How tight is a CH 13 repayment plan.

[ameangreenbe]

Hi all,

I'm considering CH13. I'm curious to know just how tight cash flow is based on approved payment plans. I've reviewed Form 22C and the IRS allowances but have questions such as...

• Will the Court allow me to build emergency savings?
• What about money for birthday and Christmas gifts?
• Vacation? Without one a year could we even maintain the attitude needed to complete the plan?
• What arguments can be made for special circumstances?

I've learned that budgets that are too tight / restrictive are not followed (at least in my case).

Thank you in advance!

[justbroke]

• Will the Court allow me to build emergency savings? It's not an allowance. If you choose to eat less, and drive less, then you can save that money. The Court will not allow you to build an emergency savings, by allocating money from your Disposable Monthly Income (DMI) to create such an emergency fund. It is prudent, however, to create such a fund with any and all spare change!!!
• What about money for birthday and Christmas gifts? If you are below median, you can add in expenses for these things. Above median, and you need to go by the IRS guidelines. You will have to save money in your budget to do this. Your lawyer may be able to figure out some expenses that the Trustee would allow. However, over median, and you're pretty much stuck. There are creative lawyers out there though
• Vacation? Without one a year could we even maintain the attitude needed to complete the plan? Who knows. This will depend on how well your Plan was devised and how well your lawyer exercised every right you have to allowances, in order to be able to save money during the plan. See my first response. The Court couldn't care less about you not being able to take a vacation. You are not, technically, allowed to live it up, while the creditors suffer
• What arguments can be made for special circumstances? If it's medical... many arguments! If not... they do not care. There was a case where a man and woman co-habitated for years. This included the man's minor children (not the woman's bio-children). The woman filed, claiming teh "family". The Court ruled that the co-habitation was by her choice and that the Court would not allow her to care for those children because first, she had no legal responsibility, and that the creditors shouldn't have to be second to that decision. Harsh, but true

The budgets can be tight if you're not used to a budget. Combine that with a lawyer doing a poor job at getting yoru the most in allowances... it would be difficult to survive the plan.

[woeisme]

We were pretty lucky both with our lawyer crafting a "liveable" plan and then with the trustee, who doesn't require tax refunds or the stimulus check and doesn't care about changes in income unless they are really large, so can work some overtime here and there without it all going to the plan. This has allowed our BK plan to so far be easier to deal with than life was pre-Ch 13. Went to New york and Conneticut for 10 days last summer for vacation, was able to swing it with a combo of savings and making it a partially working vacation (4 days work, rest vacation/travel days) so that my job paid for parts of it.

[EricaCallaha]

The budget is pretty tight. Our lawyer made our food allowance at the maximum even though we don't spend that amount and I have been able to start to slowly build a savings. We have some latitude in other places as well. You have money for birthdays and Christmas but it won't be as expensive as you are used to it being. You learn to shop smarter and not just buy stuff. Consider yourself lucky that you get to vacation at least once a year. We go on vacation, but we go visit family, combine my husband's work trips with our trips and find less expensive places to go. We have found that our bankruptcy has changed our attitude towards money and "things". It is not about what we want but what we need to survive and count our blessings for extra.

Good luck. It is a hard decision to make and only one you can make for yourself.

[BigJohn]

As for vacations, what do you consider a vacation to be?
We go somewhere to places some people consider 'vacation' almost every week. In some people's eyes, I have been accused of being on vacation for the last 15 years.
I suggest when you have 'free time', use it the best ways you can.

[ameangreenbe]

Thanks

Thanks to all for the advice so far. It's a hard choice and the real world feedback is very helpful.