Well my parents found out 😬😳

[imtryingtho]

So many updates, where to start...🤔

We officially filed on 11/11/2020. We had our 341 meeting on 12/2/2020. Our plan payment will be 5208.50, but this includes a $2950 house payment and $735 car payment. We’ll have about $3400 a month for everything else. Sounds like a lot, but wow does it go quickly if you don’t track every penny.

We did our 341 meeting by telephone, no creditors showed up (but Wells Fargo Auto has filed an objection to the valuation of my car and interest rate in the plan). Most of our questions from the trustee seemed pretty standard, besides asking me if I plan to find a job. I’m a stay at home mom of a 1 and 4 year old, so working would just be paying for daycare at this point and given we’re in a pandemic, she dropped it pretty quickly. She said she thought the payment calculation was off by about $60 a month, so we’re waiting for our lawyer and her to discuss that. She also wanted another paystub from my husband because she thinks his income is higher than what we submitted. I’m sure this is due to her using total annual and he was hourly with overtime at the start of the year. That’s no longer the case. She stated on the call that she doesn’t plan to file an objection which is a great thing to hear! Our medical was $438 above standard and I was shocked she was fine with no documentation. She said they’ll be requesting our tax return and any tax refunds each year. We’re going to adjust my husband’s withholding so any refund would be minimal.

Given we aren’t on a 100% plan or anything close to it, it will be mostly pointless for me to work the next five years unless it’s for experience, which is a huge bummer.. We discussed briefly with our lawyer and he suggested if I worked I could probably max out my 401k contributions so I’m keeping as much as possible at least. I’m not sure how that would go over with the trustee given it would be a new job and impossible to show a history of contributing. It’ll be a year or two before I’m ready to work since we would want our oldest in kindergarten first. Our lawyer is very good at working the expenses though so I’m sure he could find ways to add expenses to our plan so we’re keeping some of the money. We could put our youngest in the fanciest daycare I guess 😂 Maybe it would be worth it when he’s preschool age so that my salary is at least going toward preschool education for him and retirement savings.

Lastly... my parents found out we filed!!! My dad got a letter from Wells Fargo on a student loan he co-signed literally just to inform him. He’ll be protected at least. They were super supportive, my mom has been really encouraging about not feeling bad about it, and I found out my parents filed chapter 7 when we were young!!! My mom said they had no attorney and it was humiliating the way they were treated in court. Doing a chapter 13 with a lawyer(mostly paid for with legal benefits through my husband’s work) and high income is definitely a privilege and I try not to forget that. I’m excited about this loan as it’s not a government loan and our attorney is trying to get it discharged as a “regular loan for student.” Still a bit stressed about my other student loans getting minimal payments for five years while the interest accumulates. Hoping for some student loan reform in the next 4 years.

Overall, we are feeling optimistic but definitely scared of the “what if’s” going forward. Dog vet bills or broken appliances scare me the most I think.

Thanks everyone for being so supportive and informative throughout this process.

[shipo]

Thanks for the updates; keep us posted as your situation evolves.

[NoMoney30]

Wow! That's a wild ride. At first when I saw your payment I was like holy cow! But then saw your mortgage is in that. My 13 payment is 2901 and my house payment is 2569. But my mortgage is outside the bankruptcy. My husband doesn't work and I do and I also got a lot of flack for my husband not working ... but we have a young son and he's daddy daycare so if he worked it would just go right out the door in childcare. So, I feel ya on that one. Our trustee was awful and my lawyer was awful. I think my plan is paying like 60% and we are just coming up to almost 2 years into it this coming March.

Your what if's are happening to me right now... my cat just got a urinary block and I had to cry in front of the vet and tell her of my bankruptcy to get her to agree to payments. Its like over 1,000 bucks and with how I got shafted in my BK plan we have to scrape by every paycheck and I never have anything left over to save. I think I have like 15 bucks in my bank account right now. I've tried cutting back a lot of our expenses where I can but with kids and "what ifs" its so hard to do anything. I see lots of people saying they saved up a lot of money in their bk and I'm so jealous. I even opted for the high deductible health insurance from my company for next year instead of our "premium" plan just to save some money... like this huge risk of my family's health just to save a few hundred per check. My company at least gives us some HSA money and I am going to put a large amount of the savings into the HSA for the first part of the year to build up a buffer...but it is scary.

I hope everything goes smoothly for you! Sounds like we have a lot of similarities aside from your trustee and attorney seem much better than mine.

[flashoflight]

Good update.

I just want to add the following as a reminder. If you are somewhere between a 1% plan and 99% chapter 13 plan, your unsecured creditors are paying for your lawyer (as well as the trustee's cut) except for the upfront portion. So you should select the best chapter 13 attorney possible and not restrict your choices based on cost.

About the budget - it's still our responsibility to come up with a budget. A good lawyer will answer questions from us concerning maximizing the budget (eg. is it ok to choose the most expensive low deductible auto and health insurance) but we have to come up with the ideas in the budget in the end. I put pet expenses in there and had to turn in vet receipts but it was in the budget. We've been lucky with pets so far, but I built in a cushion with some aggressive pre-petition vet check-ups and saying yes to every pet rx. I was very determined to remember that paying anybody else (insurer, vet, doctor, etc.) is better than paying Visa and Mastercard.

[imtryingtho]

Wow! That's a wild ride. At first when I saw your payment I was like holy cow! But then saw your mortgage is in that. My 13 payment is 2901 and my house payment is 2569. But my mortgage is outside the bankruptcy. My husband doesn't work and I do and I also got a lot of flack for my husband not working ... but we have a young son and he's daddy daycare so if he worked it would just go right out the door in childcare. So, I feel ya on that one. Our trustee was awful and my lawyer was awful. I think my plan is paying like 60% and we are just coming up to almost 2 years into it this coming March.

Your what if's are happening to me right now... my cat just got a urinary block and I had to cry in front of the vet and tell her of my bankruptcy to get her to agree to payments. Its like over 1,000 bucks and with how I got shafted in my BK plan we have to scrape by every paycheck and I never have anything left over to save. I think I have like 15 bucks in my bank account right now. I've tried cutting back a lot of our expenses where I can but with kids and "what ifs" its so hard to do anything. I see lots of people saying they saved up a lot of money in their bk and I'm so jealous. I even opted for the high deductible health insurance from my company for next year instead of our "premium" plan just to save some money... like this huge risk of my family's health just to save a few hundred per check. My company at least gives us some HSA money and I am going to put a large amount of the savings into the HSA for the first part of the year to build up a buffer...but it is scary.

I hope everything goes smoothly for you! Sounds like we have a lot of similarities aside from your trustee and attorney seem much better than mine.

ugh I’m so sorry you’re having a rough go of it!!! animal stuff is so stressful because we aren’t the kind to put them to sleep over something minor just because it’s expensive. We lost a dog this year who had to have toe amputations for cancer previously so we are pretty all in. We only have two dogs now but they’re 12 year olds so it’s only going to get more costly. They’re both on prescription meds and need routine blood work.

We luckily have been allowed to exempt some savings going into this but 5 years is a long time to assume it would last us. They also let us keep some unvested stock which I’m still baffled by! I’m hoping we can just leave it and not cash out because it would be nice for morale to know we have them. It’s so hard with bk to not feel like crap about your financial situation. We will definitely need that money for retirement and college(x2) savings since we have virtually nothing right now. So maybe if we can leave it then when our 13 ends we can just dump it into those savings. But not until we are out of 13 since it might be needed for emergencies.

I can’t imagine having to pay 60%... that seems so unfair!

Our attorney said that stay at home dads get grilled by trustees compared to stay at home moms. Our trustee isn’t perfect but he has worked with her enough that they seem to have a good back and forth and he also said she’s been “amenable” lately lol I guess we filed at a good time.

[imtryingtho]

Good update.

I just want to add the following as a reminder. If you are somewhere between a 1% plan and 99% chapter 13 plan, your unsecured creditors are paying for your lawyer (as well as the trustee's cut) except for the upfront portion. So you should select the best chapter 13 attorney possible and not restrict your choices based on cost.

About the budget - it's still our responsibility to come up with a budget. A good lawyer will answer questions from us concerning maximizing the budget (eg. is it ok to choose the most expensive low deductible auto and health insurance) but we have to come up with the ideas in the budget in the end. I put pet expenses in there and had to turn in vet receipts but it was in the budget. We've been lucky with pets so far, but I built in a cushion with some aggressive pre-petition vet check-ups and saying yes to every pet rx. I was very determined to remember that paying anybody else (insurer, vet, doctor, etc.) is better than paying Visa and Mastercard.

Yeah we were a little irritated because he skimmed us on the pet expenses, we wrote in a high number based on their food and meds and he made it seem like going in with that would be a bad look. The current expense for pets is not a realistic number at all for pets the age we have but we were able to add a lot of buffer in (human) medical to make the difference. We also had an issue due to our exemptions and basically there was no further room for expenses in our budget plan or the amount going to creditors wouldn’t have been equal to what the creditors would’ve gotten in a chapter 7!

[justbroke]

I just want to add the following as a reminder. If you are somewhere between a 1% plan and 99% chapter 13 plan, your unsecured creditors are paying for your lawyer (as well as the trustee's cut) except for the upfront portion. So you should select the best chapter 13 attorney possible and not restrict your choices based on cost.

Not just your attorney and Trustee, but at least in my case, a new car.

[flashoflight]

We also had an issue due to our exemptions and basically there was no further room for expenses in our budget plan or the amount going to creditors wouldn’t have been equal to what the creditors would’ve gotten in a chapter 7!

During this whole journey, I've noticed that many of the folks who don't enjoy chapter 13 are the ones that have a "best interest of the creditors in a hypothetical chapter 7" problem which is caused by non-exempt assets. I heard a few attorneys talk about this issue and hint that they think it's better to give up the non-exempt property rather than try to save it. In my case, it was the difference between the $100k homestead exemption and the higher $175k homestead exemption. I would have given up the house rather than try to cope with a $75k hole ($1250/mo additional). I had started packing in anticipation of losing this exemption fight, but my lawyer put up good evidence of disability and the trustee gave up. Afterwards, the house's value shot up $100k+ thanks to COVID causing the move to the suburbs.

[justbroke]

During this whole journey, I've noticed that many of the folks who don't enjoy chapter 13 are the ones that have a "best interest of the creditors in a hypothetical chapter 7" problem which is caused by non-exempt assets.

What an excellent observation!

I call this the "trying to keep property which I really can't afford" test. I had a similar issue with trying to keep investment property in my Chapter 13/7. It took me 20 months to realize it wasn't worth the $7,000+/month payment to the Chapter 13 Trustee. I converted to a Chapter 7, and the rest is history.

[Carmella]

imtryingtho I am glad your parents are supportive. You'd be surprised how many people have been through bankruptcy and do not talk about it.

We are paying back 100% plus our house and two cars outside the plan. It is not easy. We don't have any savings and cannot save up like other people have. My husband and I are sharing a car trying to save up for repairs and worried that my "new" car (almost 4 yrs old now) is going to need regular repairs like brakes and it definitely needs tires.

But the chapter 13 is a necessary thing I am thankful for because our debt will be gone and there was really no way for us to get out from under it. I'm glad we have the option. And it is lesser stress than the debt prior to BK.

If I were you I wouldn't even think about working. Take advantage of being home with the kids even once school starts because then you might have before and after school costs (which wasn't cheap when my kid was young) and then sitters or summer programs to pay for when they are not in school or sitters over Christmas/Spring breaks, etc. If working causes you to have more expenses plus paying the trustee more then it's really not worth it. I guess that is something your attorney can advise you the pros and cons. 5 yrs goes fast when you have young children. Staying home and being able to frugally handle the budget with less eating out, less use of car/gasoline, etc.

With your kids being young (once Covid starts clearing up) you can find things for them to do that are free to little cost. Even family memberships to museums or zoos, etc can be cost effective and many times (at least here) there are free programs for members to participate in or if there is a charge it's much less than if you don't have a membership.

I really wouldn't worry about working because even if you sit out 5 yrs you have the reason to care for the kids as a "good reason," it's not like you were just lazy or if you were a stay a home wife people might wonder why you didn't work. I think it works to your advantage to be SAHM especially during the pandemic/uncertainty. And you still have many years to work in the future, I am assuming you are on the younger side since you have youngins at home. You aren't close to retirement like my husband or having about 10 yrs left to work like me.

[Barbisi]

Speaking of family finding out, my husband was under so much pressure to fly to Arkansas to visit his brother and mother,that he finally admitted we were in the middle of BK13. His mother pretended the situation hadn't happened at all,while the brother(who sports a comical southern accent since moving to Arkansas from NY state at age 10 (!) curtly replied, "OK". Neither of them has mentioned it this year ,but at least the pandemic has ended their bullying about when my husband is going to "come home".
His entire family (including his late father) never really supported his artistic ambitions (3D animation,VO, etc.) and were openly hostile to me from the beginning, so much so in fact, I stopped speaking to them many years ago.
They are bitter medical professionals (mother ( retired nurse), brother (pharmacist) and above mentioned father ( retired chemist) who do/ did not respect anything non technical or non medical and believe/d in very narrow boundaries for careers and hobbies, dislike animals (except hunting dogs), enthusiasm and energy.They are bitter because each works/ed their entire life hating their daily job, but were/ are convinced they have/had no choice but their current path. I think this is one reason I loathe bk13 so much -because it is forcing me to live some where I no longer want to be until (1) the trustee allows us a discharge, (2) we can sell this house (before the next housing bust) and my husband can find a decent job in another state that we can then relocate to. So, in some ways, I have ended up like his parents, miserable, and with out a guarantee I can change my life as I want and need to.
For those who know our BK13 history, you know this bankruptcy has been much more hellacious than we ever anticipated, and for those who don't, I invite you to read my many other posts.
Speaking of broken appliances, our 4 year old Samsung SS double french door refrigerator (purchased with CCs in 2016) stopped making ice and staying cold on Tuesday. A Samsung repair person is coming this coming Tuesday.(All the food was saved because it's very cold here now and we have two old working fridges/freezers in the garage.)
So we shall see how bad the damage is. LOL

[shipo]

Barbisi, reading your posts makes me so thankful I had a great attorney who pushed me hard up front to do an extremely deep dive into my finances so she could make a strong case on my behalf. Were it not for her, uhhh, dare I use the term in this polarized day and age, "activism", my Chapter 13 may well have been like yours. That said, it was still a difficult 5 years (actually 7 years as my financial melt down started more than two years before I was able to file), and now with it in my rear-view mirror, I am looking forward to doubling down on saving for retirement (which we hope to do in our early 70s), and maybe, just maybe, buying a new house.

Said another way, if I recall correctly, you have just over a year to go; hang in there, things are going to get "Mo' Betta'" (to borrow part of the name of a Blues club I used to frequent in Chicago, Mo' Betta' Blues).

[Barbisi]

Well, shipo you certainly are right about the attorney - how we arrived at our I&J form figures was haphazard at best. He ended up filling in most of the form with whatever was allowed.We never knew what the minimum "best interest of the creditors" amount was. We surmise that the amount may have been the trustee's original proposed amount , which was nearly double what we ended up paying until the September 2020 increase. It sounds like "owning" this second house (after we sold the first money pit disaster) automatically increased the required minimum payment ,regardless of what my husband actually made. We thought his gross salary determined whether we were forced into a 5 year 13 or not. Every time the trustee demanded an increase, he was successful.So much for our lawyer.LOL
I think buying an "investor" house that we couldn't afford to fix and update, is the sole reason we landed in this 5 year long quicksand sentence. We were not prepared for 100K of sweat equity, and neither one of us is handy with repairs. Renting is definitely the best option going forward until we are at least in a position to pay for repairs with cash and have an adequate down payment.We should never rush buying a house some where we can no longer afford to rent (like here) and purchase some shabby fixer upper that we can't update with cash (like here).
And you are right about this ending in a little over a year (Feb.2022 ). I hope you're right about things getting better!

[imtryingtho]

flashoflight blahhhh we got an objection from the trustee because they are counting my husbands restricted stock units that vested as his “income” on paychecks. RSUs are taxed when they vest by selling off the amount of stock to cover taxes. Well, these RSUs are one of our exemptions! The trustee is saying we have $1600 more in DI than we petitioned. 😳😳😳😳😳 OUT OF THE QUESTION. My husband’s paycheck is $1700 every two weeks. We would have $1800 to live on as a family of four. I wish this had come up during our 341 meeting so we could explain it.

She tacked on a request for medical documentation for the medical expenses which is also something she was unbothered by in the 341 meeting.

[flashoflight]

imtryingtho Newly vested RSUs are income just like your paycheck is income. You spend your net paycheck on trustee approved expenses and anything leftover (disposable income) doesn't fall through as exempt property in your savings account. Instead, leftover paycheck funds (DI) belong to your creditors via the trustee. You are supposed to sell the RSUs as they vest and hand over the net proceeds to the creditors. Pre-petition you could have tried to increase your expenses to spend the net RSU funds, but it's really too late because you are not supposed to make up expense numbers out of thin air to fit income. Expenses numbers are determined pre-petition with receipts to back up schedule J. It seems like your lawyer is not very good and just screwed you over on the RSUs. If you had known the RSUs were income, you could have spent months pre-petition spending those RSU funds on regularly recurring expenses like deferred maintenance on your house, medical, 401k contribution, charitable contributions, pets, etc. But you can't really keep the RSUs for future investment. The only exception to all this is pre-petition 401k contributions that continue post-petition which can soak up income and become exempt assets in a retirement account.

Prior to filing my case, my lawyer requested documentation for expenses he felt would be challenged by the trustee. Then again, I planned this BK by diverting minimum payments to expenses that counted in the budget. He turned all the receipts in just after filing so we didn't have to haggle over expenses very much. He forgot to include vet receipts and documentation was requested at the 341. Not unusual for the trustee to keep requesting documentation. My disposable income at initial filing turned out to be exactly the same four months later at confirmation.