If you're under median when you file but get another job...??

[Pandora]

Okay, searched but guess I'm not cluing the words right.

So - back in march when we filed 13, we were (and still are) under median, which technically should be a 36 month plan (all paperwork states 36 month), but given our assets that werent exempt (7 liquidiation etc...) and we didnt have the $ to fund a 36 month, opting to keep the assets (vehicles owned outright) - we were allowed the 60 month option.

Now - hubby was offered (hasnt accepted yet due to some small issues to be worked out) a new job making about 18K more a year, which will put us over median if he does. Question (and I think I know the answer but I'm not sure) doesnt it count as to what your status was on the day of filing vs. what it could become in the future? From what I've read, I believe thats true - so if he accepts and the pay goes up, and we adjust our schedules accordingly - yet allow for an extra $ amount of DMI - we can technically fund the 36 month plan that BK law states we're eligible for... right?



Please tell me thats correct - that everything counts from the day you filed - not 6 months later and can be changed due to not being confirmed (or even if confirmed).

That would be sweet to knock 2 years off the plan because we can fully fund a 36 month should he accept the job.

Thanks -

ETA: also, please ease my mind on one other thing: even though not confirmed, the actual 60 month timeframe started from payment 1 - not from confirmation... right? Or is that district specific? We're 6 months into payments...

[catleg]

Payment count starts from payment 1 due within 30 days of filing date.

I believe you are correct, in that, you're below median at filing date, therefore allowed a 36 month plan, but your projected income is needed to actually accomplish that. Sounds to me like it should work. Also your plan should depend completely on sched I & J amounts, not the means test IRS limits.

[NoTomatoCan]

Just a note on the confirmation start date... Those of us fortunate enough to live in the booming state of Michigan, specifically Eastern District, have their 60 months start upon confirmation.

We are the only ones that I know of that are so "lucky".

[Pandora]

Thanks Catleg and NoTomatoCan - much appreciated.

I'm hoping this is how it all works

[catleg]

Just a note on the confirmation start date... Those of us fortunate enough to live in the booming state of Michigan, specifically Eastern District, have their 60 months start upon confirmation.

We are the only ones that I know of that are so "lucky".

So are you required to make pre-confirmation payments too? Wow that really sucks.

[sassiebaz]

Won't your payback amount adjust with more oincome though?

[LadyInTheRed]

Won't your payback amount adjust with more oincome though?

Yes. That's what should allow Pandora and her husband to reduce the length of the plan to 36 months. They proposed a 60 month plan because they don't have enough DMI to pay for the non-exempt assets they are keeping in 36 months. If hubby gets the new job, they will have enough DMI to pay for the assets in 36 months.

Pandora, since your plan is not yet confirmed, Bankruptcy Code Section 1323 allows modification for any reason as long as the plan still complies with Section 1322 which, among other things, sets the length of a plan to 36 months for an under the median filer unless the court, for good cause, allows a longer plan. If you can pay for your nonexempt assets within the 36 months, I don't think the court has good cause to allow a longer plan.

In case your plan gets confirmed before you can modify it,
Section 1329(a)(2) allows the modification of a confirmed plan to increase or reduce the time for payments to creditors.

I bet modifying the plan will result in unsecured creditors getting more than they would have. Everybody should be happy with a modification.

[Pandora]

Won't your payback amount adjust with more oincome though?

That was my concern also..., however I dont *think* so - because we're under median when we filed, and under the IRS standards as well in many areas on our schedules, so we will adjust those accordingly, and it will leave a few hundred extra in DMI in addition to what we are paying now. My hopes is that because we were/are under median when we filed (as according to all I've read thats what matters) and qualified for 36 months - we can fund the plan at $1K a month for 36 months vs. $600 a month for 60 months.

Going to call our lawyer tomorrow just to make sure this is correct as I'd hate have it something different, and increase our payback amount.

ETA: Guess my wording isnt right - YES (to your question) it will, however it allows us to readjust the terms... Sorry, not quite all here today LadyinTheRed explained it better LOL

[Pandora]

Yes. That's what should allow Pandora and her husband to reduce the length of the plan to 36 months. They proposed a 60 month plan because they don't have enough DMI to pay for the non-exempt assets they are keeping in 36 months. If hubby gets the new job, they will have enough DMI to pay for the assets in 36 months.

Pandora, since your plan is not yet confirmed, Bankruptcy Code Section 1323 allows modification for any reason as long as the plan still complies with Section 1322 which, among other things, sets the length of a plan to 36 months for an under the median filer unless the court, for good cause, allows a longer plan. If you can pay for your nonexempt assets within the 36 months, I don't think the court has good cause to allow a longer plan.

In case your plan gets confirmed before you can modify it,
Section 1329(a)(2) allows the modification of a confirmed plan to increase or reduce the time for payments to creditors.

I bet modifying the plan will result in unsecured creditors getting more than they would have. Everybody should be happy with a modification.

Thanks LadyinTheRed - very helpful

[LadyInTheRed]

That was my concern also..., however I dont *think* so - because we're under median when we filed, and under the IRS standards as well in many areas on our schedules, so we will adjust those accordingly, and it will leave a few hundred extra in DMI in addition to what we are paying now. My hopes is that because we were/are under median when we filed (as according to all I've read thats what matters) and qualified for 36 months - we can fund the plan at $1K a month for 36 months vs. $600 a month for 60 months.

Going to call our lawyer tomorrow just to make sure this is correct as I'd hate have it something different, and increase our payback amount.

I misunderstood sassiebaz' questions to ask if it would increase monthly payments. So, it sounds like you are going to be able to work out an easier budget with the increase instead of giving more to unsecured creditors. That's great! I'd think the shorter plan is preferable even if you do end up having to pay a little more to creditors.

[Pandora]

I misunderstood sassiebaz' questions to ask if it would increase monthly payments. So, it sounds like you are going to be able to work out an easier budget with the increase instead of giving more to unsecured creditors. That's great! I'd think the shorter plan is preferable even if you do end up having to pay a little more to creditors.

I thought I misunderstood sassiebaz's question .. and you took it another way - so thats why I modified my response Okay - so now I'm not sure what the question entailed and presumed to ask? LOL

I guess either way I'm in the good? Doesnt matter confirmed or not...right? I should be able to modify and get the 36 month....??

[LadyInTheRed]

I thought I misunderstood sassiebaz's question .. and you took it another way - so thats why I modified my response Okay - so now I'm not sure what the question entailed and presumed to ask? LOL

Well, if we say that monthly plan payments will increase but the total paid over the length of the plan may or may not increase depending on the adjustments you make to your expenses, we've answered the question either way.

I guess either way I'm in the good? Doesnt matter confirmed or not...right? I should be able to modify and get the 36 month....??

I think so. But, that's based on my reading the Code, not on any actual experience.

[sassiebaz]

Yes, my question was whether or not the monthly payments would be increased beacuse of a salary increase. I was not informed of all of these things when we filed. When we went to our 341 meeting, I really think our attorney believed we were filing a ch7. I got a good job about a year later and they encouraged me to quit/dismiss as I really didnt want to hand over $1800 a month as opposed to the $72 we were already sending in.

[Pandora]

Yes, my question was whether or not the monthly payments would be increased beacuse of a salary increase. I was not informed of all of these things when we filed. When we went to our 341 meeting, I really think our attorney believed we were filing a ch7. I got a good job about a year later and they encouraged me to quit/dismiss as I really didnt want to hand over $1800 a month as opposed to the $72 we were already sending in.

How could your lawyer not know what Chapter you were filing, especially if you had a payback amount? Ouch, from $72 to $1800 - holy crap! I'd seriously have to look over the schedules and all categories to ensure I was getting the best deal before I forked over that amount too. Yikes!

Well - here's hoping that after adjusting our schedules up as needed, that we will have just enough to push us into a fully funded 36 month plan vs the 60, and if it comes out to a wee bit more, then I'm okay with that too, so long as we get to keep the 36 month rule timeframe.