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Chapter 13 Consolidate Debt Consolidate Debt Pay Smaller Monthly Payments Pay Smaller Monthly Payments.

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Presentation on theme: "Chapter 13 Consolidate Debt Consolidate Debt Pay Smaller Monthly Payments Pay Smaller Monthly Payments."— Presentation transcript:

1 Chapter 13 Consolidate Debt Consolidate Debt Pay Smaller Monthly Payments Pay Smaller Monthly Payments

2 Priority Debt Taxes and Domestic Support Obligations Taxes and Domestic Support Obligations Repaid at 100%

3 Priority Debt Taxes and Domestic Support Obligations Taxes and Domestic Support Obligations Repaid at 100% Student Loans Student Loans Paid at a %, but still owed

4 Priority Debt Taxes and Domestic Support Obligations Taxes and Domestic Support Obligations Repaid at 100% Student Loans Student Loans Paid at a %, but still owed Government Fines, Bad Checks, Retirement Loans, Ongoing Support Government Fines, Bad Checks, Retirement Loans, Ongoing Support Paid direct at 100%

5 Priority Debt Taxes and Domestic Support Obligations Taxes and Domestic Support Obligations Repaid at 100% Student Loans Student Loans Paid at a %, but still owed Government Fines, Bad Checks, Retirement Loans, Ongoing Support Government Fines, Bad Checks, Retirement Loans, Ongoing Support Paid direct at 100% All Others All Others Treated as Unsecured Debt

6 Secured Regular Mortgage Regular Mortgage Paid direct at 100%

7 Secured Regular Mortgage Regular Mortgage Paid direct at 100% Mortgage Arrearages Mortgage Arrearages Paid at 100% without interest

8 Secured Regular Mortgage Regular Mortgage Paid direct at 100% Mortgage Arrearages Mortgage Arrearages Paid at 100% without interest 910 Property 910 Property Paid at 100% plus interest

9 Secured Regular Mortgage Regular Mortgage Paid direct at 100% Mortgage Arrearages Mortgage Arrearages Paid at 100% without interest 910 Property 910 Property Paid at 100% plus interest All Other Property All Other Property Paid at 100% of value plus interest on value

10 More than 910 days prior to filing If:Car Debt18,000 Car Value12,000 Interest21% Plan pays100% of12,000 Plus~9% interest Balance of6,000 as unsecured debt

11 Cross-Collateralized Debts Credit Union Debts Credit Union Debts –Unsecured debts are actually secured –Chapter 13 – May Selectively Reaffirm

12 Executory Contracts All Executory Contracts All Executory Contracts Paid direct at 100%

13 Unsecured Percentage Paid to Unsecured = The Larger of (liquidation analysis, Schedule I & J excess income, or Form 22 excess income) divided by the Total Unsecured Debt Percentage Paid to Unsecured = The Larger of (liquidation analysis, Schedule I & J excess income, or Form 22 excess income) divided by the Total Unsecured Debt

14 Property Value - Debt Against the Property = Equity Equity - Costs of Sale = Net Value of Property Net Value of Property - Exemptions = Value Available for Creditors Liquidation analysis

15 Excess Income Total Monthly Income – Reasonable Expenses = Excess Income

16 Calculating Excess Income The Last 6 Months Income/6 – IRS Approved Expenses = Excess Income

17 Amount returned to Unsecured Schedule I & J excess income x plan length =X Form 22 excess income x plan length =Y Liquidation analysis =Z

18 Amount returned to Unsecured Schedule I & J excess income x plan length =X Form 22 excess income x plan length =Y Liquidation analysis=Z The Greater of X, Y, or Z = The % Paid to Unsecured Creditors Total Unsecured Debt

19 Co-Signed Debt May be paid at 100% in the Plan May be paid at 100% in the Plan

20 Court Costs, Attorney Fees, and Trustee Fees Attorney Fees$ Attorney Fees$ Costs$ Costs$ Trustee’s Fees10% of Plan Payments Trustee’s Fees10% of Plan Payments

21 Calculating a Plan Payment Priority Debt x 100% =A Student Loan Debt x 10%=B Secured Debt x 100%=C Secured Debt x 9%=D Unsecured Debt x 10%=E Balance of Attorney Fees=F A + B + C + D + E + F x 11%=G G x 10 divided by 57=Monthly Payment

22 Assets Keep everything except Tax Refunds Keep everything except Tax Refunds Total Tax Refund - $1, = Amount paid to Court

23 Bank Accounts Open a New Account Before you File Open a New Account Before you File

24 Recap of Chapter 13 Priority Debt Taxes paid at 100% Priority Debt Taxes paid at 100% Student Loans paid at % Fines and Support paid direct at 100% All Other paid as unsecured Secured DebtMortgage paid direct at 100% Secured DebtMortgage paid direct at 100% Mortgage arrearages paid at 100% without interest 910 Property paid at 100% plus interest All Other paid at 100% of value plus interest on value Executory ContractsPaid direct at 100% Executory ContractsPaid direct at 100% UnsecuredPaid at % UnsecuredPaid at % AssetsKeep all but excess refunds AssetsKeep all but excess refunds


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