Current Presidental Candidates Debate Their Support and Opposition to BAPCPA

[justbroke]

Barbisi... I wish I didn't touch my 401K either. The things that I have now learned would have saved me... at least $100K of misery.

[Barbisi]

Jb, I second that - we realize now we should have just kept renting until we came to the conclusion (as we have these last hard 4 years!) that what we really wanted was to relocate! Getting a 401K loan as a down payment on a run down house that could only lead to a five year BK13 was the dumbest decision ever and I hope 2022 will be the beginning of a better life -elsewhere! Amen.

[Attie2]

Barbsi, I tend to agree with you. The Chapter 13 system is difficult and doesn't allow for "life" to happen. Last year I had major home expenses occur at the 2 year mark. Having to replace the main stack in the kitchen and...wait for it...the furnace! If a debtor is paying all disposable income into a plan...that leaves very little to 'save up' for major events like what I went through last year. Believe I was in tears. I walked dogs through WAG just to pay for part of the repairs. Went 6 months without a kitchen sink, went from May of last year until late October without a furnace(which means no A/C summertime) had to use a window air conditioner just to sleep. The car is at 197,000 miles and yep...the roof is needing serious attention too. Two veterinary bills ran over $1000 a piece.

When you are starting from zero all over again and all extra money goes into the plan...there's no savings or room for life. I busted my butt last year to get through. I have lost friends because I work too much. I had one tell me to slow down or I am going to burnout. LOL. I looked at her and said, I'll take burnout over freezing to death. Anyone else would have access to credit for major expenses like a furnace, roof, even a car. But in Chapter 13 the law is you can't incur new debt...but major expenses happen. Expenses that any normal homeowner would use credit to fix. Let alone someone 2 years into a Chapter 13 with very little savings.

I was thinking about this all last week. I managed last year, but it cost me a lot more than a few thousand dollars. It cost me my sanity, my general health, and any support system I had. The car needs a $2000 repair now...LOL. The well is dry right now. And I am exhausted.

[sophieanne]

Attie2 - I'm glad you survived last year... When you had your problems did you speak to your attorney??? I completed a chapter 13...my confirmation document said I couldn't incur debt WITHOUT the trustee's approval. They may say no, but they might not. People should speak to their attorney to see if there are any options to help you through difficult times. I was in a 100% payback plan, I had 2 times where I ran into an issue. My trustee allowed me to skip a payment then make it up through the end of the plan. I know everyone's situation can be different, but you don't know unless you ask.

[Barbisi]

Attie, I think I remember you posting during the period of 2 years that all posts were lost (2017-19) and all I can say is I definitely can empathize with everything you are dealing with and had to go through. People who have had easier BKs will always try to minimize what you are experiencing and don't want to hear anything but cheering for the "blessed budget" and what a wonderful experience BK13 should be because you should be "100% debt free" at the end. If however you are going to have say 30k in house repairs because you have to let everything go for 5 years, aren't you going to be in debt again somehow?
I have yet to meet any one (mainly doctors) privy to our BK13 who envy us our lack of financial cushion and ability to obtain emergency credit . Think about it :Is Bk13 an envious position to be in?
I don't know what a kitchen stack is, but I'm sorry you couldn't have a sink for six months, your furnance went, your pets needed so much expensive care ,your car needs a big repair and your roof is in disrepair.
I have four cats (one 18 years old!), a sixteen year old car with 200+k miles, a furnace which we have been warned should be replaced soon, and other home issues just starting to manifest themselves, so I totally sympathize with you. We owed $1100 to the IRS this year (an anomaly) but luckily we saved just enough to avoid crippling penalties and fees.
Your lawyer might have allowed you to skip a payment or two, but when I had a cancer scare and thought I might need a big amount for the surgeon and hospital, my heartless attorney was brusque and made it clear ,we better pay - or else! No sympathy at all! I think filers in 100% payback are treated differently and are granted more leeway. (Just MOHO!)
Good luck making it through this year,Attie! You deserve some serious downtime.

[shipo]

I think filers in 100% payback are treated differently and are granted more leeway.

I'm just curious, aren't most folks who've filed for Chapter 13 operating on a 100% payback mode? Or are you differentiating folks operating under a 100% DMI versus a plan which pays back 100% of the outstanding debt?

[sophieanne]

@Barbsi - sometimes people in 100% do sometimes have a little leeway but it doesn't change the fact...they still have to pay 100% of their debt which, in most cases, is significantly higher than people not paying the full amount. Everything is relative. I'm glad I was able to pay back 100%, but that doesn't mean I didn't feel a little jealous that I had to pay everything back while others are paying back small percentages of what they owe. Unfortunately, the system is what it is. It's hard no matter what plan you're in.

[Barbisi]

Shipo , what I meant was being able to pay 100% of the CC claims.
Sophieanne, I think that people like yourself who are able to pay back 100% are lucky because it bodes well for their post-BK13 future. You 100% payback guys must have a pretty significant income and a low mortgage (ours is over $2200 a month and climbing plus the monthly solar panel lease) to be able to pay the full amount! (The lawyer told us our CC debt was extremely high compared to others he had represented, and that our mortgage was very high too. But that's Colorado!!!)
The fact that we can only pay a much smaller percentage of our CC debt is not due to some fluke of luck, it's because we are living in a too high COL state we need to flee as soon as this whole mess ends. We ,and others like us, simply don't have the cash to pay as much as you folks in the 100% payback club - it's that simple.
If we could have paid back 100% we would have (and you can be certain the trustee would have enforced it. LOL! )

[sophieanne]

@Barbsi...just nicely saying, be cautious of what you think are other people's ability to pay. You don't know the background or expenses or pay of people who are filing. My mortgage was high too ($1900/month) but my everyday living expenses were low (there were the two of us and we learned to live very cheaply). There are people who make a lot of money who still can be in a non-100% plan or in Chapter 7 due to exemptions, etc. Also, people in 100% plans can have just as many struggles as everyone else. If everything was easy and we had lots of money, there's a good chance we wouldn't have filed bk. Don't assume everyone in a 100% has significant income. Making judgements (blank statements) of things you really don't know for sure isn't fair.

[shipo]

@Barbsi...just nicely saying, be cautious of what you think are other people's ability to pay. You don't know the background or expenses or pay of people who are filing. My mortgage was high too ($1900/month) but my everyday living expenses were low (there were the two of us and we learned to live very cheaply). There are people who make a lot of money who still can be in a non-100% plan or in Chapter 7 due to exemptions, etc. Also, people in 100% plans can have just as many struggles as everyone else. If everything was easy and we had lots of money, there's a good chance we wouldn't have filed bk. Don't assume everyone in a 100% has significant income. Making judgements (blank statements) of things you really don't know for sure isn't fair.

Well said, I earn a fairly high income, however, due to the failure of my wife's small business as well as the failure of a niche business started by my former business partner, I ended up with credit card and other unsecured debt totaling several times my annual gross income. The hell of it is, I didn't spend a dime of the money which drove me into filing for Chapter 13.

The above said, my lawyer was very shrewd in the way she drew up my Chapter 13 filing and was able to keep my payments relatively tolerable. Was I living large during the 60 months? No. However, after reading some of the horror stories here, I can honestly say, pro-se filings should be left to the "pros", and for the rest of us, shop around for a good lawyer; the few extra thousand you will spend up front will be more than offset by a more tolerable existence during the years sitting in the penalty box.

[sophieanne]

@shipo..thank you, I appreciate you sharing your situation. And you make a valid point..people should look around for a lawyer that has good ideas and you feel comfortable with. I wish you the best as you go through this process. I hope you'll keep us informed of how you're doing.

[shipo]

@shipo..thank you, I appreciate you sharing your situation. And you make a valid point..people should look around for a lawyer that has good ideas and you feel comfortable with. I wish you the best as you go through this process. I hope you'll keep us informed of how you're doing.

Thanks sophieanne, I'm in pretty good shape right now; as I posted in a different thread, I made my sixty-first and final payment to the trustee earlier this month and last week I was copied on a notification to my lawyer from the Trustee indicating I was "...entitled to a discharge...", so now the waiting begins until I can start rebuilding my credit.

For others just embarking upon, or in the midst of, a Chapter 13 journey, take heart, the process is uncomfortable, but not impossible, and there are a few things one can do to at least partially ease the burden. From my perspective, the single most helpful thing I did was to continually tinker with my 401K withholding percentage to artificially keep my taxable income within a few hundred dollars of my base year, even though raises, promotions, and bonuses were sent my way during the 60 months. The principle impact this tinkering had was to prevent the Trustee from increasing my monthly payment amount into the plan.

I know not everybody has the luxury of being able to contribute to a 401K, so clearly this trick won't work for everyone, but for those who can, it also allows you to build in your own effective safety net in that, if the absolute worst happens and you need extra money for a "life event", and the Trustee/Court will not allow you to incur extra debt for the event, I believe you can borrow against your 401K without court approval. Note, I said, "I believe you can borrow...", I borrowed a few thousand for two months during my third year and was able to pay it back without court approval or even their knowledge. I never asked permission, I just did it, and the company administering my 401K never asked any questions, they just immediately wired money into my bank account.

[Barbisi]

I must say in my defense that my husband earns more than $100k (now at the new job!) and on paper we should be in a much better position but there is no way we could have repaid or can repay the entire amount we owed. We spend more than $400 per month additionally for chiropractic care just to function in a frigid and brutal climate that I long to leave. I feel that my struggles are just as pertinent as every one else's and even when others try to negate my complaints, I will continue to express them because that is what free speech is about. So attie2 and Barbisi appear to have more problems than others who seem to tolerate well the challenges of BK13. Of course this is only my humble opinion which I do have a right to express.
Shipo huge congrats on a triumphant start to your debt free life!
Unfortunately we are currently repaying a $15k 401k loan that runs until 2029 so we can't tap into my husband's 401k at all for the foreseeable future .
Justbroke referred to using his 401k as causing"misery". I heartily concur and think again in MOHO that BK13 is misery itself.

[shipo]

I must say in my defense that my husband earns more than $100k (now at the new job!) and on paper we should be in a much better position but there is no way we could have repaid or can repay the entire amount we owed. We spend more than $400 per month additionally for chiropractic care just to function in a frigid and brutal climate that I long to leave. I feel that my struggles are just as pertinent as every one else's and even when others try to negate my complaints, I will continue to express them because that is what free speech is about. So attie2 and Barbisi appear to have more problems than others who seem to tolerate well the challenges of BK13. Of course this is only my humble opinion which I do have a right to express.
Shipo huge congrats on a triumphant start to your debt free life!
Unfortunately we are currently repaying a $15k 401k loan that runs until 2029 so we can't tap into my husband's 401k at all for the foreseeable future .
Justbroke referred to using his 401k as causing"misery". I heartily concur and think again in MOHO that BK13 is misery itself.

Yeesh, that sucketh much about being locked out of your 401K. Since I've never rolled one over I do not have a full appreciation for all of the rollover-rules; does the fact you have an outstanding loan from your previous 401K imply you cannot roll it into your husband's new company until the $15,000 is paid in full?

[shipo]

Ugh, mis-post. :p