Your budget as compared to IRS standard allowances is going to determine, in part, how much you pay back to creditors over the life of your plan. The video below touches upon that notion.
Jesse Barrientes: Well, you mentioned the plan payment. How do I go about paying the trustee? So assume now we have gone through the numbers and we know what my disposable income is. And by the way, that’s pretty lean, right? There’s nothing else built in that budget. There’s nothing for entertainment or anything else. I’m going to be living lean for that period of time.
David Siegel: Yeah, well, you should be living lean because you are depriving your creditors and making them wait 3 to 5 years. So the bankruptcy court doesn’t want you living high on the hog, having steak and lobster every weekend while your creditors are waking for $.10 on the dollar 3 to 5 years from now. So that’s the theory there. You have to live within your means and go by IRS budgeted guidelines. So you can’t live high on the hog. You are really going to be living like you said, lean. But that’s for fairness of the whole process.
