I have some ch 13 questions...need help

[indebt00]

We have been short on our monthly bills for a long time....and the time has finally come when our savings and the ability to rob peter to pay paul has come to an end. Our credit is running out and we are just going to be broke and short....decisions have to be made. We know we have to do cp13 due to income...unless we find a fantastic lawyer. We are current on everything.

We have a first, 2nd (heloc), and a 3rd (pool loan). We are about $20k negative equity right with this market. We want to keep our house and this is our #1 priority.
We have a new leased car and a new purchased car, want to keep both.
We have $30 in stud loans...I hope they go into limbo during...that is what I have read. I know they won't go away...darn.
We have approx $150k in unsecured debt.

We live in AZ. I have $10k in life insurance proceeds that I want to be sure are protected (its in a special acct) This was from a sibling...not a parent...does it matter? I really want to protect this money and not let it go to payign my bk. Does anyone know about this?

We have about $5k left in the bank right now. We need 3-4 months before filing. We are using our cc's to live and need some time for that to stop. the money will run out by then.

I hope this gives you some background...now some quesitons:
Please don't judge....

1. do the trustee's review your tax return? like an audit? we may get a refund...what happens with that? we will spend it to pay bills...will they make us pay it back? or since we won't be filing for a few months does it matter?
2. we are with BofA bank, and have cc's with them. should we open an acct at a new bank so they don't freeze our accounts?
3. can they take what money we have in the bank? or does it only matter how much is in there the filing day? do we need to spend all the savings before we file? wouldn't it be nice to have to live on for the next year.
4. do I need to start printing cc statements? I get paperless on almost all of them? how about bank stmts?
5. do we hire the lawyer now, stop paying our cards, save money to pay lawyer and wait out the few months we need??
or....do we do this without the lawyer? will the lawyer let us wait to make our situation best? thats why I am here on these boards...to plan.

I guess really I am trying to prepare for what is coming. We are using the cc's and I know that charges within 90 days can be questionable. So how do you plan?? We are both terrified of getting collection calls at work (worried about how our jobs will react)
is it ok to keep the cash in the bank? I am thinking we could use what is left in our savings to pay the lawyer but the money we have will only last maybe 2-3 more months if we continue ot pay them. if we stop paying them we could save money to pay the lawyer.

help...do you plan for a while then see a lawyer or see the lawyer and then do the planning. we won't be able to file right away due to cc usuage. We can get in trouble for charges over $300, right? we are not doing any cash advances...just living....but just did $1000 in dental work....so stuff like that.

we will be broke in just 2-3 months so I am trying ot prepare our life for being poor and in a ch 13. this will happen whether we want to or not.

any advice on the planning would be so nice. thanks ahead.

[indebt00]

gosh...sorry for writing a book

[indebt00]

another question....i read some posts that said the trustee reveiws your bank statement line for line...
do they do that to credit card statements too?

will they question how we spent our money in the last 6 months....we live, we spend, we pay our bills...thats not bad, right?

we always thought our situation would work out....raises at work, savings, bonuses???...I don't know... we just want to be able to pay our bills...this is so hard. reality is setting in as our credit cards are lowering our limits and taking away what available credit we had due to the economy. we have tried cutting our budget. when it comes down to it...our credit card pymts kill us. we just can't make is even, we are short every month.

this sucks. we never thought we would have to finally do this.

thanks for listening

[Flamingo]

Hi InDebt00 - first, I see you joined in 6/06 but am not sure how often you may have logged in to keep up with postings on here and items that can be researched. Go to the Chapter 13 forum and educate yourself with the stickys that are there. There is information that can answer your questions. Your scenario is extremely close to what we went through in that due to a job loss by my husband during the tech bust of 2001, we lost 70% of our income and during the year following did everything possible trying to stay afloat and not have to file BK. Robbing Peter to pay Paul just gets you further in debt and that is just more money you may have to pay if you are able to file Chapter 13. We too wanted to save our house due to many reasons. I am leaving home shortly to head to work and don't have much time to post some things in this reply to you except to first educate yourself with the Stickys on here and also you should be receiving replies from other posters who can help out.

[StartingOver08]

We have a first, 2nd (heloc), and a 3rd (pool loan). We are about $20k negative equity right with this market. We want to keep our house and this is our #1 priority.
We have a new leased car and a new purchased car, want to keep both.
We have $30 in stud loans...I hope they go into limbo during...that is what I have read. I know they won't go away...darn.
We have approx $150k in unsecured debt.

We live in AZ. I have $10k in life insurance proceeds that I want to be sure are protected (its in a special acct) This was from a sibling...not a parent...does it matter? I really want to protect this money and not let it go to payign my bk. Does anyone know about this?

According to this site http://research.lawyers.com/Arizona/...n-Arizona.html you may keep life insurance proceeds up to $20k. Check with your attorney to make sure that is accurate. The link specifies what you may and may not keep in a BK.

We have about $5k left in the bank right now. We need 3-4 months before filing. We are using our cc's to live and need some time for that to stop. the money will run out by then.

I hope this gives you some background...now some quesitons:
Please don't judge....

1. do the trustee's review your tax return? like an audit? we may get a refund...what happens with that? we will spend it to pay bills...will they make us pay it back? or since we won't be filing for a few months does it matter? If you are filing a CH 13, the rules are different from a CH 7. However, many posters have said that they have to turn the refunds over to the Trustee during their CH 13.

2. we are with BofA bank, and have cc's with them. should we open an acct at a new bank so they don't freeze our accounts? Yes, close your accounts with BOA and move to another NEUTRAL bank or credit union. BOA is notorius for using the 'right of setoff' provision to drain your account when you become past due

3. can they take what money we have in the bank? or does it only matter how much is in there the filing day? do we need to spend all the savings before we file? wouldn't it be nice to have to live on for the next year.
Yes the Trustee can take what is in the bank over the allowed exemption

4. do I need to start printing cc statements? I get paperless on almost all of them? how about bank stmts? Yes, save the cc and bank statements on your hard drive. You do not need to print until the attorney tells you how many months to provide. Usually you can go back years when you still have access to your account, so I would save all the available data in your BK file on the hard drive and just print what is needed only. Don't short yourself, save at least 3 yrs worth of info.

5. do we hire the lawyer now, stop paying our cards, save money to pay lawyer and wait out the few months we need??If you are still current, make sure to budget the attorneys fee in your savings. Start looking for a lawyer. You can retain him now so you can ask questions and divert calls to him during this pre-planning stage.

or....do we do this without the lawyer? Up to you. I filed with an attorney and have been extremely thankful I found one that knew what he was doing. I was able to file a CH 7 rather than a CH 13 and I was over median income significantly. will the lawyer let us wait to make our situation best? thats why I am here on these boards...to plan. A good attorney will discuss all of your options and the best strategy for your situation. If he/she is not willing to do that - run.

I guess really I am trying to prepare for what is coming. We are using the cc's and I know that charges within 90 days can be questionable. So how do you plan?? We are both terrified of getting collection calls at work (worried about how our jobs will react) STOP USING THE CARDS RIGHT NOW. It is not a matter of questionable - it is considered a "PRESUMPTION OF ABUSE". At this stage you know you are insolvent (see the top of your post) and so any charges made now, you have no intention of repaying. This is a real problem as your case can be dismissed. If you can not live without charging, that is a BUDGET issue. You need to formulate your budget without the use of credit cards BEFORE YOU FILE.
is it ok to keep the cash in the bank? I am thinking we could use what is left in our savings to pay the lawyer but the money we have will only last maybe 2-3 more months if we continue ot pay them. if we stop paying them we could save money to pay the lawyer. You can stop paying - you should stop paying if you know you are filing. Get the info downloaded from the websites though first!

help...do you plan for a while then see a lawyer or see the lawyer and then do the planning. we won't be able to file right away due to cc usuage. We can get in trouble for charges over $300, right? we are not doing any cash advances...just living....but just did $1000 in dental work....so stuff like that.

we will be broke in just 2-3 months so I am trying ot prepare our life for being poor and in a ch 13. this will happen whether we want to or not.

any advice on the planning would be so nice. thanks ahead.

Advise: Interview 3 to 4 attorneys now. Download all of your bank statements and credit card statements to your hard drive. Close your BOA accounts. Open new accounts right away at a neutral bank or CU. Stop paying your credit cards. Formulate your new Budget. Track your expenses so you know where the money is going. Check the link posted for you above.

[indebt00]

I guess really I am trying to prepare for what is coming. We are using the cc's and I know that charges within 90 days can be questionable. So how do you plan?? We are both terrified of getting collection calls at work (worried about how our jobs will react) STOP USING THE CARDS RIGHT NOW. It is not a matter of questionable - it is considered a "PRESUMPTION OF ABUSE". At this stage you know you are insolvent (see the top of your post) and so any charges made now, you have no intention of repaying. This is a real problem as your case can be dismissed. If you can not live without charging, that is a BUDGET issue. You need to formulate your budget without the use of credit cards BEFORE YOU FILE.


this is exactly what I am worried about. if we continue to pay then we are not abusing, right? we can not live without charging as life is now. IF we stopped paying all credit cards...we would be fine until the bk. I honestly don't know how we will live on such a tight budget...but that will be new lessons for us to learn.
how much time needs to go by before we file if we stopped using cc's now?

thanks for your answers. I have read many of the stickys and needed more personalized answers.
we are going to start interviewing lawyers asap.

[indebt00]

Hi InDebt00 - first, I see you joined in 6/06 but am not sure how often you may have logged in to keep up with postings on here and items that can be researched. Go to the Chapter 13 forum and educate yourself with the stickys that are there. There is information that can answer your questions. Your scenario is extremely close to what we went through in that due to a job loss by my husband during the tech bust of 2001, we lost 70% of our income and during the year following did everything possible trying to stay afloat and not have to file BK. Robbing Peter to pay Paul just gets you further in debt and that is just more money you may have to pay if you are able to file Chapter 13. We too wanted to save our house due to many reasons. I am leaving home shortly to head to work and don't have much time to post some things in this reply to you except to first educate yourself with the Stickys on here and also you should be receiving replies from other posters who can help out.

sadly when I joined life was different and I was probably reading on how to build better credit.

I will research more too. thanks

[BigJohn]

Your hardest problem will be that of adjusting your life style so you don't use any credit cards. That is hard.

[MommyMc]

Hi Indebt00!

You sound just like we did when we came to the conclusion that something had to be done. I was so nervous, I couldn't sleep, I ate and ate and now weigh 10 pounds more because of it. We knew we were starting to drown because we could NOT stop using CCs to live. Well guess what... you CAN survive not using CCs! We stopped using them and stopped paying on them the minute we decided to file for BK. When you are not paying the CCs you will have that money to live on. You need to sit down with all of your bills: cable, house, phone, utilities, cars, insurance and make out a monthly budget. Your lifestyle will have to change! It was very hard telling my 11 year old son he had to choose between select Baseball and select Soccer. We just can't afford to do both anymore.
As far as the creditors phone calls. Honestly, I found them not to be as bad as I was expecting them to be. They never called my husband at work. For us, they didn't start calling until we missed our first payment. When they did call it was a recording saying " our records indicated that your payment of $$$ was due on MM/YY has not been received, if you would like to make a payment by phone...."
After the 2nd missed payment then actual people would call. By the 2nd miss payment I had retained a lawyer and told the caller the name and number of the lawyer, once that info is given they don't call you anymore. I found the whole thing rather easy.
My neighbors are going through this too, and I know they stopped using CCs and paying on them back in October and they filed here in January.

As far as the tax return goes.... our trustee will let us have an refunds under $2000. Anything more than that then the whole refund will go to the trustee.

Not using CCs has been so refreshing. It was awesome having a CC free Christmas. I have 4 kids and spent $700 on them... all cash!! My kids enjoyed everything they got, they got what they wanted, just not EVERYTHING they wanted.
Good luck and talk with a lawyer, he or she will walk you through everything.

[indebt00]

MommyMC...thanks for the encouraging words. I know we will be able to afford life with no credit cards....but I am scared of life in a ch 13 bk.

It is scary to finally decide to give up....we tried so hard to make it work.