$0 Payment Ch 13?

[HHM]

ch7 lien strip/settlement

We should really try to come up with a better name for this Calling it a chapter 7 lien strip is just sooooo misleading :laugh

[pcn]

We should really try to come up with a better name for this Calling it a chapter 7 lien strip is just sooooo misleading :laugh

Sorry, I know. I added the "settlement" to the description to try to help with the accuracy.

[walkthaplank]

Just found out last week we have a 5k penalty due for an early 401k withdrawl. Why?

This is a reason to be in a CH13 rather than a 7. Just like lien stripping or curing arrears on secured debts.

So in your case it would pay to be in a 13.

[justbroke]

How you can sometimes get around this is by inserting language into the plan about devoting future disposable income to the plan, etc etc.

I still don't see how these plans are confirmed. The Trustee should be livid, as the administrative costs are a pain. I mean, the Trustee makes nothing, really. The Trustee loves my case... making over $30K to send out a total of about 360 checks over 5 years. I want that job!

[pcn]

This is a reason to be in a CH13 rather than a 7. Just like lien stripping or curing arrears on secured debts.

So in your case it would pay to be in a 13.

[justbroke]

By "pay to be in a 13" do you mean discharge the back taxes?
Ours is from our 2007 taxes, so I was under the impression that it couldn’t be discharged. Is there another benefit to doing the 13 in the case of back taxes? Thanks.

Well, yes there is. First, it's to be in a payment plan that spreads them out 36-60 months. If you are under the "normal" IRS guidelines, it's either $350/month or some crazy formula (not too unlike the "Means Test") to determine how much you can pay monthly.

Second, there are parts of the taxes that can be discharged. The IRS Taxes are broken into the past due amount, plus penalties and interest. The penalties are dischargeable in a Chapter 13. So, if your Chapter 13 only pays a 10% dividend to unsecured creditors, you'd only pay 10% of the IRS penalties and receive a discharge of the rest. I will be discharging about $2K in IRS penalties since I'm in a 0% unsecured payment plan.

[CH33 Paralegal]

Most courts wouldn't allow a CH13 where only the attorney and trustee got paid.