Q: How does CH 13 repayment plan work? Assuming I am $100K behind on my mortgage and a 5 year repayment plan.
Would I pay my regular monthly mortgage payment back plus $100K / 60 months? Or does the trustee review my income and expense figures and come up with an amount he/she deems appropriate? I’m leaving other misc fees that might be included.
A: Mr. Arrasmth's response is correct., as far as it goes, but he omits one major benefit of a Ch. 13 filing: no interest accrues on the amount of your mortgage arrearage during your bankruptcy.
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A:
When you're in a Chapter 13 bankruptcy, the repayment plan is designed to help you catch up on missed mortgage payments while maintaining your regular mortgage payments. The trustee reviews your income, expenses, and debts to determine a reasonable payment plan. This plan typically spans three to five years.
In your case, if you're $100K behind, the trustee will calculate a repayment amount that includes catching up on the $100K over the course of the plan. Instead of simply dividing the $100K by 60 months, the repayment amount may be adjusted based on what you can reasonably afford after covering your living expenses and ongoing mortgage payments.
Your regular mortgage payments will continue as usual during the plan, while the arrears are spread out over the repayment period. This way, you gradually get back on track without overwhelming your budget.
Martha Warriner Jarrett and Timothy Denison agree with this answer
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