Chapter 13 payment schedule

[ltandcrew]

What is the name of your state? Utah
Anyone know what the percentage of payback in a chapter 13 is? I was advised that I would payback 40%. I have not filed as of yet.

 

[dosumi]

No %

I don't believe there is a set schedule or percentage, just a time period from 3 to 5 years. The payments would be based on what you can afford to pay after expenses.
I've read a lot here that says if you file chapter 7 and have over $100.00 in disposable income that will force you to file BK13, so I would guess that $100.00 is the minimum?

We had a few issues with our BK7 and have to go for a BK13.
We haven't finalized it yet, but we told the Lawyer that we couldn't afford to pay more than $300.00 a month and she said that would be fine.
That will be not even close to 40%.
After the Lawyer talks her cut and the trustees take their cut the debtors won't be left with much. If this is approved it won't even be 8%.

If I could pay 40%, I would call them and try to make deals and not file BK.
Most of the Card companies have called or written letters offering to reduce our debt from 40 to 60%. This started after not paying our payments for about 6 months.
I would not use a service, I’ve heard to many bad things about them,. unless you don’t think you can negotiate the deals yourself.
There is more to debt reductions than I wrote here; if you search this board you can find a lot of information.
There are possible tax issues and get it in writing don’t accept any deals over the phone (verbally).

Hope this helps, If I’m wrong I’m sure someone will correct me.

 

[bombbat]

deal at 60%

If you make a deal on a debt that is lets say 10,000, and the deal is you pay 60% or 6,000. Then the IRS can come after you for taxes on the difference, if the difference is > $599. NO DEAL HUH !

 

[Ladynred]

If the 'forgiven' portion of the debt is greater than $599, then a 1099-C may be issued - but not by any collection agency. Further, if you can prove to the IRS that you were insolvent when you made the settlement, then you do not have to claim the 'forgiven' amount as income on your taxes.

If you're in CH 13, there are no 1099's on debts discharged in bankruptcy.

 

[dosumi]

I think the question was what is the percentage you have to payback in a chapter 13. There is no set percentage, correct.

My answer suggests that if you can afford to pay or they have you paying back 40% in a chapter 13 you may want to think about settling the debt outside of the bankruptcy court. As an option to look into.

Yes there may be tax consequences. But if you are insolvent then the tax liability would be void. See IRS web site for more info. And yes you would need to find out first.

On the plus side you wouldn't be locked into chapter 13 payments for 3 to 5 years.

I've read that a lot of people who file 13 don't complete the process; it is hard to stay on such a strict budget for 3 to 5 years. And if you stop paying you are back to square one with the creditors coming after you.

I for one am not looking forward to it. But I'm out of options.