Chapter 13 expenses

[ska]

[optimistic1]

According to the new BK laws, yes the 401k contributions are in fact allowed. If your means test disposable income shows $200-300, you will be in a Ch.13. Low repayment plans are based on several factors, amount of debt, mortgage arrears, secured vs. unsecured, attorney fees, etc. If you can accurately list everything, then someone on here might be able to tell you more, but only a attorney can really give the best picture. When you hear of $0 payment cases, that means its $0 payment to unsecured credit cards. I am fairly certain you cannot be in a Ch.13 with absolutely nothing going out, it just doesnt make sense. It is wise to wait until you see declines in your income levels, that is the basis of the Means test, a 6 month look back and averaging. However, when you have your attorney fill out your schedule J, you will need to show you dont have enough money in your future expenses as well. I have read several people that file for a 7, qualify on the means test, but on their expense schedule J, the trustee sees that they actually will have money, enough money to pay into a 13, and they are forced to then file the 13 anyway.

[BigJohn]

If you stop going to school and if you have student loans, you will have to start paying them back.
I think more thought has to be given to this matter.

[liz417]

I feel like I am in limbo between chapter 7 and 13. We are over the median by about 35K. However, with our mortgages and expenses we would pass the means test. The problem is we had to turn in our leased vehicle early because it required major work ($2,500) that we couldn’t afford. We knew we couldn’t purchase the vehicle due to poor credit come March when the lease is up. So, there went a pretty good size expense, but my attorney didn’t think we could have counted it in the beginning anyway due to the end of the lease being so close to filing. Without the car expense I am very afraid we will not pass the means test. We will have a better chance at qualifying if we can get the BK discharged. I have already spoken with a couple of companies. We are prolonging our filing because my husband’s income is declining. He is in sales and it is always a little slower at this time of the year. Is it possible to purchase a good used car right now? How's your credit? It wise that you wait until your hubby's pay reflects the decline.

I am very worried about settling for a chapter 13. My attorney said that I would probably have to stop attending school because the trustee would frown at the money used to pay for school that could be contributed to a chapter 13 repayment plan. I do not pay at this time, I have loans. I only have one more year of school left before I earn my degree and will get a promotion at work. I will be devastated if I cannot finish school. Although I think it's crazy to hold someone back who is trying to better themself, I've heard that Trustees want ALL disposable income to go to the plan. Your Trustee may even see that you will have the ability to make more $$ in the near future and try to push you into a ch 13. You really need to focus on a ch 7 and be done with it.

My attorney told me that if I get pushed into 13, there are other expenses aside from those on the means test that are allowed like 401k contributions. Has anyone else heard of this? My means test will be very close, like $200-300 without the car. Has anyone had a chapter 13 that has a very low repayment plan? I have heard of some $0 payment cases, is this true? I was told that 401 contributions would have to stop (I'm in California too), but I plan on talking to my attorney soon about what I've read on this board. There are some posters that have less than $100 payments, so it's possible. Zero payments are a possibility, but you have to show a -negative disposable income. Have you LOOKED at every expense? You would be surprised with what you overlooked at things that aren't purchases every month, like glasses, contacts, annual car expenses, etc. Look, Look Look...I'm am sure you can find some expenses that you overlooked and do what you can to stay out of a ch 13 if possible.

You really NEED that car payment deduction! Good Luck!

[liz417]

If you stop going to school and if you have student loans, you will have to start paying them back.
I think more thought has to be given to this matter.

Our district expects us to defer them for the full 5 years

[ska]

Thank you for the reply.

I know my attorney is trying to look at all possible expenses to keep us in chapter 7, but I have heard so many horror stories where trustees throw out certain expenses.

I want to file the first week of March to get the ball rolling, because we need to get another car asap. I get up at 2:45 am to take my husband to work and then come home and try to go back to sleep before I have to get up and get the kids and myself ready for the day. Then I pick my husband up from work around 1:30 take him home, then proceed to pick-up my son from school, and then head back to work. It's just a little too much for me at times.

However, I think if we wait until April our income will be a lot less and it will be easier to pass the means test. I may just have to suffer for a couple more months.

Again, thank you for your response.

[liz417]

Thank you for the reply.

I know my attorney is trying to look at all possible expenses to keep us in chapter 7, but I have heard so many horror stories where trustees throw out certain expenses.

I want to file the first week of March to get the ball rolling, because we need to get another car asap. I get up at 2:45 am to take my husband to work and then come home and try to go back to sleep before I have to get up and get the kids and myself ready for the day. Then I pick my husband up from work around 1:30 take him home, then proceed to pick-up my son from school, and then head back to work. It's just a little too much for me at times.

However, I think if we wait until April our income will be a lot less and it will be easier to pass the means test. I may just have to suffer for a couple more months.

Again, thank you for your response.

Gosh, you really need another vehicle. Is it possible to qualify for a good used car? That would really help you to qualify for a ch 7.

[ska]

Hi liz417,

Thank you for your response. My credit is shot! All my adult life I had good credit and was able to purchase a car no problem, but the last few months have been horrible and with the economic situation, I have had zero luck. I am trying to save up money for a good size down payment and look for an inexpensive car in hopes that someone will qualify me for a loan and I could add it to my expenses. I am going to discuss this with my attorney first. I don't want to save up money and have it shoot me in the foot.

I understand your opinion on school. I have put it off for so long and now that I am almost done, this happens. Blah! The only thing I could see working in my favor is the horrible economy. Who can say what I will be earning in the next year or two? Right now my company is on a "raise freeze." I haven't had an increase in over 1 1/2 years, yet expenses keep rising. Oh well!

I will keep looking through my expenses. My attorney keeps trying to point things out to me, but she also very cautious about what she thinks the trustee will accept.