Emergencies during the plan?

[toomuch]

I am getting ready to read the Tactical BK Manual and have been reading this forum since before Christmas.
When you file for Chapter 13, do they not cut you any slack for auto repairs, home repairs, emergencies, etc..???? Is that up to the trustee? I mean, we can't predict the future. Is this where the money under the mattress comes in??

Toomuch

[CATCHMEIFYOUCAN]

When you prepare your files, you list all expenses including auto repairs, home repairs etc. Include every cent you can think right down to your underwear/shoes you would buy over a period of a year (anything and everything to eat up any disposable income you will have left to pay back the creditors. YES underwear (would be in the category of "clothing," as a reasonable/necessary expense!) Others will chime in here to add to this.

Best wishes, Catchmeifyoucan

[toomuch]

When you prepare your files, you list all expenses including auto repairs, home repairs etc. Include every cent you can think right down to your underwear/shoes you would buy over a period of a year (anything and everything to eat up any disposable income you will have left to pay back the creditors. YES underwear (would be in the category of "clothing," as a reasonable/necessary expense!) Others will chime in here to add to this.

Best wishes, Catchmeifyoucan

How do we know what repairs will be necessary? How do we justify "what if this or that happens?"

Thanks,
Toomuch

[CATCHMEIFYOUCAN]

You don't know what will happen and the only way you can prepare for unexpected expenses is by learning to budget, save so much aside for "emergencies," every pay period and if it gets to the point where it is overwhelming than it must be communicated between your lawyer and the trustee. You definitely dont want to miss a payment with the trustee.

Best Wishes, Catchmeifyoucan

[aa06a47]

toomuch, there is really no good answer. Try and pad your expenses as much as possible and save any leftover money for those unexpected expenses. Most trustee's don't cut too much slack after plan confirmation. Best thing is to be as frugal as possible until you get a little nest egg built up. And yes, you can put it in a savings account and the trustee won't get it.

I wish I had a good answer for you, but I don't.

[bowlingmt]

In our plan, we budgeted $1000/year for home repair, $1000 for auto, $1500 for medical and dental expenses, plus money for those quarterly expenses, annual expenses (for us, we have big life insurance bills due right at Christmas - ugh!) We just listed these and divided by 12 or 4 or whatever to come up with our monthly budget. Trustee did not bat an eye on any of these.

Then, we set up an ING account, where we deposit these monthly amounts. It is very comforting to us to have a few thousand dollars in the bank now to help cover any emergencies that come up.

[toomuch]

In our plan, we budgeted $1000/year for home repair, $1000 for auto, $1500 for medical and dental expenses, plus money for those quarterly expenses, annual expenses (for us, we have big life insurance bills due right at Christmas - ugh!) We just listed these and divided by 12 or 4 or whatever to come up with our monthly budget. Trustee did not bat an eye on any of these.

Then, we set up an ING account, where we deposit these monthly amounts. It is very comforting to us to have a few thousand dollars in the bank now to help cover any emergencies that come up.

Does the trustee know you have this account and have allowed the money to be put in it each month? I was under the impression they do not allow for savings, that every extra cent you have goes to them/creditor.

Thanks,

Toomuch

[SinkingFast]

Does the trustee know you have this account and have allowed the money to be put in it each month? I was under the impression they do not allow for savings, that every extra cent you have goes to them/creditor.

Thanks,

Toomuch

When you fill out Schedule J, you allow on a monthly basis for expenses that occur occassionally or once or twice a year.

Like auto insurance payments. We pay twice a year, but we still have to set that money aside every month to be ready when the bill comes. Same thing with auto repairs. Those happen whenever, but you have to have money set aside for when they do arise.

Some people here use the "Envelope System". Every paycheck, they put so much $$$'s in each envelope for different expenses. Having the ING acct is the same thing as the envelopes. Setting aside monies for when expected and unexpected expenses arise.

[bowlingmt]

He didn't ask :-) It is not a ton of money, but money that we budgeted for in our plan and was approved by the trustee and hopefully by the judge in 2 weeks. Our lawyer was the one who recommended an account to hold this money in, instead of letting it get frittered away in our checking account.

[aa06a47]

Does the trustee know you have this account and have allowed the money to be put in it each month? I was under the impression they do not allow for savings, that every extra cent you have goes to them/creditor.

Thanks,

Toomuch

Yes, you are allowed to save money. There is nothing in the rules that state you are not allowed to save money. As long as your plan is confirmed, your pretty much under the radar and done with, except for making the monthly payments.

[$$only4ever]

Yes, you are allowed to save money. There is nothing in the rules that state you are not allowed to save money. As long as your plan is confirmed, your pretty much under the radar and done with, except for making the monthly payments.

aa06a47 is absolutely correct. We have been in a Chapter 13 for the past 19 months. As long as you are making your monthly payments on time, the trustee never bothers you. We have had a savings account for the whole time, just in case of emergencies.

[CATCHMEIFYOUCAN]

Whats an ING account ? Where does one get one ? I just started a savings account with EMIGRANT.

Thanks, Catchmeifyoucan

[SinkingFast]

It's an online bank for savings. They pay much better interest than you'll find in local banks.

http://www.ingdirect.com/osa_google/

They are in several different countries, but the US accts are FDIC insured.

[dac67]

Tell you what , I wish I had known of this before. When we filled out our schedule, I was only making 68 dollars a week at the time and my hub was making the money. We thought it was in our benefit, cause they figured as only having 160.00 left over a month, well we fell way behind on alot of things like car payments and utilities. They had to cut alot of areas just so they could come up with the 160.00 payment.
It created a big mess for us. So I have taken on other jobs and we did disclose this to our lawyer and he said we will have to amend our plan in case the trustee audits us. Personally let him. We have done nothing but pay bills to keep our heads afloat.
They allowed us a family of 4, 120.00 a week for groceries. We had two vehicles, one a truck and allowed us only 240.00 a month for gas. no money for pet food, and nothing for staple items like, shampoo, laundry detergent, toilet paper etc. What we call our Walmart run. So the 120.00 had to include everything from food, to pets ,to non food items. Well all this just throw our budget right out the window. Honestly we didn't buy our daughter a birthday gift cause it just wasn't there. Thank God for relatives, she didn't really notice. We had no vacation this year, we couldn't take our kids on any day trips cause there wasn't ANY extra money. Plus I had a surgery, my son started a med for his ADHD, which was the best thing that could of happened for him and us, we did some counseling, all this was unexpected and left us floundering only getting deeper behind. I felt just as helpless as I was before we filed. So I took on the other jobs and it wasn't until Nov. that we had a light starting to shine. We are only now after Christmas even able to think of putting money away. We only bought for the kids, my hub and I didn't buy for one another. It has been 10 months since we filed. We lost a car and now are trying to obtain a second one.
We have always put our trustees payment as top priority, I would never not pay that, it goes out on time each month and we have never been late or missed a payment.
So you have to beable to pad everything really well or it MAJORLY sucks when that first unexpected event happens.
Our lawyer never guided us properly. I wish then he would have said , you need to make more money so we can pad you in some areas, or at least give you the alotted amount allowable by law, but instead they had to cut our budget and lefty us with nothing.

[aa06a47]

dac67, not sure if you have to send in your tax returns, but it may show a higher income which might trigger an audit.? I wouldn't worry if it is not a large amount...say 10% more total income than when you filed, but you never know. If there anyway you can get paid in cash for your part time jobs?

In the mean time, do what you need to do to survive and pay bills. Sounds like you got raked over the coals by not only your attorney for submitting a plan that wouldn't allow you adequate money to survive. I know chapter 13 isn't suppose to be a picnic, but there is nothing that says your required to live in poverty.