My understanding (possibly incorrect) of a Ch 13 repayment plan, is that after whatever allowable exemptions there may be for her assets (which i believe her only assets would be exempt), if a persons income is not sufficient to cover a certain predetermined level of expenses, then there is no additional amount that would go to repay her creditors. Assuming that is correct, would the amount owed to the SSA just not be part of the repayment plan or how would that work?
A Chapter 13 repayment plan is complicated and determined by a variety of factors. First the monthly payment is determined by Schedule 22C, wherein her disposable monthly income is determined by various standards set by the government and secured creditors she owes. This payment then is split over 3 or 5 years. The payments will include the trustee fees, the bankruptcy attorney fees, non-dischargeable debt (education debt, taxes, the social security administration debt, etc.), secured creditors (if the trustee requires them to paid inside the plan). Anything owed beyond the required debts to be paid back in the plan will go to the unsecured creditors (example - credit cards).
If she has non-exempt assets (for example - a boat that is paid in full which not exempt), then she has to pay back the unsecured creditors at least as much as the non-exempt portion of her assets. That would increase her plan payments. However, most Chapter 13 plan payments do not require any unsecured creditors to be repaid. If a person does not have enough income to make the minimum monthly required trustee payments determined on Schedule 22C or as determined within the Plan, then they should not be filing Chapter 13. They would then file Chapter 7.
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