ankruptcy legislation-wage earner plan Personal Finance Problem Jon Morgan is in
ID: 2656865 • Letter: A
Question
ankruptcy legislation-wage earner plan Personal Finance Problem Jon Morgan is in a financial position where he owes more than he eams each month. Due to his lack of ancial planning and a heavy debt load, Jon started missing payments and saw his credit rating plunge. Unless corrective action is taken, personal bankruplcy will folow nrecently contacted his lawyer in order to set up a wage earner plan with his aeditors and estab?sh a dett repayment schedule tatswoa lenh t of his perso al n me Hs editors have all agreed to a plan under which interest payments and late fees will be waived during the repayment period. The process would have Jon make payments to the court, ich then will pay off his creditors n has outstanding debt of $27,700. His creditors have set a repayment period of 4 years during which monthly principal payments are required. They have waived all interest charges d late fees. Jon's yearly take-home income is $30,200. Calculate the monthly debt repayment amount Determine how much excess income Jon wil have each month after making these payments The monthly repayment amount is $(Round to the nearest cent.) Jon's monthly take-home income after monthly debt repayment is s (Round to the nearest cent)Explanation / Answer
Annual repayment = Amount of debt/ N = 27700/4 = $6925
Monthly repayment = Annual payment/12 = 6925/12 = $577.08
Monthly take home after debt repayment = Annual take home/12 – Monthly payments
= 30200/12 – 577.08
=$1939.59
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