BK13 36 to 60 months?

[dosumi]

What is the name of your state? CA

How is the length of the payment plan determined in a BK13?

I’ve read a lot on this board that people are paying for 60 months.
Our lawyer says ours will only be 36 months.

Our total payments will be $300.00 per month.
And both the Trustee and the Lawyer take a cut from that.
If this is approved as it is, the creditors will not receive very much, as I understand it our back taxes will be paid off first, then the creditors.
That leaves 18 creditors to split up what’s left.

Not that we could do anything if the 36 is changed to 60 because we have to file no matter what.
With the penalties, late fees and 30% interest over the last 8 months our debt has grown by about 40%. Making the original $115,000 over $160,000
The one I like the best is that they reduce you credit limit to what you owe and then with the interest and late fee you are now over your limit, so they charge a over limit fee.

Thanks

 

[Ladynred]

Yep, that's one of their favorite 'scams' to hike up fees, interest and their profits. They literally make it IMPOSSIBLE for you to ever catch up - and that really is their ultimate goal.

How is the length of the payment plan determined in a BK13?

Well, the big factor is your disposable income. You and your lawyer create a plan based on your disposable income. The Trustee and/or judge can object to some of your expenses and the plan would have to be modified if you can't work it out. The plan MUST be at LEAST 3 years. If you have secured debts and priority debts, then those get paid first (along with administrative and laywer's fees), unsecured gets what's left over. Your plan must then be confirmed by the court.

What is required for court approval of the chapter 13 plan?

The court may confirm a chapter 13 plan if: (1) the plan complies with the legal requirements of chapter 13, (2) all required fees, charges, and deposits have been paid, (3) all priority claims will be paid in full under the plan, (4) the plan was proposed in good faith, (5) each unsecured creditor will receive under the plan at least as much as it would have received had the debtor filed under chapter 7, (6) it appears that the debtor will be able to make the required payments and comply with the plan, and (7) each secured creditor has been dealt with in the manner described in the answer to Question 16 above.

#5 can mean usecured creditors get nothing since in a CH 7, most would get nothing anyway. Payments to unsecured can be as little as 1 or 2%, it depends on how much your total debt is and what classification those debts fall under.