Was there a "cushion" built into your 13 payment?

[lulabelle]

We were confused why the 13 payment that our attorney is proposing was so high. We would have $10,000 in non-exempt assets (at most) and a $15,000 cram down on our vehicle. Then there are attorney & trustee fees (attorney - $2300 and trustee 9.5%). I thought our payment should be between $500-510 over 5 years. He is proposing $610. He said the extra is "cushion" for in case we would need to modify the plan.

Is this typical? What happens to that extra $6000?

[justbroke]

Any "extra" that you turn over to the Trustee... goes to pay your creditors. I don't understand why an attorney would put "cushion" in favor of the Trustee, unless you're in a District that doesn't like plan less than 10%, or some other reason to appease the Trustee.

[Faust]

What state are you in?

[HHM]

The attorney's explanation seems odd, you don't really need a cushion (at least, not at the outset). But, as was previously mentioned, unsecured's do have to receive SOMETHING in the plan. So that is probably what the extra is about. There is some legitimacy to the attorneys concern, there are plans that get near the end, and out of no where, a motion to dismiss from the trustee arrives because upon an accounting of the plan, not all the priority claims were paid.

[lulabelle]

The only priority claims we have are the attorney's fees. Our unsecured creditors would be receiving $10,000 with the proposed plan, which is just about 20%. Something just isn't right.

[HHM]

The only priority claims we have are the attorney's fees. Our unsecured creditors would be receiving $10,000 with the proposed plan, which is just about 20%. Something just isn't right.

Yeah, but you mentioned that you are also doing a cram-down, that amount is not unsecured. If it were me, I would, tactfully, press your attorney for a better explanation. His job is to try to make the payment as low as possible. Then force the trustee to object.

[lulabelle]

I agree.....or at least I always thought that was the way it works!

As for the cram-down, that amount ($15,000) is on top of the $10,000 the creditors would receive. The $10,000 is strictly to unsecured debt. We would be paying a total of $36,xxx over the life of the 13.