High trustee payment?

[SunkShip]

In my eyes giving up expenses does not equal DMI!

Unfortunately expecting debtors to give up some expenses is how trustees calculate DMI. Many higher income earners will have higher expenses, as they are accustomed to a certain lifestyle. Right or wrong the trustee can call some of those lifestyle expenses luxuries and take them out of the equation.

They do this because most filers do their best to maximize expenses and keep more of their money. Whereas the trustee is supposed to get that money for the creditors. Opposites at work, and since they are backed by legal power they can tell debtors what is allowed and what they are expected to give up in order to pay the Ch 13 payments. (Crappy, but true.)

[Guest123]

Again, we were trying to help you but...since you seem to know me so very well and that my post was about "having the last word"..... then by all means - continue on your plotted course with your experienced lawyer and your own utmost authority and knowledge on BK.

I call it like I see it. And I would say the others are more helpful then have been so if I have driven you away then good riddens!

[Guest123]

If your attorney is telling you that you don't qualify for a chapter 7 ONLY because your income is above the median, you should find another attorney. The means test has two parts. If you are under median income, you stop after the first part. If you are over median, you continue to the second part to see if your DMI is low enough to qualify for a 7. From what I've read on these boards, there are many attorneys who simply don't want to deal with an over the median Chapter 7 because it will get more scruitiny from the trustee and may require more work by the attorney.





No you haven't.

Plan payment = DMI. If your schedules do not show sufficient DMI to cover the minimum amounts that must be paid during your plan [priority debt, liquidation test amount, secured car payment that your district requires you pay through your plan, attorney fees and trustee fee], your plan will not be confirmed. So, debtors who find themselves in this situation lower their expenses to show a higher DMI because DMI is the "ultimate rule" for determining your plan payment.

Like I have said we did the mean test and didn't qualify for ch.7.......


There are people on here that have given up some expenses to pay a high payment plan because of secure/priority debts! Are you saying there is not?
In their case and MY case just paying your DMI is not what it is...plain and simple.

I don't see why we are still having this discussion when all you are doing is repeating what I said but continue to say DMI is the ultimate rule when you just posted in certain situations it is not.

In my eyes giving up expenses does not equal DMI! Maybe this is where we are not on the same page.
And agian your post as others are not on topic, which I feel mine is.
If the poster doesn't have the DMI for the proposed plan payment then whats the deal.......common sense tells me there are secured/priority debt that needs to be paid in the plan!

[Pandora]

....
Pandora I see as someone that doesn't like to be wrong and always wants the last word.
I never said it always works this way and agreed that DMI plays a part...BUT there are other factors. You would have to be an idiot to say DMI is what you will pay no matter what!

Again, we were trying to help you but...since you seem to know me so very well and that my post was about "having the last word"..... then by all means - continue on your plotted course with your experienced lawyer and your own utmost authority and knowledge on BK.

[LadyInTheRed]

each and every time I am above the median and told I don't qualify for a ch7.

If your attorney is telling you that you don't qualify for a chapter 7 ONLY because your income is above the median, you should find another attorney. The means test has two parts. If you are under median income, you stop after the first part. If you are over median, you continue to the second part to see if your DMI is low enough to qualify for a 7. From what I've read on these boards, there are many attorneys who simply don't want to deal with an over the median Chapter 7 because it will get more scruitiny from the trustee and may require more work by the attorney.

I never said it always works this way and agreed that DMI plays a part...BUT there are other factors. You would have to be an idiot to say DMI is what you will pay no matter what!

So bottom line is you say DMI is the ultimate rule to how much you will pay in a ch.13 and I submitted a way it is not

No you haven't.

Plan payment = DMI. If your schedules do not show sufficient DMI to cover the minimum amounts that must be paid during your plan [priority debt, liquidation test amount, secured car payment that your district requires you pay through your plan, attorney fees and trustee fee], your plan will not be confirmed. So, debtors who find themselves in this situation lower their expenses to show a higher DMI because DMI is the "ultimate rule" for determining your plan payment.

[Guest123]

+1 on all counts - momofthree, LadyInTheRed and NowImdown

The question I have is 2-fold; 1 part question 1 part concern. Reading Guest123's posts in regards to filing BK (7 or 13) is that maybe his/her lawyer isnt as experienced in BK as other lawyers. Being told you do not qualify for a Ch. 7 because you are over the median isnt true, means test is part of the equation. Yet being put in a 13 plan doesnt make sense either as the lawyer is including OT issued twice throughout the year (Nov and May according to Guest123). That in itself is a huge red flag as OT should not be included for a Ch. 13 payment plan - but if you get it afterwards (confirmed) then yes, the trustee can take it and use it to pay your creditors, but it shouldnt be part of your payment. Guest123 stated that he/she does not qualify for a Ch. 13 without the OT added in according to his/her lawyer - that seems very wrong and against everything 13 is based on. I'm very worried that the lawyer has stated that the payment is "only $500" yet secured vehicles (2 cars and 2 quads) total almost $1100 according to posts. If those are to be kept, then that would be a minimum start for payment plus trustee and lawyer fees if appropriate. So where is the extra $600? Am I misunderstanding something here? If I am, please let me know.

I would hate to see someone get stuck in a 13 plan that they couldnt afford and were forced into due to an inexperienced attorney. There is no reason to file now using the last 6 months that included OT pay, that in itself will cause the DMI to be higher than it really is and unless the OT pay is set aside for the entire year in order to make payments, then its bound to fail before it even begins.

If Guest123 would read others posts and replies from an objective point of view vs. an emotional one - he/she might be able to see that we're trying to help them and not gang up on them.

The flaw I see is everyone thinks there is just one rule to bankruptcy and I have found there isn't!
There is more to your payment then DMI based off your case!

My lawyer is experienced in bankruptcy more then those that are giving advice in this area.
I asked questions here that no one had answers to and now they somehow have a magic answer to.
There is nothing emotional about it just can't see what makes it so hard for a few to understand when it is written in the most simplist form that is relevant to the topic!

Back to me:
I have done the Means test over and over, by myself and with the lawyer, I would really love to hear from those that think they know more then my lawyer. Each and every time I am above the median and told I don't qualify for a ch7. The attoney we have is experienced with our work and knows what we need to do.
If you can read back you would see our ot is twice a year EVERY year and there is no way to wait till there is a 6month look back without it.

So bottom line is you say DMI is the ultimate rule to how much you will pay in a ch.13 and I submitted a way it is not, and one that is relevant to the thread. Ofcourse there are other ways for it to work as there are many different cases/situations.

Pandora I see as someone that doesn't like to be wrong and always wants the last word.
I never said it always works this way and agreed that DMI plays a part...BUT there are other factors. You would have to be an idiot to say DMI is what you will pay no matter what!

[Pandora]

+1 on all counts - momofthree, LadyInTheRed and NowImdown

The question I have is 2-fold; 1 part question 1 part concern. Reading Guest123's posts in regards to filing BK (7 or 13) is that maybe his/her lawyer isnt as experienced in BK as other lawyers. Being told you do not qualify for a Ch. 7 because you are over the median isnt true, means test is part of the equation. Yet being put in a 13 plan doesnt make sense either as the lawyer is including OT issued twice throughout the year (Nov and May according to Guest123). That in itself is a huge red flag as OT should not be included for a Ch. 13 payment plan - but if you get it afterwards (confirmed) then yes, the trustee can take it and use it to pay your creditors, but it shouldnt be part of your payment. Guest123 stated that he/she does not qualify for a Ch. 13 without the OT added in according to his/her lawyer - that seems very wrong and against everything 13 is based on. I'm very worried that the lawyer has stated that the payment is "only $500" yet secured vehicles (2 cars and 2 quads) total almost $1100 according to posts. If those are to be kept, then that would be a minimum start for payment plus trustee and lawyer fees if appropriate. So where is the extra $600? Am I misunderstanding something here? If I am, please let me know.

I would hate to see someone get stuck in a 13 plan that they couldnt afford and were forced into due to an inexperienced attorney. There is no reason to file now using the last 6 months that included OT pay, that in itself will cause the DMI to be higher than it really is and unless the OT pay is set aside for the entire year in order to make payments, then its bound to fail before it even begins.

If Guest123 would read others posts and replies from an objective point of view vs. an emotional one - he/she might be able to see that we're trying to help them and not gang up on them.

[NowImDownInIt]

I'm correct, yet I'm wrong?
Nothing I said is incorrect, you are just making it more complicated then it needs to be.
Am I wrong to say secure credit plays a part in the payment...NO!
Have I stated that DMI plays a part in the payment...YES!
Do I have some super special case no, I just have a way to pay my secured debt without having to cut my expenses.

AND if you read the first post you would have seen that they stated their DMI wouldn't cover the payment, so common
sense would let you know there is some secured debt that has to be paid or something is seriously wrong.
I think my statements are correct for this thread.

I'm going to have to side with momofthree and state that it is actually YOU that are making this more complicated that necessary.

Your payment IS your DMI. Simply put. Your situation, Guest123, is hardly the rule.

Mortgages are paid outside and inside but neither are expected to be paid in full by the end of the plan.

Secured debt is just one part of the equation in the plan base.

[LadyInTheRed]

I'm correct, yet I'm wrong?
Nothing I said is incorrect, you are just making it more complicated then it needs to be.

No I meant Secured credit. This is mostly what decides what your payment will be because you have to pay all of it back within 5years/60months. Unless you turn in a car or what ever secure credit it is.

That is just one incorrect statement you have made. Your secured credit does not MOSTLY decide your payment. It does play a role because payments on secured debt will reduce your DMI, unless that debt is paid through the plan. momofthree has already explained very well how your payment is determined.

Secured debt does not all have to be paid during the plan. The payments need to be made on the secured debt to avoid the creditor from getting relief from the automatic stay, but a debtor can still have secured debt after discharge of the Chap 13. The very common example of that is a mortgage.

momofthree,

I would not try debating with Guest123 -- it will be an uphill battle - just ask Pandora. It is quite interesting reading though!

I think momofthree's goal is not necessarily to convince Guest123, but to counter the false information posted. I decided to add my 2-cents so that somebody trying to learn about Chap 13 who reads this thread might give more weight to momofthree's explanations with a little back up from another poster.

[Guest123]

momofthree,

I would not try debating with Guest123 -- it will be an uphill battle - just ask Pandora. It is quite interesting reading though!

If I'm wrong then state how so. But when you state the same damn thing I have said just in a different way then and call me wrong is ignorant. Much like this post that has nothing to add!

[FishersMike]

momofthree,

I would not try debating with Guest123 -- it will be an uphill battle - just ask Pandora. It is quite interesting reading though!

[Guest123]

You are using your situation to make broad statements that make it seem as though secured debt is the most important part of the calculation, and that simply isn't the case. In your situation, you don't qualify for a ch.7 because you earn $20k of overtime each year, which changes your calculated income and gives you DMI. If you didn't have the overtime, you wouldn't have the dmi and you'd qualify for a ch.7. You continually say you don't make enough to fund a ch.13 because you keep discounting your yearly overtime.

The formula for calculating a plan payment is: Income minus allowable expenses equals plan payment. And yes, there are other variables that can create a minimum such as non-exempt assets, IRS debt, mortgage arrears, etc. However, you stated (exact quote) "the payment is determined by how much secured credit, lawyer fee and trustee fee you have to pay back." and I don't want anyone new to the forum to misunderstand. A filer IS required to pay their DMI into the plan for the duration regardless of the amount of secured debt. Even if you have zero secured debt, you still have to pay your DMI into the plan. For some, that means a payment of $100/mo for others it's a payment of $5000 a month.

Secured debt plays the same role that living expenses like groceries and medical expenses play. So, to that extent, it is used to calculate your dmi, and therefore help arrive at your payment.

And, yes, you're correct in that if someone is trying to keep assets, and their DMI isn't enough to cover those assets, they have to get creative with numbers (BTDT!) and make it work, but that doesn't change the formula used to calculate dmi. It's still Income minus allowable expenses equals plan payment.

I'm correct, yet I'm wrong?
Nothing I said is incorrect, you are just making it more complicated then it needs to be.
Am I wrong to say secure credit plays a part in the payment...NO!
Have I stated that DMI plays a part in the payment...YES!
Do I have some super special case no, I just have a way to pay my secured debt without having to cut my expenses.

AND if you read the first post you would have seen that they stated their DMI wouldn't cover the payment, so common
sense would let you know there is some secured debt that has to be paid or something is seriously wrong.
I think my statements are correct for this thread.

[momofthree]

Your secured debt does play a roll in it. If you don't have enough DMI to pay the secured then it is not so plain and simple. And that doesn't mean you automatically qualify for a chapter7.

Our DMI wont even pay half of the secured in the 5years and we don't qualify for a ch.7, lucky for us we have overtime twice a year wee can count on to make the ch.13 doable.

Most of these people that seem to be getting high payments that are cutting into their allowed expenses need to do so to cover the secured credit. And if you have alot of secured credit you want to keep then it does "mostly decide what your payment will be". Plain and simple!

You are using your situation to make broad statements that make it seem as though secured debt is the most important part of the calculation, and that simply isn't the case. In your situation, you don't qualify for a ch.7 because you earn $20k of overtime each year, which changes your calculated income and gives you DMI. If you didn't have the overtime, you wouldn't have the dmi and you'd qualify for a ch.7. You continually say you don't make enough to fund a ch.13 because you keep discounting your yearly overtime.

The formula for calculating a plan payment is: Income minus allowable expenses equals plan payment. And yes, there are other variables that can create a minimum such as non-exempt assets, IRS debt, mortgage arrears, etc. However, you stated (exact quote) "the payment is determined by how much secured credit, lawyer fee and trustee fee you have to pay back." and I don't want anyone new to the forum to misunderstand. A filer IS required to pay their DMI into the plan for the duration regardless of the amount of secured debt. Even if you have zero secured debt, you still have to pay your DMI into the plan. For some, that means a payment of $100/mo for others it's a payment of $5000 a month.

Secured debt plays the same role that living expenses like groceries and medical expenses play. So, to that extent, it is used to calculate your dmi, and therefore help arrive at your payment.

And, yes, you're correct in that if someone is trying to keep assets, and their DMI isn't enough to cover those assets, they have to get creative with numbers (BTDT!) and make it work, but that doesn't change the formula used to calculate dmi. It's still Income minus allowable expenses equals plan payment.

[Guest123]

I'm confused. What "mostly decides your payment" isn't your secured debt. What decides your payment is your DMI. Plain and simple. You can have zero secured debt and still have a $3000 monthly payment because that's what your dmi is. Most filers who have zero dmi file ch.7, not chapter 13, but in the cases where the filer has zero dmi and chooses a chapter 13 anyway (like us, for example), then they have to create a budget that shows dmi and make it work, but that's not common at all.

Your secured debt does play a roll in it. If you don't have enough DMI to pay the secured then it is not so plain and simple. And that doesn't mean you automatically qualify for a chapter7.

Our DMI wont even pay half of the secured in the 5years and we don't qualify for a ch.7, lucky for us we have overtime twice a year wee can count on to make the ch.13 doable.

Most of these people that seem to be getting high payments that are cutting into their allowed expenses need to do so to cover the secured credit. And if you have alot of secured credit you want to keep then it does "mostly decide what your payment will be". Plain and simple!

[ozarkmiss]

FWIW,

My first number crunching session with atty he thought we should do 100% c13 too. I let him know I had done my research and told him I prefer to try a c7 first. We crunched numbers again and it's clearly a 7. granted we haven't filed yet / had 341, but now that atty knows we want to proceed with a 7, he's very clear that it will work a0ok.

I'm with you, I think he wants the path of least resistance and to hand off some ripe fruit to the trustee whenever he can get away with it.