Taking forever!

[JLM0706]

My attorney finally let me know that... I don’t qualify for a chapter 7. I pretty much knew that! He seems hesitant to recommend a 13- keeps telling me the failure rate is 2 out of 3. I just don’t see a choice, especially after ignoring creditors for so long.
I know I’ve asked before, but is 13 really scary? Will I be able to live at all- like vacation, etc.
What is the typical or usual payment?
I’m so scared.

[sophieanne]

Hi JLM0706 … I'm sorry this process is overwhelming. Did you talk to more than one attorney? If not, you might want to. You want to be comfortable with the person who is representing you. A 13 is as scary as you make it...yes it can be hard..but the key is to budget and to live within that budget during your plan. Have you put any money away from the creditors you haven't paid? If possible, a small emergency fund would be helpful for some of the unexpected expenses that may come up. No one can respond about your payment, as everyone is different. It is based on how much you are paid, your exemptions and the debts that you owe. Has your attorney not given you any idea of what that could be? You may have to go without vacation (or have a low budget one) etc. while you're in your plan. As I said earlier a strict budget is key to being successful. I think it's important you talk to your attorney or talk to another so you fully understand what you're getting into. Good luck going forward.

[justbroke]

As sophieanne writes it's manageable. You have to think of a Chapter 13 as having bad credit, not being able to obtain any credit, and being on a very fixed budget. If you can maintain a budget and there are not too many or any serious financial events, a Chapter 13 is manageable. If "life happens" then a Chapter 13 may fail.

The failure rate is actually only about 50% now, based on recent surveys. The #1 cause of failure is because a debtor can't or refused to budget. In other cases, there are events beyond a debtors control that cause the failure; examples such as health, loss of job, and other catastrophic loses.

I was able to do things to entertain my family, but serious vacations (cruises) were out of the question. I was able to get annual passes to the area theme parks in Florida (Busch and SeaWorld) and that was a big hit. Plus I earned frequent hotel and airline miles from work-related travel, so that kept the costs down. The SeaWorld and Busch Gardens tickets were worth every penny. We still pay only the same rates since 2008. As far as theme parks, can't beat their annual pass rates. But that's just an example of something we did.

We also did things like Movie Night and Make Your Own Pizza night. They never knew that I filed and never experienced a day or moment without food, transportation, or a roof over their heads.

[shipo]

Hey JLM0706 , as sophieanne and justbroke have said, Chapter 13 is not for the faint of heart, but it is survivable. A good lawyer will help you find every possible expense to keep the calculated DMI as low as reasonably possible, that coupled with a little belt tightening should see you through. Regarding vacations, road trips worked pretty well for us; a great vacation for a fraction of the cost of a cruise or a European holiday. One final comment, my lawyer strongly recommended I buy a new(er) car prior to my filing as it would A) lower my DMI, and B) most likely last for the duration of the Chapter 13; I opted to try and stick it out with a (then) 14 year old Honda Accord. The car didn't make it and I finally had to scrap it during my fourth year. So, word to the wise, if you don't have a reliable vehicle which can go another five years, you might want to make a change now before it is too late.

[justbroke]

shipo I bought a new car just 4 weeks prior to filing. It's a smart thing to do and if you have a lot of DMI, it is great planning to have a reliable vehicle and use up some of the DMI.

[shipo]

shipo I bought a new car just 4 weeks prior to filing. It's a smart thing to do and if you have a lot of DMI, it is great planning to have a reliable vehicle and use up some of the DMI.

Yup, I definitely screwed that one up; should have taken her (my lawyer's) advice and bought a car. In the end I was able to buy an eleven year old car in good shape for reasonable money (and in cash); in fact, I like the car so much, I am in no hurry to trade up for a newer model in the foreseeable future.

[JLM0706]

Thanks everyone. I do have a 2018 vehicle with a horrible payment and a lot of negative equity. My credit is so messed up now it isn't going to feel different in that regard. I just desperately want to be free of this burden. Oh, vacation- I meant domestic trips, nothing too huge. i have just heard that every dollar I make goes to the trustee. I may try to change attorneys if I don't get more answers tomorrow.

[shipo]

JLM0706, it is definitely advisable to shop around for a BK attorney; not all are created equal. I talked with three attorneys before finding one I trusted and felt comfortable with. As for "every dollar you make going to the Trustee", I wouldn't exactly put it like that; if I remember correctly, my attorney worked with me on monthly expenses by having me log everything I spent over the last couple of months and then, after she reviewed the log, she asked me some very pointed questions regarding other plausible expenditures. In the end I think the delta between my DMI calculation and what I was able to not spend by foregoing discretionary spending allowed me to save maybe as much as three or four hundred during a good month, however, other months dipped into those savings. Now, 60 months after my Chapter 13 journey started, I've about broken even; my bills are paid, my car is well maintained, and I have a small buffer of a couple grand. March will be my first month since 2015 where I didn't need to send money to the Trustee; maybe I should go out and buy a bottle of Champagne. :cool-new:

[JLM0706]

I spoke with 3 attorneys. I liked 2 of them, and ended up going with the more local guy (I live in a rural area). I have paid his retainer so far and he's only told me I don't qualify for the 7. I have done a lot of research, so I know a bit more than he realizes (I think) and really need to either get this going, or start my own repayment plan. I may end up switching to the guy who I'd only meet with once at the 341. I don't know. Ugh. Is it unreasonable to ask my retained guy to share my ch 7 means test results with me?

[Macc404]

JLM0706 Everyone here definitely speaks the truth in terms of finding the right attorney. I met with 1, really liked him, but didn't want to make a premature jump into anything, so I met with 2 more after that. I ended up going with my initial attorney as he made me feel the most comfortable, and I could see myself doing this long-term CH13 relationship with him lol. But seriously, a competent attorney whom makes you feel comfortable as soon as you walk through the door is a major relief in the process. So I would agree with everyone and say shop around and find that one who you feel good about.

I am pretty new to the process (less than 30 days), but I can assure you... the relief I felt the day I signed all my paperwork was a feeling I hadn't felt in a couple years in terms of my financial life. Not to have to worry about the phone calls, and which creditor it could be. Not having to worry about blank letters with no return address and wonder which creditor is it now. Not have to worry about coming home and seeing court documents waiting for me because people are tired of calling. Its been an amazing feeling so far.

I don't view the process itself as scary, but more a short-term financial "rest area" of sorts. Plus, and this again is where finding the right attorney is important, my attorney put together a very "livable" and manageable plan for me. One where we would be able to afford to continue to do small things with the kids here and there, and even a budget friendly vacation (if we choose). I think it's possible for anyone who has a decent lawyer whom they work with, and will work with them.

I know there may be hard times along the way, but it's not forever. I know I have started, I know there could be a hiccup here or there, but I know when it's ending too. Look almost down to 59 months already

I know it can be daunting and even frightening to a certain extent, but once you start, you can feel the wonderful relief that it brings. Knowing you've started, and knowing not only that, but when it will all be over and you can move on with your life. Trust me, I feel like I am much better off now than any other time in the last 2-3 years. And I look forward to feeling that again in about 5 years.

So stay strong, and know it's a great community of folks here for questions and support along the way (at least I think so ).

[JLM0706]

Thank you SO much for the encouragement. I like the short-term, end in sight feeling. I received a certified letter a couple weeks ago and about went crazy. it was NOTHING but I thought I was being sued. Shew.
I really am at the end of my rope- I can either do this, or wait to be sued by one creditor while trying to pay another. Shew.

[shipo]

So stay strong, and know it's a great community of folks here for questions and support along the way (at least I think so ).

Meh, some of us are definitely evil.

[sophieanne]

Macc404 ..thanks for sharing the start of your journey to financial freedom. I think it's very helpful to others who are just getting started and looking into getting the right attorney. Good luck going forward....I think you're going to do great.

[Macc404]

shipo There always are a handful of Trolls out there

sophieanne Thanks. Im looking forward to the journey and the finish line.

JLM0706 I know the feeling. I have this informed delivery service with USPS where they scan the letters and I can see the mail before I check my box each day. Then I have to spend the day waiting, or knowing in some cases, that it's another creditor come knocking. TBH, and in my opinion, it's a stressful and terrible way to live. It's good to be able to look forward again.

In terms of continuing your search, if you do continue the search, I might suggest writing down your narrative and questions before visiting an attorney for your consultation. It's something I did and helped me make great use of the consultation time and provided me the ability to really focus on the attorney and their responses as I used the same, maybe an added question here or there, for all three. My situation never changed just who I was talking to, so it gave a great opportunity to really know who I'd be most comfortable working with. Various resources like AVVO, lawyers.com, Google reviews, and even Facebook all helped out on the research effort as well.

[flashoflight]

i have just heard that every dollar I make goes to the trustee. I may try to change attorneys if I don't get more answers tomorrow.

It's kinda true and not true if you mean "every extra dollar I make goes to the trustee".

There is no incentive to make more than a small amount of extra money per year. The trustee could increase your plan payment if your income goes up a lot after viewing your tax return. It's almost unheard of for the trustee to do anything with a 10% annual increase or less. Your expenses and income are going to change after confirmation, so it has to be pretty big increase for the trustee to become interested. That being said, if you go out and work another 40 hours as an Uber driver post-petition, every dollar is going to the trustee so don't go around volunteering for a ton of overtime or a second full-time job. Your cost-of-living raises or typical meager merit/promotions raises won't go to the trustee.

Depending on your district and whether it is a 100% plan, the extra dollar you make from tax refunds, insurance settlements, lawsuits, etc. may go to the trustee if not exempted by your lawyer or if it exceeds a certain amount.

There are some unusual situations where extra money may go to the trustee.... so if you file a motion to buy a house and suddenly you have a down payment fund, the trustee will ask how you got the money and whether it really should go to unsecured creditors.

This is why the best strategy is to get through plan confirmation and lay low for the rest of the 5 years. You don't want to poke the sleeping dragon. Hopefully nothing breaks in your house, your car doesn't get totaled, and you keep your job.

[JLM0706]

My home is on the old side, as are the appliances... so that is a bit concerning.

[justbroke]

My home is on the old side, as are the appliances... so that is a bit concerning.

While in my Chapter 13 I obtained and maintained a homeowner's warranty. It was worth every penny and I know I received my money's worth. They fixed just about every major appliance in my home over 4 years. They also replaced one of them and fixed several plumbing issues as well as A/C unit issues (2 of the 3 units).