Somebody tell me where my thinking is wrong

[Granny]

As you know, we are under the median income, and Sch I & J were wrong, but nobody has even mentioned those again. Sch J didn't allow us enough for food, nothing for clothing, not enough for utilities etc.

So now attorney #2's paralegal is working on an amended plan and she has it set up to pay the unsecured 14%.

My thoughts are, I should be allowed an amount at least equal what my actual expenses are before the unsecured get anything. My actual expenses are below the IRS standards. If I were given the amount for the standards, I would consider it a raise in my standard of living.

Where is my thinking wrong here...should the unsecured get anything and force me to live with $275 for groceries for a family of 5 and let these babies go to school without uniforms and shoes?

[SinkingFast]

If you're below the Median,............. I don't understand why you have to pay anything to Unsecureds.

I've actually seen a Ch 13 Plan filed and Confirmed, on PACER like that.

Filers below the Median. The people were in arrears on their home, a car, and owed back taxes. Not one penny was designated to their Unsecureds. 100% paid the attny and Trustee's fees, Secureds and Priority payments.

Since you're playing "catch up" you might have to pay Unsecureds something. ie,....... You've already filed with one attny originally. Now you're working with a new attny. If you paid nothing to Unsecureds it might not look right to the Court. But seems like your new attny could get you more money in your monthly budget so you can at least live.

[tay666]

Is it possible that the part about "getting at least as much for the creditors as they would have gotten in a chapter 7" is what is causing the high payback amount?

[Granny]

Is it possible that the part about "getting at least as much for the creditors as they would have gotten in a chapter 7" is what is causing the high payback amount?

I believe all my assets are exempt if I filed a Chapter 7. I am in the generous state of Texas and all I have is my home, two vehicles with 2 drivers and personal/household stuff. No money, no savings. The trucking company is a corporation and the only asset is included and being paid back at 100% plus an additional 1/3 of the value in interest.

Honestly, I think the paralegal is just not working hard enough to get the payment as low as she can. What happens if I go over her head to the attorney and ask him why the payments did go down as much as he initially indicated that they would?

BTW, I have downloaded "Best Case" which is software that is used by the attorney's and can be run in demo mode for free, and that's how I know she is allowing 14% to the unsecureds.

[SinkingFast]

Our paralegal handled entering data and information, but the ultimate call was our Attny's. He's the one that ran our final Schedule J. Double checked our file. Made sure every I was dotted and every T was crossed.

I wouldn't have a problem at all side stepping the paralegal and chatting directly with the attny. It's his/her job to make sure the Plan is submitted correctly anyway.

[aa06a47]

It is tough when your not represented by an attorney that you feel is fighting for you. Chapter 13 is a belt tightening experience, you cannot expect to live as you did prior to filing. However, it wasn't designed such that you cannot put food and provide clothing for you and your family.

One of the things you might look at is your misc expenses. Sometimes, when you have a large number of misc expenses, the trustee lets it fly, but only with reductions in other expenses.

Good luck and I hope your new attorney comes up with a good plan you can live on.

[Granny]

One of the things you might look at is your misc expenses. Sometimes, when you have a large number of misc expenses, the trustee lets it fly, but only with reductions in other expenses.

We don't have misc expenses in our plan. In fact, let me state outright what is in our plan:

Mortgage $898
Utilities $259--Understated by 208 per month
Home Maintenance $25--Understated by 50 per month, rural property, must maintain own well and septic
Food $275--for a family of 5, yea right!!!
Medical $95--understated by 50 and that doesn't include $200 Rx hubby needs but can't afford, not avail with any discount card
Transportation $141 and that was before the cost of gasoline went up again and no thing for maintenance
Life Ins $141--term life only, two small kids to support
Auto Ins $110
Taxes $40--not sure where he got this figure, but it is extra for me
Child Care $115
Auto Payment $398--this is now paid off so I can apply it to the shortages above, but it's still not enough.

Nothing for clothing, nothing for entertainment, nothing for misc and not enough for some of the basic necessities, such as food, electric and gasoline. We aren't served by public transportation, so a car is a necessity.

Yes, it is true I choose to live outside the city limits, but it would cost more to live in the city and we are not as safe. That is important considering the fact that my husband was only home 36 days last year. And my total housing expenses are still below the standard for our area.

This plan leaves nothing for the credit cards my hubby still has, since I filed alone, he still has to pay his (which can be used for a medical emergency).

See there are no frills in this budget, so why should the unsecured get anything?

[aa06a47]

I see what you mean, but there are other things which you may have discussed previous that I cannot recall which may be the reason for your reductions.

When you filed, did they use your husbands income or any of the income of the other members of your family in the calculation of disposible income? Your allowed expenses may be in line if this is true, unless you are the only person in the family making an income. See, your exemptions, plus your husbands income probably make the difference up in the courts eye. You were not filing as a family of 5, but filed alone with other income the court used to make the determination of disposible income.

[aa06a47]

See there are no frills in this budget, so why should the unsecured get anything?

The bankruptcy laws provide a fresh start, though a chapter 13 is a delayed fresh start. According to the law, the unsecured should get something if there is disposible income to give them something. Don't let it eat you up.

I ask you to look at what your life was before the Chapter 13. You seem to have alot of anger and I just ask you to look back and look forward, which picture seems best. This 5 year ride is tough, but at the end of it is debt free.

[Granny]

I had a nice long reply that got lost before it posted.

You are right, I am angry, most of it is justified, and there is nothing I can do anything about any of it.

I'm in this mess, I'm stuck in this mess, and I will die in this mess.

All I can do at this point is pray for Divine Intervention.

[aa06a47]

I had a nice long reply that got lost before it posted.

You are right, I am angry, most of it is justified, and there is nothing I can do anything about any of it.

I'm in this mess, I'm stuck in this mess, and I will die in this mess.

All I can do at this point is pray for Divine Intervention.

Granny, one of the great things you have going is the umbrella of the bankruptcy code. That in its way is the earthly definition of a divine intervention.

Your getting hung up on the small things....like how much interest the auto finance company will get. What you need to fix your mind to is how much you can afford to pay the trustee per month and make sure the attorney gets you as close to that figure as he/she can. The monthly payment is the most important aspect of your chapter 13.....not who gets the money you send each month.

If this makes you feel better, the truck payment would either go to pay the truck or pay the unsecured creditors. You already stated you could no longer afford the large truck payment, but chose to keep the truck, and then complain about the refinancing terms? The payment to the trustee would not change either way because the payment is based on disposible income.

Take gas receipts, utility receipts, whatever type of receipt you can come up with and take to your attorney and help straighten up the figures your first attorney came up with.

You want a Chapter 7, like most all of us Chapter 13'ers. Given in a previous post you filed to save a forclosure, it appears you need a 13 to catch up.

Given a source of your income is from use of a vehical, I assume your self employeed and that has got to make things more difficult without a steady income.

Reading through your case is a little confusing. You have a corporation, but pay the taxes for the corporation from you own income, ect. Side corporations is well beyond the scope of my knowledge of bankruptcy. There seems to be a piece of the puzzle I'm missing....so excuse my state of confusion.

[Granny]

Granny, one of the great things you have going is the umbrella of the bankruptcy code. That in its way is the earthly definition of a divine intervention.

I need Divine Intervention to make these payments and to buy groceries.

Your getting hung up on the small things....like how much interest the auto finance company will get. What you need to fix your mind to is how much you can afford to pay the trustee per month and make sure the attorney gets you as close to that figure as he/she can. The monthly payment is the most important aspect of your chapter 13.....not who gets the money you send each month.

No, if the payment were smaller, I could afford to buy groceries. Apparently, we have about 700 going to unsecured and that's because the full amount of the last payment is not needed for anything else.

If this makes you feel better, the truck payment would either go to pay the truck or pay the unsecured creditors. You already stated you could no longer afford the large truck payment, but chose to keep the truck, and then complain about the refinancing terms? The payment to the trustee would not change either way because the payment is based on disposible income.

I couldn't afford the truck payment and the credit card payments. But I could afford the truck payment. If I hadn't included it in the BK, I would have made it about 1 week late but would have been ok.

Take gas receipts, utility receipts, whatever type of receipt you can come up with and take to your attorney and help straighten up the figures your first attorney came up with.

You want a Chapter 7, like most all of us Chapter 13'ers. Given in a previous post you filed to save a forclosure, it appears you need a 13 to catch up.

Given a source of your income is from use of a vehical, I assume your self employeed and that has got to make things more difficult without a steady income.

Reading through your case is a little confusing. You have a corporation, but pay the taxes for the corporation from you own income, ect. Side corporations is well beyond the scope of my knowledge of bankruptcy. There seems to be a piece of the puzzle I'm missing....so excuse my state of confusion.

The corporate funds are totally seperate from our personal funds. Except attorney #1 convinced me I could save money by including the truck and since I had personally guaranteed the note, I included it on my BK. If I draw extra money from the corp., it increases my income. It is complicated. The tax issue is this: If the corp doesn't pays it's payroll taxes, Uncle Sam looks to the officers of the corp to pay those taxes in the form of Trust Fund Taxes, and those are never dischargable.

Attorney #2 has never examined my personal expenses, and maybe that is what is bothering me so much....they are only concerned with the payment and not making sure I have enough disposible income to live. Sad thing is I have every receipt for every expense going back 15 years, all neatly sorted, filed and stashed in the attic. I'm probably the only person here who could validate all my expenses, and it doesn't seem to matter.

[emoney]

Who said attorneys are accountants??? Under the new BK code they need to be.
Do you own any of the stock in the corportation as that is an asset that you may have to turn over to the trustee.
emoney

[aa06a47]

Make an appointment with your attorney to review your case. Tell him / her that you want to go over the expense side of the equation. Some attorneys are interested in only getting a confirmed plan, not necessarily one that works toward the best interest of there client.

Your corporation kinda bothers me. Sounds like you have the option of taking out more money to support your needs if you chose to???? Yes, it would increase your income and provide more disposible income. I'm all for sheltering whatever income you can, but this may be a bullet your attorneys are trying to dodge. Don't get me wrong here, but on the surface from what you have said, there are some things starting to smell (including the corp truck in the personal bk for instance and including the corporate tax stuff) , but that is probably because I don't have the entire story or understand corporate laws.

[Granny]

Make an appointment with your attorney to review your case. Tell him / her that you want to go over the expense side of the equation. Some attorneys are interested in only getting a confirmed plan, not necessarily one that works toward the best interest of there client.

And I think that is part of the problem here, they haven't even discussed that side of the equation and they are only looking at the payment part of it. But I have other concerns that I will address below.

Sounds like you have the option of taking out more money to support your needs if you chose to???? Yes, it would increase your income and provide more disposible income. I'm all for sheltering whatever income you can, but this may be a bullet your attorneys are trying to dodge. Don't get me wrong here, but on the surface from what you have said, there are some things starting to smell (including the corp truck in the personal bk for instance and including the corporate tax stuff) , but that is probably because I don't have the entire story or understand corporate laws.

I'm not sure why it smells to you and I would be delighted to discuss that in personal emails.

Yes, I could increase the payroll to cover the payment, but then I increase the payroll taxes unnecessarily and increase my personal taxes unnecessarily as well. And I am VERY afraid that if I increase our income to make up for the household expenses that have been cut that I will be stuck with the budget attorney #1 devised and that they will ask for extra payments that would go to the unsecured and I still wouldn't have a budget that is liveable.

When I first posted this question, the paralegal had told me there was money going to the unsecured and that's where I balked. I ran some numbers over the weekend and now I am almost ok with the increased interest, because afterall, I won't be paying the unsecured much and in the end I do save some money with the whole process, it's just not as much as I was lead to believe. And I was lead to believe that because we were under the state median, this would be a 36 month process and now it is 60 months.

I don't think the attorney is trying to dodge any bullets because he has never questioned anything about the corp. But I do feel that he is dodging me.

I would really like to discuss this further in private if you want.

Granny