Chapter 13 - So many questions after meeting with several attorneys.

[Throwaway92]

Hi All,

I come here after feeling the stress equivalent to an elephant on my chest for the last several weeks.

I am a high income earner in CO (125k), no assets, and my debt has hit an all time high of 190k unsecured (CC and loans) 58k car loan, and 25k school loan. My income recently dropped from 155k to 125k after getting laid off at the end of October y company paid me through the end of the year and I started my new job in January)

I have developed a compulsive gambling addiction over the last 5 years and it is the main cause of my debt and rapidly accelerated when I began sports betting in September of 2020.

Everything hit a fever pitch over this last week after I lost another 15k on credit cards in the month of January and have hit a point where I can barely make all minimums on my debts. I’ve consulted with several attorneys and have gotten some conflicting info and have the following questions:

Gambling debts - some attorneys have said I do not need to wait 90 days to file while others have said to wait. All have said to stop paying on debt, so I don’t know what waiting 90 days could change.

Payment plan amount - I’ve received some wildly varying estimates from $700-$3500 for a monthly payment plan. The lawyer who said $700 built out a budget that accounts for lots of expenses(household of 2) for example $100 on clothes per month, $900 food, $100 entertainment etc etc. Will the trustee require me to prove these expenses? For what it is worth all lawyers have stated the trustee for my county is notoriously “laid back” even allowing for a “misc expense” time in proposed budgets.


I’m looking for any and all advice and info anyone can provide. I’m having trouble sleeping, thinking, living and overall just need this to be over with.

[despritfreya]

Gambling debts - some attorneys have said I do not need to wait 90 days to file while others have said to wait. All have said to stop paying on debt, so I don’t know what waiting 90 days could change.

The attnys advising waiting are being ultra cautions due to 11 USC 523(a)(2)(a) and (c) as the runup on the credit cards for the luxury of gambling could be non-dischargeable even in a Chapter 13. Depending upon the amount you ran up, IMO, if you can wait then wait. If you are only dealing with 1 or 2 thousand, maybe “who cares” if a 523 action is filed. If you ran up $10k on one card within the past 90 days, well. . . you get the picture.

Payment plan amount - I’ve received some wildly varying estimates from $700-$3500 for a monthly payment plan.

That is a huge spread. You need to find out why the higher amounts were suggested. Point of fact is that the Plan you file will be a proposal. The Trustee will then review the proposal and all supporting information (pay stubs, verification of expenses that seem unusual, is funding sufficient to pay what needs to be paid, etc.) and give a recommendation as to the validity of the proposal. You and your attorney will work together to address the issues and, if necessary, you would increase your Plan payment. Start low but recognize that the low may not be so low in the end.

Chapter 13 (or any Chapter bk) is a process. If you want relief from the creditors you file and address issues as they come. From the very beginning be transparent. Disclosure, disclosure, disclosure. Your life is an open book when you do bk. If you are willing to deal with this fact and agree to some hard realities you should be fine.

Des.

[Throwaway92]

Thanks for the reply! I think the spread was so big because they didn’t take the time to actually factor in expenses. For example the take 190k and divide by 60 and assume I am a 100% plan. Ref expenses - do trustees usually ask for proof on things like clothing, which isn’t necessarily a monthly expense, but a “few times a year” kinda thing

[despritfreya]

Ref expenses - do trustees usually ask for proof on things like clothing, which isn’t necessarily a monthly expense, but a “few times a year” kinda thing

Probably not but each district is different. In my district the Trustee have "guidelines" for the expenses. For example, clothing is something like $100 per month per person. They rarely, if ever, question expenses that are within those guidelines. They do want support for things like unusual monthly medicals or travel expenses. Even the food amount could be questioned if unusually high for a family of whatever size it is. The food issue, if high, could be attributable to required special needs. Expense that "I" do not allow would be a ridiculous amount for things like recreation and miscellaneous. I tell my clients that the bk court will expect some belt tightening when it comes to spending money at the expense of the creditors.

Des.

[Throwaway92]

Great thank you so much for the replies!

[justbroke]

Welcome to BKForum. I see that you are in good hands with Des.

[Barbisi]

Throwaway92,
We were told the same thing about our trustee- that he was easy going and not as harsh as "the other one" but he has followed our every move and tried to double our payment in Aug.2020; we were able to prove with a new I&J objection that our expenses had also increased since Feb. 2017 (when we filed). Although I reluctantly retired from any paying film, VO or commercial work opportunities and ongoing training (I no longer have an agent and will never attempt to get one as long as I have to continue living in Colorado), the lawyer always asks my husband ,"Is your wife working yet?" whenever the trustee "requests" to see yearly income tax filings and most recent pay stubs.
If you end up with our trustee, he will definitely set your payment very high, unless like us you have a very high mortgage ($2400 and rising every year) and incredible medical expenses (ours sometimes top $600 per month!) That has kept our payment below $1000 per month, but I fully expect him to try to raise the payment again this year if my husband receives another "market retention" raise in Sept. 2021 as he did last year.
Our BK13 "officially" ends in Feb.2022,and our plan is to sell our aging home and permanently leave Colorado, where we have lived a mostly dismal 11 years.
I understand your situation is very different, and you probably never want to relocate. But a BK13 is not going to be a "piece of cake" and a fun experience no matter how much you love your life in Colorado and I hope you have a lawyer better able to negotiate than ours was!
Best of luck on making it through what will be in any case a hard 5 years!

[justbroke]

I love how the Chapter 13 Trustees just insert the "why aren't they working" question. During my Chapter 13, I had a 20-something year old in college and living at home. The Chapter 13 Trustee asks, "so when is he going to be done?" I knew exactly what the Trustee was hinting at. I smirked and retorted... "we all want the answer to that question!" (The trustee then chuckled and backed off.)

[Barbisi]

You are so right, jb- they are always looking for some way to increase the payment!

[Throwaway92]

Barbisi thank you so much for sharing your story. I’m sorry that it has been so difficult dealing with the trustee. I can only hope that my situation goes as smoothly as possible. I will keep updating and asking questions as I go through the process!

[Barbisi]

Hi Throwaway92. Welcome to hell I mean... BK... just kidding LOL! I am Barbisi's partner in crime - the quiet guy who rarely speaks. Anyway. Couple questions, and couple thoughts. I scanned the topic so maybe some of these are already covered.

First off, and most importantly - breathe, brother - just breathe. You got this, and you will get through this.

1. have you filled out your I and J forms (income, and expenses)? If not, do it, before you meet with the attorney. Consider Every Single Expense - daily, weekly, monthly, quarterly, 4-monthly, annual. Write every one down. Medical, tax prep, trash, electric, water (all utilities) - you can get 12 month's worth, and average each one. These all go into the forms. Also - TV, cell phone, etc.

2. If you have not filed, and are considering enrolling in some form of rehabilitation for the compulsive gambling, make sure you have a copy of agreement to enroll, or some other documentation. If you do this, before you file, it *may* help your case. It may not matter, as well; but, if you can demonstrate a willingness and desire to reform, it may help.

3. For monthly household expenses such as: Food, Clothing, Vehicle Expenses (maintenance, gas...), hair care/cosmetics/personal care, child education expenses: Check the IRS website for the allowable expenses. You should be able to put these numbers down, as-is, on your I and J forms, since they are allowable expenses, versus combing through your monthly bank statements and deciphering all those expenses.

4. Automatic withdrawals from your bank account for bills - check for these; they can be easy to forget under duress such as when filing for BK.

5. Taxes - make sure you have your tax returns for the past few years available.

Basically, be sure you are intimately familiar with your financial situation - all income, all expenses. That way, when you speak with your attorney, and possibly the trustee, there won't be any guesswork.

You will go to an initial confirmation meeting thing; a 425, 6*6, whatever it is, I don't remember, and I really don't care <bla bla bla> but: you and your attorney have a quick convo with the trustee or their lawyer-associate. You probably will not meet the actual trustee. You are recorded on an mp3 recorder (not a tape recorder? So 1990s), answering some simple questions, and that's it.

In our case, we had an initial lower payment amount for about 4 months, before confirmation (you don't need to genuflect - Catholic joke but anyway). Then I got a call from the attorney, indicating the trustee agreed to a higher amount, but lower than the full amount requested. In other words, based on the evidence we provided for our financial/medical situation (bills, letters from physicians, etc. - this is why you need to be intimately familiar with your financial situation so you can defend yourself), the attorney and trustee negotiated a payment plan.

You and I are in the same income range, annually around 125K. I was initially earning about 96K when we started the BK, then got canned by Rathole I'm sorry I mean 'R', as Barbisi affectionately calls the company. Our payment is now around 900 + some change. Our initial debt load was under 110K. So considering you are in the same county as we are, with the same trustee, this may give you a barometer for predicting what your monthly payment may be. Each case is unique, however, so please that in mind as well.

We have 12 months remaining, then we are bailing Colorado, gettin outta Dodge by sundown.

Arighty, again, breathe, you'll get through this.

[Barbisi]

HaHa -the writing style is so not me LOL! I didn't catch it at first but as Zombie 13 states below, he accidentally posted while I was still logged in.

[alexdrake23]

ThrowAway,

I was in a similar situation as you - getting a huge variance on proposed payments from different attorneys. I would suggest completing the 22-C form and the Schedule I & J forms (as mentioned earlier). You can pretty much find a solid estimate between these forms. I got estimates from $1300-$5200, with the final proposed payment closer to $2k. Beware of some of the online calculators as they seem to be pretty high. Do your best to find a good attorney - as they will know where to push and where to retreat. They will be key in getting you a good payment number.

[flashoflight]

Before you get too far into "planning" your expenses, don't forget you cannot make up expenses out of thin air. You need to have actually incurred those expenses and have receipts to show if requested unless they are at or below the IRS amounts. To some extent, you may have incurred gambling expenses within your household budget beyond what you financed. You'll need to convert household income spent on gambling and other non-countable expenses excessive food from eating out to legit household expenses. The big categories are financed cars, home maintenance, dental, medical, charitable contributions up to 15% of income, and a reasonable amount towards retirement.

I wonder about the $58k car. If you bought it recently, that screams bad faith filing. If it is a high monthly payment, it may be objectionable as well.

I think you should wait a few months to file and start spending like your post-BK budget to generate receipts for the trustee. You'll need to stop making minimums and use that money to pay for countable expenses. The delay in filing BK will also help make sure your recent gambling debt is dischargeable.

At the same time, you need to deal with the gambling addiction and the trustee might want documentation that you're dealing with the addiction such as self exclusion letters and documentation from rehab. There will be no room in your budget for even a single trip to the casinos or online betting. It will be very tight in the beginning.

Pick the best attorney you can find who has done lots of 13s and knows the chapter 13 trustees well. Don't worry too much about attorney cost. You will likely be financing part of the legal fees anyway and those fees are usually partially subsidized by your unsecured creditors.

[Scottowl]

ThrowAway, I am in the same leaking boat as you when it comes to gambling addiction. I thought, going into Ch 13, that I had a good plan to keep it at bay. I had two counselors and my physician on my team. I was determined to not let gambling back in.

A little over a year into my plan I had a little windfall of someone repaying an old debt of $150. I decided to pay a visit to the casino, where I won a little bit more $. As any gambling addict knows, the only thing worse than losing is winning.

For me, it opened Pandora's Box back up. I no longer have a little cushion saved up. All considered, I got off easy, only because I can't access credit or retirement funds.

I do have the 'dragon' silenced once more, but am aware and concerned what could happen once I rebuild that cushion I was talking about. There is only one way to stop gambling, but so many triggers to start up.


When I entered into the agreement 16 months ago I did not consider that 5 years is a long time. I was more worried about getting to the next day. When they tell me no gambling, it really does mean no gambling. To most people that is not a big deal. To me, it is more than a big deal. I still can't say I can stay clean for 3.5 years.

I hope you don't think I'm trying to give advice, as I am the last person here qualified to do so. This is just a method for me to help myself stay away from gambling, and you are the one doing me the favor of listening.

[Zombie13]

Hi everybody; just a note - Zombie13 here (Barbisi's husband)... I thought I was logged in as me when I typed my post; snippet is below. Unfortunately I forgot to login, and posted as Barbisi. Apologies for that! I rarely post so apparently I forgot the 'login' part, and just started typing, while logged in as Barbisi. Anyway.

Hi Throwaway92. Welcome to hell I mean... BK... just kidding LOL! I am Barbisi's partner in crime - the quiet guy who rarely speaks. Anyway. Couple questions, and couple thoughts. I scanned the topic so maybe some of these are already covered.

First off, and most importantly - breathe, brother - just breathe. You got this, and you will get through this.

Arighty, again, breathe, you'll get through this.