New debt with 100% plan

[Jamie777]

Hi all,

Wondering if anyone has any insight on this as I await reply from our attorney. We have a ch13 100% repayment plan. Basically did it for debt consolidation, paying everything back, and we have disposable income remaining. We’re trying to figure out if the same rules apply to us as far as taking out new debt while in active in bankruptcy, as opposed to a plan under 100%. We’re wanting to take a loan for a purchase that is not an emergency, and definitely not a “needed” purchase like a car or home loan might be. Does anyone have any experience in this as far as needing approval, and if something like that would even be approved? Again, I know it wouldn’t be approved for many cases, but specifically wondering if being on 100% plan makes a difference here.
Thanks!

[justbroke]

Generally speaking, there are no rules when you're in a true 100% repayment plan. A 100% plan debtor is not restricted in any way. They are allowed to incur debt, so long as they pay back 100%, and stay in plan and on time.

You can confirm with your attorney, but your Chapter 13 Plan of Reorganization (your "confirmed" plan) likely lacks the language prohibited incurring debt. If it does have such a restrictive paragraph, definitely consult your attorney (it shouldn't be there in a true 100% plan).

I also don't see any issues even if you were to "seek" permission. There's nothing to which a Trustee could object to in a 100% plan so I don't see why there would be any issue at all. A debtor in a 100% plan is not required to commit 100% DMI. They are only required to pay 100% of the allowed unsecured claims.

[Carmella]

My husband and I are allowed up to $500 credit per our BK paperwork. There is provision to get a car loan, but it has a lot of red tape and has to get approved through the trustee or court (I forget which). We are in 100% Chapter 13. Read over your paperwork and talk to the attorney.

[Jamie777]

Hmm. Is that on the Petition or the Official Form Plan? Maybe they’re called something else in different states lol. These are the two docs I have and I didn’t see anything related to new debt. Will check again

[justbroke]

It would only be located in your confirmed plan (or your Order Confirming Chapter 13 Plan).

[Carmella]

Hmm. Is that on the Petition or the Official Form Plan? Maybe they’re called something else in different states lol. These are the two docs I have and I didn’t see anything related to new debt. Will check again

It is in our official paperwork, but I don't remember the title of the document.

[justbroke]

The Order Confirming Chapter 13 Plan is the official document. A debtor does file a Chapter 13 Plan (a/k/a a Plan), but the Order Confirming Chapter 13 Plan is the officially accepted version. It may refer back to the Chapter 13 Plan as submitted, or entirely regurgitate everything from that plan, along with any standard things.

You may be referring to a Model Plan. That's just a type of form that everyone must use when filing a Chapter 13 Plan in a specific district. It keeps from having to nitpick every single "unique" plan since it follows a model form for that specific District.

Even if you filed a Model Plan, you must still look at the Order Confirming Chapter 13 Plan.