DMI vs Assets for one spouse filing

[boochase]

I am still confused with this issue. I am the only spouse filing, and I reside in the state of Florida. The unsecured debt is mine only. My house is not totally underwater so the second mortgage cannot be stripped--hence that is why I am the only one filing. First, I understand DMI. Currently, the DMI is $200.00per month. The amount of credit card debt is $21K. We have a total $35K in assets, held jointly and considered tenants by the entirety in FL--based on info from my attorney. He also stated that the property does not have to be titled "tenants by the entirety" in FL; that all property held by a married couple meeting 5 criteria is automatically considered "tenants by the entirety." No other assets. Now, it looks like I would be paying
$200/month for five years (60 months). What circumstance would have to exist for me to get a three-year payback period?

Now, looking at the asset side. I understand that creditors are entitled to the same amount that they would get in a ch7 filing. Since my wife is NOT filing, then it seems that the total assets in the bankruptcy estate would equal only half the value of the assets ($35K/2=$17.5K). Now dividing $17.5K over a five-year period (60 months), it seems that my payment would be $292.00/month. It appears that the "asset test" has the higher monthly payment. Obviously, a three-year payback period would be a strain. Is this the payment that I will have to abide by going forward?

Thanks for the clarification.

[OHBOY]

I don't know much about chpt 13, but I don't understand why you are basing your calculation on the tenants by the entirety exempt assets ? I would think if they are exempt,then that's it for that.

It does make sense to me though to base your repayment on the outstanding credit card debt....

[SMinGA]

You can't have your cake & eat it to.

That saying is relevant here.

There are rules to filing a ch. 13, as you pointed out the key one is about how creditors must get as much as they would in a ch. 7. So in order to keep your non-exempt assets of $17.5k, you must pay in at least $17.5k. It does not count what goes to your atty, though I am not sure if it includes what goes to the trustee. A payment of $200 won't do it for you. At this point your options are: find a way to pay more in, or give up some non-exempt assets. If you want a successful 13, those are the 2 routes open.

Under median filers have the option of a 36 month plan. All filers have the option of a 60 month plan. Why would someone choose 60 over 36? Well, if they could not afford enough to resolve their plan requirements in 36...

[SMinGA]

Ch. 13 payments have nothing to do with how much credit card debt you have.

Ch. 13 payments are about DMI, but there are some requirements in situations where people have non-exempt assets. Just as in ch. 7, you cannot discharge all of your debt and keep all your stuff/cash if you own more than you can exempt.

I don't know much about chpt 13, but I don't understand why you are basing your calculation on the tenants by the entirety exempt assets ? I would think if they are exempt,then that's it for that.

It does make sense to me though to base your repayment on the outstanding credit card debt....

[boochase]

Therefore, using my example, it looks like I will be paying $292/month for 5 years. Thanks.

[SunshineGal]

If the accounts are titled TBE they are exempt...meaning, they would not be calculated in the amount your creditors would receive. TBE can get a little but tricky, there are a ton of rules that apply. If the married couple had the option of selecting TBE and chose joint tenants with rights of survivorship, TBE is protection is lost. Also, for titled property, it must read "and" vs. "or".

[boochase]

Here is what I was told by an attorney: "Most states with entireties protection afford the protection only to real property. In Florida, unlike most other states, all types of property, including all real property, tangible personal property, and intangible personal property, may be owned by a married couple as tenants by entireties. Whether a married couple owns property as unprotected joint tenants with survivorship or as protected tenants by entireties depends on the intent of the spouses. The Florida Supreme Court has said that any real or personal property owned jointly by a hustand and wife is presumed to be owned as tenants by entireties. A creditor could rebut this presumption by showing that the property ownership does not possess all six entireties characteristics or that the husband or wife indicated an intent to own the property in some other manner."

[SunshineGal]

[B] A creditor could rebut this presumption by showing that the property ownership does not possess all six entireties characteristics or that the husband or wife indicated an intent to own the property in some other manner."

That's what I meant by TBE can get kind of tricky. Titled property with "and" will presume TBE, where "or" will presume JTWFRS.

You can research the local opinions online through the court website; there are quite a few that apply to TBE property. It's my understanding that unless both spouses owe the unsecured debt, TBE is exempt from creditors. Some of the cases I've seen where the trustee won included bank accounts opened prior to marriage, cars with "or" instead of "and" and one where the couple selected JT vs TBE on a signature card when they opened the account. Beal Bank is the main case law.

[boochase]

Another point he made that I think isn't clear: Even if the property is titled JTWRS, it will qualify for TBE if the property meets the above criteria. He said that he gets this exemption 90% of the time. He made another point--many bank/brokerage accounts do not have the option of TBE as well as other assets. This is true. So, FL law seems to provide for this dilemma. Just wanted to see if others were successful with classifying their assets this way.

[SunshineGal]

We haven't filed yet, but since only one spouse is filing and there aren't any joking unsecured creditors, I've done a lot of research regarding TBE.

If you can find the Beal Bank ruling, it will explain when JT accounts are presumed to be held as TBE. As I understand, it all comes down to the signature card, if TBE was available, and JT was selected, the trustee is usually successful. However, there is a presumption that property held by husband and wife is owned as TBE and it is up to the trustee to prove otherwise.

By the way, we saw three attorneys, one told us about TBE, the next said it only applies to real property and the 3rd quoted NY case law so we got out of there quick, lol.

I should note this applies to Florida law.

[OHBOY]

Quote 'SMinGA': ..There are rules to filing a ch. 13, as you pointed out the key one is about how creditors must get as much as they would in a ch. 7. So in order to keep your non-exempt assets of $17.5k, you must pay in at least $17.5k."


Please note that original poster stated that the assets ARE EXEMPT BY TBE...

[momofthree]

Quote 'SMinGA': ..There are rules to filing a ch. 13, as you pointed out the key one is about how creditors must get as much as they would in a ch. 7. So in order to keep your non-exempt assets of $17.5k, you must pay in at least $17.5k."


Please note that original poster stated that the assets ARE EXEMPT BY TBE...

I believe a large part of his asset total is cash though, and you can be sure the trustee will try to fight for it to be considered non-exempt....

[OHBOY]

Quote by 'momofthree': "I believe a large part of his asset total is cash though, and you can be sure the trustee will try to fight for it to be considered non-exempt...."


I would not doubt it...
but, I merely wanted to point out that original poster considered his 35K assets exempt by TBE. He did not (the way I read it...) consider them 'non exempt', and he based his calculation thereafter on splitting those assets in half and basing his repayment on his assets....
Now, THAT'S where I don't follow... seems to me that any repayment would be based on his income (taking his spouses income into consideration) & what his disposable monthly income is, and thereafter what his debt is. Seems quite clear cut to me, assuming that the 35K in assets are considered to be held in TBE.

Again, I am not very informed about a chpt. 13...b-u-t logic tells me that's how it would work.....?

[catleg]

Wouldn't any real estate be covered by Florida's homestead? Or are we talking about 2nd homes/rental properties? Why are you filing the 13 in the first place?
Tax debt? Mortgage arrears? Above median?

[SunshineGal]

Oops... "joking" should be joint in the post above, sometimes I just love spell check, lol.