833/month.

You might consider paying off Mom's (rental) home during the life of the plan and cramdown the value and the interest rate since it's not your primary residence.

In the end, I think your problem is going to be keeping all those assets, without contributing (more) to the Plan.

Even if they have no equity? Yes I am in Georgia I think exempts are 20000 for couples.. They can wont that property it is less then what the balance is and we are current on it with gmac which has the loan.. it would be hard to get anything for it now.. The other renter can go that is the problem trying to keep it flowing and making payments on it off and on.

[justbroke]

We are planning on filing chapter 13.. I came up with a payment of around $800 plus I guess the secured car payment and fees.. Could the trustee make me pay more based on the assets we have,, which I think is small.. so 800 x 60 $48000 plus fees and car payment right..Thanks

Overall looks good to me. Looks like you may have to pay the "non-exempt" value of those cars into the Plan. If you're in Florida, and filing together, you'll only get $2K exemption for the cars. That's like $18K exposed (about $20K in equity less the $2K exemption). Remember, I'm talking Florida.

That means $20,000 / 60 or about an additional $333/month you'd have to pay into the plan. If you say your payment is about $800, it would now be $1,333/month.

You might also have trouble with the rental you're keeping. The Trustee may require you to pay that value to the Plan as well. Since you'd need an appraisal, we'll just say it's $30K. So you'd need an additional $500/month in your payment. You're now at $1,833/month.

You might consider paying off Mom's (rental) home during the life of the plan and cramdown the value and the interest rate since it's not your primary residence.

In the end, I think your problem is going to be keeping all those assets, without contributing (more) to the Plan.

[bklawn]

HHM, I would like to know what you think. ?Thanks,,

1.. planning on filing Jan instead of Oct. due to the decrease in income from $8600 to about $6500 for six months income. sch j would be around gross $6200 net $4000
wife gross $4018 net $2800 so total income $10200 or $11000.. for means test

My wife & I make $148000 a year 2008, 2009, but next year would be around $135000..
oct filing would be $12600.. if I file Jan 10500 because of no more over time and bonuses..


2. I have primary house 1st $2018 2nd $724
bal $368000 Value is $280000

3. rental house that I will let go 1st $131000 2nd $38000 house value is $97000

4. property which is rental and also my wife mothers house bal $36000 $314payment
value $32000 we are keeping that even if everything goes.. not this...

5. cars honda accord $1500 value own
gmac $14000 value own
camry will pay in plan bal$28000 valve $19000 payment $605
chev truck $5000 value own
These are all off the assets we have, but no equity in anything except cars,

We are planning on filing chapter 13.. I came up with a payment of around $800 plus I guess the secured car payment and fees.. Could the trustee make me pay more based on the assets we have,, which I think is small.. so 800 x 60 $48000 plus fees and car payment right..Thanks

[bklawn]

Because it will become unsecured or the 2nd will file a "deficiency" claim and be unsecured anyhow.

Huh? It is fair. What are your expenses? You are probably entering something wrong. Did you account for payroll taxes? Did you account for housing costs for your locality? How many household members are there?

Just because your "actual" bills are $5,700 doesn't mean that they are allowed. For example, credit card payments go away. You will have to fix a particular amount for food, clothing, non-rent/non-mortgage expenses, car payments, etc.

Justbroke, I have a question and would like to know what you think.

1.. planning on filing Jan instead of Oct. due to the decrease in income from $8600 to about $6500 for six months income. sch j would be around gross $6200 net $4000
wife gross $4018 net $2800 so total income $10200 or $11000.. for means test

My wife & I make $148000 a year 2008, 2009, but next year would be around $135000..
oct filing would be $12600.. if I file Jan 10500 because of no more over time and bonuses..


2. I have primary house 1st $2018 2nd $724
bal $368000 Value is $280000

3. rental house that I will let go 1st $131000 2nd $38000 house value is $97000

4. property which is rental and also my wife mothers house bal $36000 $314payment
value $32000 we are keeping that even if everything goes.. not this...

5. cars honda accord $1500 value own
gmac $14000 value own
camry will pay in plan bal$28000 valve $19000 payment $605
chev truck $5000 value own
These are all off the assets we have, but no equity in anything except cars,

We are planning on filing chapter 13.. I came up with a payment of around $800 plus I guess the secured car payment and fees.. Could the trustee make me pay more based on the assets we have,, which I think is small.. so 800 x 60 $48000 plus fees and car payment right..Thanks

[justbroke]

The question I have is why do I have to pay back the 2nd on the renter house when I'm surrendering it?

Because it will become unsecured or the 2nd will file a "deficiency" claim and be unsecured anyhow.

Also, our take home is not enough to pay bills and make a 3100 payment. The means test is not fare for above income.

Huh? It is fair. What are your expenses? You are probably entering something wrong. Did you account for payroll taxes? Did you account for housing costs for your locality? How many household members are there?

Just because your "actual" bills are $5,700 doesn't mean that they are allowed. For example, credit card payments go away. You will have to fix a particular amount for food, clothing, non-rent/non-mortgage expenses, car payments, etc.

[bklawn]

Means test

I went to see the 5th lawyer today. They all have different payplans based on the means test. He came up with 4000 dispos income..He was crazy. The question I have is why do I have to pay back the 2nd on the renter house when I'm surrendering it?
Also, our take home is not enough to pay bills and make a 3100 payment. The means test is not fare for above income.
Take home is 6700
actual bills 5700


income wife & I 148000 yr
unsecured debt 150000
means test come back. paying 3100

Thanks

[klandsb]

OK so I dont mean to drive you crazy but after sleeping on it ... If you pay 350 a mth lets just say for hypothetical purposes for 10 mths which is $3500 would it be that everyone gets 10% and that would not be paid to them until the end of the plan ???
So credit card #3 would get $70 ?????

[klandsb]

I'm so sorry... I typed in HMM instead of HHM.. Can u tell I have had a long day !!! Havent been sleeping well with all this BK stuff to think about

[klandsb]

HMM. I know you say % doesnt matter but how do they decide who gets what... Say u owe cc #1 $10,000 and cc#2 $5000 cc#3 $700.... So you have lets say $350 a mth dmi..... Do they break it down so everyone gets a fair share but in the end one creditor may get more than the other ???? And it seems kinda time consuming for them to send the pmts to the creditors every mth. Maybe I am missing something

[HHM]

Allen, you should start a new thread with your questions.

And, for the love of all that is holy on the internet, use the ENTER key and put things in paragraphs.

[Allen]

Back to my NDI. My total income is from Social Securtiy and Supplimental Securtiy Income (SSI). These are direct deposited into my acccount. I then write checks for the bills. I know SS and SSI are exempt from a bank levy.

So why do I want to file a chapter 13, which I haven't started yet? Just a week before the bankruptcy laws changed in 2005 I filed a Chapter 7, In Pro Se. I had two judgements. One of them attempted to levy my bank account. Even though my money was exempt, the bank took $75 out of my account for themselves, as a legal fee, just for responding to the levy. I understand this fee is now $100 and all the banks charge this.

All of my debt is from credit cards (and high APRs and fees, which when added together come to over 30% on some of the cards). This levy attempt was just before I filed for Chapter 7. My current credit card debts were incurred AFTER my Chapter 7 was discharged in Feb. 2006. Currently, my debts are listed as paid as agreed in my credit reports. So why file a Chapter 13 now? Well first, Chapter 7 is not an option at this point because 8 years have not passed. Four years will have passed since my chapter 7 discharge in Feb. 2010. So why file for BK at all? (I'm getting to this, so please bear with me as there are some pertinent details to this) I mean being as I am judgement proof and don't own a home or even a car and all my property is exempt (at least I think it would be, I'll get to the possible exceptions shortly) then why file at all?

The first reason I already explained is the levy resonse legal fee the bank takes out your account the same day they receive the levy. Although, I currently do not a any new judgements against me since the chapter 7 since I am (at least of this posting) current on my present debts. The problem is in my state (California) the governator has lowered my SSI benefits by $57 so far and other cuts to my SSI income are on the horizon. The states pay a portion of their residents SSI but not the Social Securtiy. To make up this lose, I've had to partly rely on my credit cards to buy groceries. I can't afford to pay more than the minimum payments now on these high rate cards.

The possible exceptions to my unsecured debt may be Dell, of which I writing this now on their financed (since Dec. 2008) laptop. I also financed a printer through them. The other possible exception is Fingerhut, which I financed a color TV about a year ago. I know Dell claims to have a "Purchase Money Security Interest" on the laptop and printer in their credit agreement and it states they will reposses them in their agreement if one defaults on them. I wish to keep the laptop, the printer and the color TV. In my state, California, all my property would be listed as exempt, system 2, I think. But, can secured property be properly listed as exempt? And if so, would this stop a creditor when one is in bankruptcy?

I read in Nolo's do it yourself Chapter 13 book, that if a creditor has not "perfected'' their lien in 20 days that they then do not have a secured interest and to list thier property on the BK forms as unsecured giving Fedelity Services, Inc. v. Fink 522US211 (1998) as reason.

The reason I wanted to list Dell and Fingerhut as unsecured would be that being as I would have a NDI as zero, being as I need now ALL my income to live on, maybe I wouldn't have to list them as secured creditors and successfully challenge any attempts by them otherwise. Then I wouldn't have to pay Anything on my plan and could keep all my low income to live on.

This would wipe out all my debts legally, that wouldn't turn into judgements and $100 fees to my bank account which I like having to pay my bills, instead of buying money orders. I would then be able to keep $183 of my income to eat mostly. My monthly payments to Dell and Fingerhut are $47.

Perhaps, so my Chap 13 plan would be approved, I should just list Dell and Fingerhut as secured creditors still giving me $136 that I would not have to pay (I think ) to the unsecured creditors. These $183 and $136 amounts are monthly income amounts I would have left over if I did not have to pay my credit cards, Dell and Fingerhut. It would also put a legal end to my unsecured debts and maybe look better on my credit reports with a chap 13 than just defaulting on them. This could be of significance if I want to rent another apartment again. Sorry this was so long but I thought these details are important.

[justbroke]

If I have a zero NDI, all my debts are unsecured, and the liquidation value of my estate is zero, would my plan be confirmed?

Yes, but with some exceptions. There are some Districts, don't ask me to name them but it's only one or two, that require you to pay at least 10% (or something like that). The large majority of the Districts, a Plan can be confirmed with no payments to unsecured creditors.

[QUOTE=Allen;304567 If so, then there would be no payments and my discharge would be in a few months. Right? Or am I just dreaming?[/QUOTE]Dreaming. Generally, you would be paying your secured creditors through your Plan. You would have mortgage and car payments, tax payments and perhaps even arrearages. If you have absolutely nothing being paid, this is HHM's back door Chapter 7, so the question would be... why are you filing a Chapter 13?

[Allen]

Ok...many people are getting hung up on the percent payoff in a chapter 13, meaning the percent that is being paid to unsecured creditors.

Let me say this crystal clear....

The % you pay to your unsecured creditors DOES NOT MATTER.

There is no minimum and it isn't even a factor of your plan. The % payback is a flexible number, it is merely informative. There is not even a reference in the BK code to the % payback. The ONLY numbers that matter in a chapter 13 plan are...
1. Net Disposable income (on the means test, referred to as Disposible Monthly Income, DMI).
2. Liquidation value of your BK estate.

Your net disposable income (NDI) is simply your Gross Income minus your allowed expenses. That is how your plan payment is calculated. If your NDI is $100, then you are paying back $6,000 over 60 months, if your NDI is $1000, you are paying back $60,000 over 60 months. What ever percent payback that equals is what it is; but the % pay back is merely "informative", but has NO legal significance. For example, if you are paying back $100 per month, but you get a $1,000 tax refund, that will necessarily change your % payback.

Liquidation value is simply the value of your non-exempt assets, if any. In a chapter 13, you are required to at least pay the value of non-exempt assets. In many cases, the liquidation value is 0; so your chapter 13 plan payment is simply based off of your NDI. However, if your liquidation value is $50,000, then your chapter 13 plan must "at least" pay back $50,000 over the course of 60 months. Caveat, your plan payment is still going to be based on your NDI so if your NDI would exceed that $50K, you will be paying back the larger amount, where people run into trouble with liquidation value is if they don't have enough NDI to cover the non-exempt equity, in which case, your chapter 13 would be dismissed.

Bottom line, your % payback to unsecured creditors has absolutely, positively, NO legal significance. It is merely an informational number subject to change based on your true NDI over the course of the plan and the creditors that actually file claims.

If I have a zero NDI, all my debts are unsecured, and the liquidation value of my estate is zero, would my plan be confirmed? If so, then there would be no payments and my discharge would be in a few months. Right? Or am I just dreaming?