So confused

[needamiracle]

We are heading toward chapter 13 (primarily because of the house and our income) - it will be a 5 year plan. I received a 15% raise at work 2 months ago but we still aren't making head way. It's just too far gone. I contemplated picking up side jobs as an independent contractor which could bring in another 1000-1500 a month but isn't guaranteed. A few questions:

1. Should we file now before we get a full 6 months of my 15% higher pay? Should my wife quit her job and tough it out for 6 months before filing? I assume they will account for my future earnings at the higher rate when calculating DMI but if they base it on the prior 6 month average, it obviously will be lower if we file now with 4 months at the lower salary and 2 months at the higher.

2. We live in Virginia and some of the allowable expenses are much less than we actually pay. As an example, utilities are much higher. Home maintenance is higher because of stupid swimming pool and all the money it takes to keep it going. How do they handle additional expenses?

3. How do I find a decent attorney. I met with two and one had no interest once he discovered there was no way to make us a Chapter 7. The other answered some questions incorrectly so I left his office without much confidence in his abilities. I don't know where to look.

4. Some bills, primarily credit cards and personal loans, are one payment behind now. Should I just stop paying all the unsecured stuff since I know it's almost inevitable?

I'm so confused and down-right exhausted from trying to figure this stuff out and keeping track of robbing Peter to pay Paul. There's been a couple of times when I've been ready just to walk away from everything. Open for advice.

Thanks for reading.

[tissa]

Have you tried figuring out a budget, there are some calculators online that can predict what your approximate chap 13 payment will be. I used one of these and then figured out a budget. I think I used the Nolo site but it was 3.5 years ago so I don't remember for sure but if you google chap 13 calculator several sites come up. Some will explain a bit about the process. Then try living for a few months while not paying your unsecured bills and saving that payment amount or a preferably a little more. That should get you enough money to pay

the attorney fees for the Chapter 13 when you file and maybe a little savings for a cushion. Usually you can safely not pay unsecured bills for about 6 months before anyone will try to sue you or anything. During this time also try to talk to more lawyers, look for ones in large cities near you, I just did internet searches in my area and interviewed a few, but my case was pretty straight forward.

For bills above the allowable expenses a good attorney will discuss these with you, for the 3-6 months that you are saving up for an attorney save all paperwork for any bills like this and discuss it with prospective attorneys when you choose an attorney they will probably want copies of all your bills.

Also if you have debt with the bank you currently bank with then open a new account at a bank you haven't had any dealings with. And use this new account from now on, some banks will freeze your account if you have debt with them when you file. Most banks will close your account if you have debt with them so it's best to get a head start.

This is just my opinion and what I did everyone's case is different. Hopefully you'll get some other answers and opinions. Good Luck.

[needamiracle]

Tissa, thanks for your response. We actually finally found an attorney we were very comfortable with and have retained him. He was able to answer most questions. My wife actually had to give up her job due to her health and we are currently waiting out the 6 months to not have her income included in hopes we fall slightly below the state median and can do 3 years instead of 5. I appreciate your advice. I just hope we have made the right decision.

[Leemo1980]

I know this answer is not terribly informative but a good laywer can answer everything you need to know. I tried looking around on the internet when I went to file and found that its as effective as trying to diagnose a sickness without a doctor. I had the same frustration as you are experiencing and once I found a good attorney it made all the difference. Once I got through that initial stage of guilt and embarrassment it really wasn't that big of a deal. If I were you I would focus 100% on finding an attorney who can advise you moving forward. Best of luck to you.

[NoMoney30]

Hi! I'm in VA too. Just got my 13 plan confirmed after 9 months. Are you in Alexandria district or Richmond? I stopped paying my bills in December of 2018 and didn't file until March of this year. I found a great lawyer I loved only to find that he pawned me off to a cheaper attorney in the firm and I really do not like him. He actually made me cry at one point... so definitely ask as many questions of your attorney as you can.

[justbroke]

Welcome to BKForum.

1. Should we file now before we get a full 6 months of my 15% higher pay? Should my wife quit her job and tough it out for 6 months before filing? I assume they will account for my future earnings at the higher rate when calculating DMI but if they base it on the prior 6 month average, it obviously will be lower if we file now with 4 months at the lower salary and 2 months at the higher.

It won't matter. The Trustee will look at your current paystubs at the 341 Meeting and maybe after. This is especially the case where the income changed and the Trustee is trying to gauge your "forward looking" income and expenses.

A Chapter 13 is forward looking. Despite what is on the Means Test (which looks backwards), the Trustee will look at your Schedule I (income) and Schedule J (expenses). Schedule I is forward looking. Most courts use the Means Test as a "baseline" for a Chapter 13 (the minimum you'll pay). They then look to Schedule I/J to see what you should be paying.

2. We live in Virginia and some of the allowable expenses are much less than we actually pay. As an example, utilities are much higher. Home maintenance is higher because of stupid swimming pool and all the money it takes to keep it going. How do they handle additional expenses?

If your utilities are higher, you may have a fight. If you put that you pay more than the IRS allowances for "non-rent/non-mortgage" expense (which covers utilities), then you have to put that amount on a different line. Once you do that, the Trustee will demand explanations and good documentation. It's not enough to say it's more; you prove it by showing receipts that are averaged over 12 months. For home maintenance, there is no real category on the Means Test but there are household maintenance line on Schedule J (expenses). You'd just put it there as part of your overall home maintenance. They will likely question it... or they may not even bat an eyelash. I had a pool and 3,800sq ft home. I did, however, purchase a home/pool/spa warranty to cover my pool maintenance costs (leaks, pumps, filters -- not the cartridges, water heater, pipes, etc).

3. How do I find a decent attorney. I met with two and one had no interest once he discovered there was no way to make us a Chapter 7. The other answered some questions incorrectly so I left his office without much confidence in his abilities. I don't know where to look.

Some attorneys don't like to do Chapter 7s. It's that plain and simple. You need to keep looking for attorneys that specialize in Chapter 13s. This is important because you have higher than normal expense and you don't want an attorney that just keeps saying "belt tightening" (search for my rant on Chapter 13s and especially on belt-tightening).

4. Some bills, primarily credit cards and personal loans, are one payment behind now. Should I just stop paying all the unsecured stuff since I know it's almost inevitable?

Ask your attorney, but the general consensus is that if you're filing within 6 months, to stop paying. So long as you haven't run up the cards just before stopping payments, it should be fine.