Payment on Stuff

[ConfusedinOC]

I am not sure of the following so please clarify.

If I wanted to keep non-exempt stuff valued at about $20K; how would it be treated in a 60 month plan? Would it be $20/60months = $333/month on top of the the DMI or would the $333 be included in the DMI?

Basically am I going to have to pay the $333/month on top of the plan payment which in turn cuts into my monthly budget/spending money?

[becky20]

Pretty sure the $333 would be on top of your DMI. They're not going to "rob" your other creditors of whatever they should be getting so you can keep an asset...

[forgotten]

My understand is you simply need to pay as much as they would have gotten in a chapter 7 liquidation.

For example: You have a $20k non-exempt asset.
Your DMI is: $500/mo @ 60mos = $30k - You are fine here.
Your DMI is: $200/mo @ 60mos = $12k - You could not keep the asset here unless you could pay at least $333/mo (which would be over your DMI).

However, i'm no expert so I could very well be wrong.

[ConfusedinOC]

forgotten:

From what I have read I believe you may be correct (I hope). Can one of the moderators/gurus chime in?

[walkthaplank]

Confused, if you aren't able to exempt all of your assets under California's exemptions you are either doing something very wrong or you have a couple of high value assets that you might be able to get appraised to a lesser value.

Remember in your personal property valuations you should be using "yard sale has to go today" prices, not replacement values. A home in California, especially if purchased or refinanced in the last 3 or 4 years will likely be underwater.

If you have property that you cannot exempt after all of that and you are in a less than 100% repayment plant AND you want to keep it, they'll take the value of the non-exempt items and divide it over the life of the plan.

[ConfusedinOC]

So if I'm in less than 100% plan and I wanted to keep the asset would I have to repay that asset above and beyond my DMI?
If so, since I won't be filing for maybe a year then I should just sell for fair market value and blow the cash.

[justbroke]

forgotten actually pretty much nailed it.

This is called the "liquidation test". The unsecured creditors need to receive at least as much as they would have received had the debtor liquidated their estate under Chapter 7. More specifically, a Chapter 13 plan can only be confirmed if... "the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title on such date" (11 USC 1325(a)(4).)

For example: You have a $20k non-exempt asset.

Your DMI is: $500/mo @ 60mos = $30k - You are fine here.
Your DMI is: $200/mo @ 60mos = $12k - You could not keep the asset here unless you could pay at least $333/mo (which would be over your DMI).

I should just go back to bed. You guys are good at this.

(I think I may have responded incorrectly once before, but I don't get much sleep anyhow.)

So if I'm in less than 100% plan and I wanted to keep the asset would I have to repay that asset above and beyond my DMI?

No, you would have to commit at least the liquidated value of the non-exempt asset to unsecured creditors. Forgotten has a good example, as shown above.

[ConfusedinOC]

Then I guess I won't sell the asset and blow all the cash. I will be in less than 100% plan but my DMI will cover the asset.

This site is great. Before ever visiting the forum I was thinking of gifting the asset to family (a big no no).