Chapter 13 plan monthly payment

[JBin13]

What is the name of your state? Michigan

I filed for Chapter 13 a few weeks ago. I have around $60k in unsecured debt. I own a house, and have two vehicles (one paid off, $800 balance on the other). I don’t have any priority unsecured claims.

At the 341 hearing, I requested that I directly pay my mortgage and my vehicle.

I filled out the disposable income worksheet (B22C), but the allowable exemptions exceed my income.

My attorney says that I will have to still submit a payment plan, but he didn’t tell me if it should cover three or five years.

How much should I propose as monthly payment, and for what duration? Is there a bankruptcy statute that requires a certain percentage of debt owed that should be included in the plan?

My attorney is being very vague, and, up to this point, has filed everything at the 11th hour, which limits my questions and discussion.

Thanks.

 

[Ladynred]

Is your income below your state's median income level ?? If so, why file a Ch 13 instead of a Ch 7 ?

How long a period depends on your disposable income. Not ALL creditors are going to file a proof of claim, so even if you list all creditors worth 60K, you may wind up only paying a fraction of that. The base time is 3 years. Your lawyer should be helping you with this that's what you're paying for !

 

[JBin13]

I earn $10k above the median in my state. Therefore, I have been steering into a 13.

Based on having no disposable income after using the allowed exemptions, I can propose a plan for 3 years? My attorney has been saying the payment duration should be five years, because my proposed plan would be less than 25% of the unsecured debt.

 

[Ladynred]

Then make your plan for 5 years as your lawyer told you. The fact is, not ALL of your creditors will file a proof of claim so even if you make your plan for 5 years, you may be able to pay it all off in 3, but you're stuck for a MINIMUM of 3 years. You make up your plan now, creditors file their claims, and then the final plan gets confirmed.

 

[GaAtty]

It does not seem like your attorney is explaining things well, or else you are not listening. There are two reasons you are in a Ch. 13 not a 7--your car and your house. You could not keep either in a Ch. 7 unless you had minimal or no equity in your house. However, your attorney should be helping you with your payment plan, which can be either 36 or 60 months, depending on how long it takes you to pay off your debt. How long it takes you depends on how large a payment you can make. How large your payment is depends on your attorney's fees, your trustee's fees, and the percent of unsecured debt that you are paying back. These are things your attorney knows, and you would not be expected to know. If he said budget, he probably meant how much for your electric, mortgage, food, insurance, etc. per month. We have our clients bring that information with them to our office, and we calculate the payments at that time, and also determine if they need to be in a 36 or 60 month plan. However, sometimes the trustee determines that and it is out of the hands of the attorney or the client. It just depends on your own situation. It is possible to change bankruptcy attorneys, even if you have already filed, and maybe you should shop around and do that. Find someone with more time to explain.

 

[JBin13]

In summary, my allowed exemptions exceeds my income, per the disposal income worksheet. I bought my house 13 months ago, and don't have much equity in it. I owe just under $800 on the second car. Without the ERISA-qualified 401(k) that I have, I have around $5000 in claimed exemptions. What would be a good formula to calculate a proposed payment plan?