Chapter 13Chapter 13

• Consolidate DebtConsolidate Debt

• Pay Smaller Monthly PaymentsPay Smaller Monthly Payments

Priority DebtPriority Debt

• Taxes and Domestic Support Taxes and Domestic Support ObligationsObligations

Repaid at 100%Repaid at 100%

Priority DebtPriority Debt

• Taxes and Domestic Support Taxes and Domestic Support ObligationsObligations

Repaid at 100%Repaid at 100%

• Student LoansStudent Loans

Paid at a %, but still owedPaid at a %, but still owed

Priority DebtPriority Debt

• Taxes and Domestic Support ObligationsTaxes and Domestic Support ObligationsRepaid at 100%Repaid at 100%

• Student LoansStudent LoansPaid at a %, but still owedPaid at a %, but still owed

• Government Fines, Bad Checks, Government Fines, Bad Checks, Retirement Loans, Ongoing SupportRetirement Loans, Ongoing SupportPaid direct at 100%Paid direct at 100%

Priority DebtPriority Debt

• Taxes and Domestic Support ObligationsTaxes and Domestic Support ObligationsRepaid at 100%Repaid at 100%

• Student LoansStudent LoansPaid at a %, but still owedPaid at a %, but still owed

• Government Fines, Bad Checks, Retirement Loans, Government Fines, Bad Checks, Retirement Loans, Ongoing SupportOngoing SupportPaid direct at 100%Paid direct at 100%

• All OthersAll OthersTreated as Unsecured DebtTreated as Unsecured Debt

SecuredSecured

• Regular MortgageRegular Mortgage

Paid direct at 100%Paid direct at 100%

SecuredSecured

• Regular MortgageRegular Mortgage

Paid direct at 100%Paid direct at 100%

• Mortgage ArrearagesMortgage Arrearages

Paid at 100% without interestPaid at 100% without interest

SecuredSecured

• Regular MortgageRegular Mortgage

Paid direct at 100%Paid direct at 100%

• Mortgage ArrearagesMortgage Arrearages

Paid at 100% without interestPaid at 100% without interest

• 910 Property910 Property

Paid at 100% plus interestPaid at 100% plus interest

SecuredSecured

• Regular MortgageRegular MortgagePaid direct at 100%Paid direct at 100%

• Mortgage ArrearagesMortgage ArrearagesPaid at 100% without interestPaid at 100% without interest

• 910 Property910 PropertyPaid at 100% plus interestPaid at 100% plus interest

• All Other PropertyAll Other PropertyPaid at 100% of value plus interest on valuePaid at 100% of value plus interest on value

More than 910 days prior to More than 910 days prior to filingfiling

If:If: Car DebtCar Debt 18,00018,000Car ValueCar Value 12,00012,000InterestInterest 21%21%

Plan paysPlan pays 100% of100% of 12,00012,000PlusPlus ~9% interest~9% interest

Balance ofBalance of 6,000 as 6,000 as unsecured debtunsecured debt

Cross-Collateralized DebtsCross-Collateralized Debts

• Credit Union DebtsCredit Union Debts– Unsecured debts are actually securedUnsecured debts are actually secured– Chapter 13 – May Selectively ReaffirmChapter 13 – May Selectively Reaffirm

Executory ContractsExecutory Contracts

• All Executory ContractsAll Executory Contracts

Paid direct at 100%Paid direct at 100%

UnsecuredUnsecured

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

Property Value Property Value - - Debt Against the PropertyDebt Against the Property == EquityEquity

EquityEquity-- Costs of SaleCosts of Sale = Net Value of Property= Net Value of Property

Net Value of Property Net Value of Property -- Exemptions Exemptions = Value Available for Creditors= Value Available for Creditors

Liquidation analysisLiquidation analysis

Excess IncomeExcess Income

Total Monthly Income Total Monthly Income

–– Reasonable ExpensesReasonable Expenses

= Excess Income= Excess Income

Calculating Excess IncomeCalculating Excess Income

The Last 6 Months Income/6 The Last 6 Months Income/6

–– IRS Approved ExpensesIRS Approved Expenses

= Excess Income= Excess Income

Amount returned to Amount returned to UnsecuredUnsecuredSchedule I & J excess income x plan length Schedule I & J excess income x plan length

== XX

Form 22 excess income x plan length Form 22 excess income x plan length

== YY

Liquidation analysisLiquidation analysis

== ZZ

Amount returned to Amount returned to UnsecuredUnsecuredSchedule I & J excess income Schedule I & J excess income x plan length x plan length == XX

Form 22 excess income Form 22 excess income x plan length x plan length == YY

Liquidation analysisLiquidation analysis == ZZ

The Greater of The Greater of X, Y, or ZX, Y, or Z = The % Paid to Unsecured = The % Paid to Unsecured CreditorsCreditors

Total Unsecured DebtTotal Unsecured Debt

Co-Signed DebtCo-Signed Debt

• May be paid at May be paid at 100%100% in the Plan in the Plan

Court Costs, Attorney Fees, Court Costs, Attorney Fees, and Trustee Feesand Trustee Fees

• Attorney FeesAttorney Fees $2750.00$2750.00

• CostsCosts $446.00$446.00

• Trustee’s FeesTrustee’s Fees 10% of Plan 10% of Plan PaymentsPayments

Calculating a Plan PaymentCalculating a Plan Payment

Priority Debt x 100% Priority Debt x 100% == AAStudent Loan Debt x 10%Student Loan Debt x 10% == BBSecured Debt x 100%Secured Debt x 100% == CCSecured Debt x 9%Secured Debt x 9% == DDUnsecured Debt x 10%Unsecured Debt x 10% == EEBalance of Attorney FeesBalance of Attorney Fees == FFA + B + C + D + E + F x 11%A + B + C + D + E + F x 11% == GGG x 10 divided by 57G x 10 divided by 57 == Monthly Monthly

PaymentPayment

AssetsAssets

• Keep everything except Tax RefundsKeep everything except Tax Refunds

Total Tax RefundTotal Tax Refund

- $1,000.00 - $1,000.00

= Amount paid to Court= Amount paid to Court

Bank AccountsBank Accounts

• Open a New Account Open a New Account BeforeBefore you File you File

Recap of Chapter 13Recap of Chapter 13

• Priority DebtPriority Debt Taxes paid at 100%Taxes paid at 100%Student Loans paid at %Student Loans paid at %Fines and Support paid direct at 100%Fines and Support paid direct at 100%All Other paid as unsecuredAll Other paid as unsecured

• Secured DebtSecured Debt Mortgage paid direct at 100%Mortgage paid direct at 100%Mortgage arrearages paid at 100% without Mortgage arrearages paid at 100% without

interestinterest910 Property paid at 100% plus interest910 Property paid at 100% plus interestAll Other paid at 100% of value plus interest on All Other paid at 100% of value plus interest on

valuevalue

• Executory ContractsExecutory Contracts Paid direct at 100%Paid direct at 100%

• UnsecuredUnsecured Paid at %Paid at %

• AssetsAssets Keep all but excess refundsKeep all but excess refunds