Why Do People Have To Pay Back So Much? 100%

[moe]

Some people here are paying back at 100%.

What would make you have to pay back so much? Is it just high income?

Now our income is higher.

If we have to pay back 100% what would we possibly do?

I'm really starting to get afraid because only one of us can declare and has to declare Chapter 13. So half the debt is in the hands of the other one.

Now it looks like debt negotiation's not going to work either because we can't risk having any legal judgments against us due to our work.

Anyway, the question I really want to understand is: Why are some people not getting relief from declaring Chapter 13?

and (2) Do you find out what your repayment plan will be before you file? Or does it suddenly get dumped on you by a judge and then you are stuck as bankrupt but someone who is basically still unable to pay bills?

[tightgrip]

From what I was told yesterday by my paralegal they submit something to your creditors and they ask for a certain portion of payback like say 50 or 70 percent. That is how I understood it! The payment plan is submitted by your attorney when you file so you will know your payment then but it could go up or down after that depending on your trustee and what he thinks you can pay back.

[SMinGA]

It depends on a few things:

1. Net Disposable Income: Net income less actual and/or allowable expenses

2. There may be a minimum amount you need to pay to unsecured creditors to keep non-exempt assets. Such as if you have property you want to keep, but have exhausted all your exemptions, then the unsecured creditors combined need to get at least as much as the non exempt value.

3. Which unsecured creditors file claims. Only the ones who file a claim can be paid anything.

I imagine there are more plans that pay very little to unsecured than the ones that pay 100%. But 100% could still have advantages. No more interest & penalties, no garnishment activity, no collection calls.

[debtinohio]

#1 & 2 from SM above are the most common. Also, they may just not have that much unsecured debt while others are well over 6 figures on unsecured.

[newbie2]

From what I was told yesterday by my paralegal they submit something to your creditors and they ask for a certain portion of payback like say 50 or 70 percent. That is how I understood it! The payment plan is submitted by your attorney when you file so you will know your payment then but it could go up or down after that depending on your trustee and what he thinks you can pay back.

That's not true. Heck, if all of our attorneys asked our creditors what they wanted for a payback they would all say 100

[debtinohio]

Yeah, they certainly wouldn't want the 12% I'm offerin...

[SMinGA]

Mine will be under 5% to unsecured. Would be less except my TT will take tax refunds, and I can't avoid having a tax refund. (Child tax credits...)

[debtinohio]

Mine will be under 5% to unsecured. Would be less except my TT will take tax refunds, and I can't avoid having a tax refund. (Child tax credits...)

Mines gone from 10% to 28% back to 12% once I got a plan the Trustee no longer objected too. It may go to 16% once I lose the RV fight :-)

OP - take a look at the "% Payback (it doesn't matter) " sticky on this forum.

[HHM]

100% plans are about control. There is actually some benefit even in 100% chapter 13's
1. No interest accrues on the debt
2. You will out of debt in 5 years.

Most people who do 100% plans could not be out of debt in 5 years or less on their own. Commonly, 100% plans arise when a family has a short term set back, high earner loses job, debt gets out of control during that time (late payments, jacked up interest rates), but then gets another job still making good money. Chapter 13 is how that family retakes control of their debt.

[Jengo]

To my understanding and please correct me if I'm wrong, secured debt is paid back 100 percent during plan. Whatever is left over is distributed equally to unsecured creditors. If plan and amount is only enough to cover living expenses and secured debt 100 percent, then unsecured creditors get nothing or at least the ones that file claims

I'm curious though and if anyone can answer. What is the likelihood or amount owed cut off that a creditor would or would not file a claim to get paid.? Say for instance, the creditor is only owed 2k and in current plan may only recieve 5 percent of what is owed,etc., are they unlikely to file a claim. I'm assuming given the economic crisis and so many companies hurting and families hurting as well, that it would be worth their filing a claim if it exceeds any fees to file the claim or enough over the filing fee to at least get some money back. Are the creditors notified in advance upon their filing and the current plan the percentage that they may recieve and then the creditor determines then as to whether or not to file for the amount owed?

[NoTomatoCan]

Jengo - This seems to be all over the map. Some folks have had claims filed for a few hundred dollars while others have had CCs not file claims for $20k+.

[SMinGA]

I don't know how much info is provided to the creditors, though any of them can pull up your case on Pacer to see the full details. But things change, in terms of payment amount, so the initial plan proposal may not be the same as the payment amount that gets confirmed.

From my own (limited) experience, the smaller companies are less likely to file a claim. So far at least, that is not an absolute. I have a couple of medical bills (local) that have not filed claims, and a credit union card that has not. Pretty much the rest have, large and small balances.

[debtinohio]

Had $100 claimed by Cap 1 but not $45K by Citi or $25K card & my $32K truck to a local credit union, but they still have a month & a half to file claims so I'm sure most will come on in.