Successful meeting with second attorney but still have ??????

[drowninginflori]

My spouse and I met with a second attorney today who we really liked. He actually took the time to talk to us and explain the process. We knew going into the meeting that we would have to file a chapter 13 (we make to much combined). His fee was 3K less than the first attorney that we met with. He said that as soon as we have retained him (minimum fee of $300) he would go ahead and start fielding the creditor calls that plague us night and day. We plan to pay him in full on the 17th of June and get the ball rolling.

One thing he was unable to answer was what our plan amount will be each month. The first attorney expected it to be around $1100 but that was an estimate. Our unsecured credit card and personal loan debt (not including cars) is a little over 50K. We do not own a home or have any assets and we plan to pay our car loans ($1100 for both) and student loans ($500) outside of the plan. We net about $5600 a month combined. Can anyone tell me if they think the $1100 amount is true or do you think we should expect to pay more. I know each case is different but we need to know what to plan for. Thanks!

[epiphany]

My spouse and I met with a second attorney today who we really liked. He actually took the time to talk to us and explain the process. We knew going into the meeting that we would have to file a chapter 13 (we make to much combined). His fee was 3K less than the first attorney that we met with. He said that as soon as we have retained him (minimum fee of $300) he would go ahead and start fielding the creditor calls that plague us night and day. We plan to pay him in full on the 17th of June and get the ball rolling.

One thing he was unable to answer was what our plan amount will be each month. The first attorney expected it to be around $1100 but that was an estimate. Our unsecured credit card and personal loan debt (not including cars) is a little over 50K. We do not own a home or have any assets and we plan to pay our car loans ($1100 for both) and student loans ($500) outside of the plan. We net about $5600 a month combined. Can anyone tell me if they think the $1100 amount is true or do you think we should expect to pay more. I know each case is different but we need to know what to plan for. Thanks!

Hi. Glad you found an attorney that you like and that will field phone calls...that's so important. I don't think anyone at this point will be able to tell ballpark what your payment may be without knowing what your allowable expenses are and that they are accepted as concrete by the trustee. It all depends on what your disposable income per month is deemed to be and without more information, it really can't be figured.

Good luck to you,
ep

[jwbbx]

drowninginflori,

Glad you found an attorney you like, but if you can I'd suggest you get him the $300 right now so you can start referring creditors. Believe me, they take a while to fall off. US Bank has called me 5 times since I gave them lawyer info, their autodialers (eg "Please wait for an important message from XXX") don't seem to get updated too fast.

I have another take on the budget thing. Be happy that he didn't give you a quick off the cuff estimate. This is something that takes time, and should not be done based on a casual "How much do you think you spend on XX" conversation.

Remember that the plan lasts 5 years. There are things in that 5 years that you can anticipate now but wouldn't think of as current expenses. For instance, I wear glasses and for the past 20 years have needed new lenses every 2 years. My lenses are expensive - 200 each so that's 400 TWICE over 5 years that I've included in my budgeting. Granted it's taken as a monthly amount over that time, but this stuff adds up. I also wear dentures, the normal life for them is 3 years - mine are a year old. I will need them before the plan is over; my portion of that is another 800. Those are the kind of things that need contemplation. They are legitimate verifiable expenses and need to be taken into account so that you're not blindsided later with no funds for contingencies.

I firmly believe that one of the reasons people wind up with crappy budgets with no room for contingencies is they are forced to quickly give answers to BK mill attorneys who are not interested in the long term viability of the plan. DON'T be rushed into this - I'm still thinking of little things and gave my attorney the initial cut a month ago. Retain your attorney quickly so HE/SHE can field the crap while you concentrate on this stuff. Constantly fielding creditor calls gives you a sense of urgency to make them stop, just don't do that at the expense of taking the necessary time to give your counsel a real and accurate (not guesstimate) picture of your situation.

I'm not saying you can declare anything you dream of, but as in the examples I give above these are legitimate expenses that should be accounted for. It's just that many times we don't take them into account that way. I know in my case this type of thing was always a 'Charge It' type item, so I never thought about them as part of a budget until my attorney pointed some of them out.

Take this time you have to consider what will happen over the next 5 years. Consider things like "we've been putting off getting a new water heater to pay bills, but we really will need one"; etc. Tell your attorney these things and work on getting a viable plan.

I've been trying to think of a 5 year PLAN, rather than a monthly budget.

Hope this helps....

[Dennis1971]

Can somebody explain how the payments work in a chapter 13? I'm not being nosy here, but if they had $50,000+ in unsecured cc and personal loans then how can there be a payment off $1100 for 5 years? That comes up to $66,000 dollars! Does all the debt have to be paid back in a 13 or do you get to write some of it off? Or is better to go ahead and do a 13 since all interest stops accruing on it?
Thanks Dennis

[jwbbx]

Dennis1971,
You should consider starting a new thread for this, you'll get more responses and not hijack (not meant as bad, just can't think of another word) this thread for another topic.

[Dennis1971]

I don't see this as hi-jacking at all, I was wandering about their payment and amounts in their bk.

[MomIcantFindmy]

Congo Rats on finding the attorney you like!! ;) Good luck and keep us posted!!!

[drowninginflori]

Dennis, I was not sure about that $1100 amount either since we do not owe 60K+ and that amount might have been an estimate. I know they add a couple of fees into the amount but they were not excessive. The lawyer said that he believed that we would be in a 100% payback plan in the beginning and that it might change later in the payment plan say when my spouse retires from the military or if our job status changes.

I have thought about going ahead and paying the $300 to retain but I am prepared to pay the entire fee on the 17th which is only a little over a week away. The most important things he did tell me that was a relief was that the lump sum pay that I will recieve for my job (teacher-get five paychecks in a row paid mid-month and paychecks do not start again until September) can be exempt. He said just set that aside in a seperate account and show proof that we are moving it over on what would have been my normal payday each month and he said it should be able to be exempt.

[drowninginflori]

Also wanted to ask about this...Attorney said that as soon as we have a plan in place we will start paying the agreed upon amount within 30 days even if this is before the 341..Is that what normally happens...this is all new to me so just wanted to know what has happened to others going through the same thing.

[Dennis1971]

Well so far we have had two consultations with our attorney, he mentioned he didn't think we would have any problem going with a 7, but they wouldn't know for sure until we came in and set down and filled all the forms out. I know I'm probably too paranoid, I check this site like 6 times a day! It just freaks me out to think we could file bk and destroy our credit, then have to pay back the whole amount, and not have the CC's to fall back on.
Thanks Dennis

[drowninginflori]

We are not happy about what it is going to do to our credit either but right now we are getting nowhere trying to pay the minimums on our current debt. Our original debt was about 38K and is now up to the 50K mark because of interest rates that went dramatically up, a few late payments, and a couple of over the limit fees. We definitely did not plan for 2007 to happen the way it did but between three military moves in less than 15 months, family illness, and loss of income it just happened. We hope that the amount that we are assigned will be less than the amount we already pay each month which runs around 1900-2300 a month.

[Dennis1971]

We have a little over $65,000 in unsecured debt. Some of it was for medical bills, my wife and I have both had our income diminish the past couple years. I have personally lost about $20,000 a year due to a sluggish economy. We just kept trying to hang in there thinking that we could eventually catch up. We have been using the CC's for groceries and gas and everything else.
Now we've come to realize it ain't gonna happen and we have no choice.
Were paying now over $1600 a month to CC's, it just scares me to death to think about having that kind of payment after we file the bk. At least now we have the CC's to fall back on in an emergency, neither of us have any family still living to fall back on.
I'm surprised your attorney is that expensive, we tried several different ones here in Indiana. They were around $1400 for a chapter 7 and somewhere around $3000 for a chapter 13. They all said that these prices were set by the state or somebody ( I don't remember). I believe this is true, the prices were the same from the really fancy law offices to the no-name new guy down the street. Good Luck!
Dennis

[rrockinggramma]

figuring out a payment in a chapter 13 is contingent on your own personal circumstances that there isn't a cut and dried answer. Basically it is what yo have left over after you pay for all of your necessities. If it happens that few claims are filed (which ususally is the case) then you could end up paying back 100 percent. But only for those claims filed. All other debt at the end of the plan would be discharged.

[Dennis1971]

If it happens that few claims are filed (which ususally is the case) then you could end up paying back 100 percent. But only for those claims filed. All other debt at the end of the plan would be discharged.

This is the scary part! We have one creditor (BOA) that we have a $30,000 unsecured consolidation loan with, can they throw a fit and us have to pay them back 100%. For what reasons can they object? And how often do they object? When they object do they normally win?
Thanks Dennis

[chloe0724]

Dennis,

You are where I was several months ago. It is very stressful. You will not be paying what your current monthly minimums as part of your payment plan because you truly haven't been living within your means. That's why the 13 plan is so important in being legit. It has to be an actual reflection of your month income and expenses. It's hard to figure that out in the beginning because like many of the rest of us, you have been living on the cards.

Good luck to you