Freaking out a little....ok A LOT!

[Chris66]

Had my first meeting with a lawyer today. I was hoping to be able to file Chapter 7, but he says I earn too much to do that. I'm divorced with no dependents but a crap ton of debt - $86K unsecured/$25K IRS/$55K student loan. I don't own anything except my 2007 Toyota that's on her last tire. I'm completely panicked that I won't be able to live when they decide what my payments will be. Without a credit card at all, I will need some way to pay for emergencies (medical & car repair), how do you do that if you pay all your disposable income to the trustee?

Before I met with the lawyer, I had come to the hard choice to file. My choices were file or run in front of a truck. But how do you survive a Chapter 13 by yourself? I have no one to help me out if there is an emergency. I knew my student loan couldn't be included but how on earth am I supposed to pay back over $100k in 5 years? On paper it might look like I have $1500 of "disposable" income every month, but I don't. I don't know where on earth they get that I can buy groceries now for anything less thank $150 a week, prices are insane!

How do you guys get thru this? What can I do? I just want the light at the end of the tunnel to not be a train

[shipo]

Okay, I was roughly in your same boat back in 2015 when I filed; all I owned was a 14 year old car, which was in pretty good shape. My attorney told me to run right out and buy a new car and get an extended maintenance plan on it and finance the plan as well. I felt this wasn't ethical and opted to try and soldier on with my car; bad move, the car ended up needing thousands of maintenance during my Chapter 13 and in the end, I needed to cobble together enough money to buy something new(er) during my fourth year.

Long story short, buy a new car; the money to pay for it will be included in your Chapter 13 and will receive priority treatment as a Secured Debt. The cool thing about going this route is you'll come out of your Chapter 13 with a fully paid off car as an asset. I sure wish I'd been smart enough to take my lawyer's advice and done something like, buy a strippo Toyota Corolla instead of trying to keep an old Honda Accord running.

[Chris66]

Really,??? I can't imagine anyone giving me a car loan right now

[Clay3007]

I also felt the same way going in to bk and actually did not want to file but you don’t always pay back 100% of the unsecured amount. I’m actually only going to be paying back hopefully 5% or lower of all my unsecured. I also went in to bk with a rusty 2002 cavalier that u wish I would have gotten something else before hand. My only saving grace is I’m a mechanic so I keep fresh bandaids on it lol. But we did buy a newer used traverse for our family car before we filed and that cut a lot of the amount out that we have to pay to the unsecured.
just breath and relax, as far as the emergenys go… yes at first there is nothing but sit down and make a budget and save everything u can for along time until u feel u have a comfortable stash and then sit on it, don’t use it for anything unless you absolutely have to.

[Chris66]

Thanks Clay, I'm not sure anyone would give me a loan for a car right now.

[shipo]

Thanks Clay, I'm not sure anyone would give me a loan for a car right now.

Talk to an attorney, they should be aware of dealerships in your area willing to work with you.

[flashoflight]

Make sure you have your tax withholdings correct. Don't know how you ended up with IRS debt, but no more borrowing from the IRS to pay the groceries or the trustee. That should reduce your disposable income by quite a bit.

As long as you get annual raises at work, you will eventually be able to save up. First year you might run out and have to skip a meal or two until the next paycheck comes. You pay the trustee before you eat.

You submit your court budget with all expenses that you can get past the trustee. For example, my dog's vet bill and food were instrumental in reducing my disposable. After confirmation, you make a thousand cuts in your budget to build that cushion.

[Zombie13]

If you can get a car, do it. If not, fix as you go, prioritize repairs, find coupons, look for neighborhood mechanics on NextDoor, etc.
Barbisi has a gene (DNA) apparently that finds ways to save significant money on groceries and everything else; definitely engage with her, on here. Alongside her, I learned to look for deals. Also, the trustee might ask for tax returns to see if you have increased income year over year. 10% more from when you filed, is the general rule to trigger a request for payment increase. So if in year 3 your income has increased by 10% over date of filing, they may get interested. In our case, it was abundantly obvious the trustee had a case since our income increased by 20% I think.
Before you file: understand the I and J forms, find everything you can claim, and defend, as an ongoing expense. Have documentation, know your explanations/defense, and explain/protest to your attorney; this is your one shot to negotiate.
After you file: there will be a few, or many, months of waiting: just pay your bill. You might have to pay more than the original bid.
Find ways to save money, and yes, increase income. I saw it as a challenge. We increased income with a side hustle, and the day job, and nothin happened til the 20% increase. But that was a delayed increase: job layoff (severance) plus new job (more $$), followed by off-season increases, pay raises, etc.
Long story short: it is of low probability your payment will increase, unless your income increases considerably. And again, I say, do it. Work hard, make more money, improve your life.
We are out of the 5 year debacle; for us it sucked, though we found ways and opportunities daily to save money. Now though our income is about double what it was <muwhahahaha!> though, we fought for it with a vengeance. Envisioned our future daily, made it happen, left the state, sold our house, got another job (left a great job <after the crappy, dead, roadkill job>, for a greater job). Repeat...
You can do this.