When the trustee and you have come to a decision about what you can reasonably afford to pay on your debts, the trust takes this amount to the creditors to review.
Once the creditors approve the proposal, you make monthly payments to the trustee and the trustee sends the money to the creditors.
The trustee takes a percentage of the amount the creditors receive. There is no extra payment made by you to the trustee.
- total consumer debt before the proposal = 50,000
- monthly payment = $1,800/month
- total consumer debt after the proposal = 15,000
- monthly payment = $300/month
The trustee charges the creditors a percentage from the 300 dollars paid to the creditors each month. There is no additional cost to you.