What is your best advice for a successful 13?

[Trixie007]

Sirlostalot: This was a post by HHM after he figured out what TLK's "strategy" was:

"Ok, that is pretty much what I figured, but I wanted TLK to at least mention what he was doing. For the benefit of board, here is what he is talking about.

Basically, he is talking about being a "professional debtor" (for lack of a better term). Yes, collection agencies do illegal things (in a civil sense, not so much in a criminal sense). And Federal and State laws do provide debtors with certain rights in relation to collection activity. What these sites offer (at least the legitimate ones) is "debt avoidance", but it is not really "debt solution". It's a fine line between what these sites promote and scam sites that say Income Tax in Unconstitutional. "

I hope it's ok that I quoted him here - just to keep this thread from taking off!

[muzzey58]

The best way to survive to be proactive with your attorney. Review your court documents thoroughly for any mistakes. If you are just starting out ask or call your local lawyer referral programs. Just don't answer an ad from an attorney on TV. They're way too busy and you're just a number to them. I found fantastic lawyer who was a former Trustee. Living on a budget is hard at first, but you can adapt easily. Put money aside for emergencies. Keep in contact with your attorney and let them know any changes in income or needs. I am in the middle of battling my Trustee to buy a newer car. This Trustee is known for objecting to everything, but having a knowledgeable attorney helps. You might feel frustrated, very frustrated at times, but there will be a light at the end of the tunnel. As I mentioned before, be proactive in your case. Sometimes be active helps. Best wishes.

[Alone]

We're just about 2 years in.....

**If you can go on a *budget* plan with the utilities, do so. You'll know exactly how much you will be billed each month

**We started off using envelopes (fun money, gas, grocery, household) with cash in them to get used to our budget. Instead of using debit card for groceries, we would use cash out of the grocery envelope. I put a lot of things back that we didn't need once I started paying cash.

**Any cash left over in our envelopes at the end of the pay cycle got put into savings. It got to be a fun challenge to see how much we could put into savings

**We've since stopped using straight cash and have gone back to using debit card, but we've developed the habit of not doing *impulse buying*.

**Our budget is pretty much planned out 6-9 months at a time, we're not surprised when our car registration comes up for renewal (or any other infrequent but important expenses occur). We have it set up so that the first paycheck of the month pays for bills AFTER the 15th and the second paycheck pays for bills AFTER the 1st of the month (we're always *ahead* so to speak, so bills get paid the day we get them).

**We start cutting out the minor extras in August/September to save for the holidays. We have a heavy month of Birthdays and such in June, so in March we start setting aside for those. Jan, Feb, June, July are months we squirrel a bit away for US (even if it's for just an overnighter somewhere).

**Our contact with our attorney at this point is limited. If he doesn't call back right away, we've learned it's because our concern doesn't have a major impact on our case. If it does have a major impact, we get calls back right away

Perhaps my biggest suggestion is to budget and have bi-weekly *family business meetings* so that all adults concerned know exactly where the finances stand: how much have you saved, what surprises came up, are there any purchases that anyone wants to make, etc. Hubby and I set aside 15 minutes every two weeks to talk about all those issues.

Other than that we've gotten into the mode of enjoying life again (especially the little things in life).

How did you get a payment of $400 on 120K debt when I am being told that my payments my be $1000 on 60K. What state or you in?

[Alone]

I did you get your payments so low? I owe 65K and my payment may be 800.00 to 1000.00

[wildflowers]

Just a few ideas from my experince with 13

I just finished my last payment on August 15th paying back $106,000 @ 100 % for 5 years.... its been a rough road and I sometimes wondered what the light at the end of the tunnel was going to actually be ...thankfully it wasn't a train ! There will be times of tears and you may think you'll never make it but things always seem to fall into place and lady luck was also on my side...I would first and foremost say you need to have newer cars with low mileage on them if you're in this for 5 years... luckily we made it on older cars and driving 50 miles each way to work our one car just turned 290,000 miles and knock on wood its still going without any major problems....that was my major fear ....no car no way to get to work...our plan also included overtime and to me that's a sham... I'd suggest you stop working any overtime before you file because they will make you work it if not... in this economy most don't have jobs let alone have a guarantee you''ll work overtime for 5 years! We also let our kids ..(teens at the time) know the mess we had gotten into and let them know "life as they knew it" is now over... it has been a great learning tool for them also they're now young adults on their own with wonderful spending habits so that was a real plus out of all of this for them not to repeat the cycle. Other than that just fasten your seatbelt and ride the ride that may be bumpy at times and tears will be shed but with determination, creative skills and a little luck it can be completed.... Good Luck all !

[morpheus]

As stated by many, budget is the key. I was divorced 2 years ago, and started my ch13 1.5 years ago, a 5 year plan. Part of my issue was the person I was with, I always wanted to "go cash" and get debt free but I could never do it in my past relationship. For whatever reason, combined we were a failure. But now I am doing what I thought would be impossible, making it on cash with a ch13 and alimony for part of that time. I have been able to pay all of my bills and keep at least a small reserve in the bank. As long as my payments stay where they are at, I will be ok. I am proving that I was right, and that feels good. I look forward to paying off the alimony, the 13, and getting my life back in order but I take pride in how well I have managed. I track everything on a debit card and keep a spreadsheet check ledger that is balanced every day... I know down to the penny exactly where I am at, which is important when things are tight. My attorney modified my plan to allow for the purchase of a new vehicle when my lease ran out, which will gives me dependable transportation for the remainder of the 13. Manage your limited cash, but splurge every once in awhile if you can without messing up your bills.

My summary (hope these work!)
1. Budget and cut out anything that doesn't add real value to your life, it's not forever
2. Keep a small savings and try to grow it, even if it is slow progress... you will need it
3. Take pride in your paid bills and debt free future, many will envy you in a short time
4. Balance your bank account everyday, managing cash flow will help to make your cash available when you need it, don't pay ahead on one thing if you are going to be behind on another!
5. Hope that your good faith effort and payments keep the trustee out of your life.. It is a fear that they will take every good thing you do to save money and take it away. But they most likely don't have the time... good luck, see you on the other, debt free, side...

-peace

[BnkrptcyLwyr]

Budget, budget, budget ... and be realistic about what you can afford to pay.

My clients do really well because I go through every item in their budget (all the nickel-and-dime stuff especially).

The biggest mistake to make is the "I must attempt to keep everything" attitude, and consequently the slashing of the budget to make the payments "work."

My experience is that people just don't know how to cut back, and that they think they can just cut back 200/month on food. They can't - you can't slash necessities. Write down exactly what you spend on everything ... and then see what you MUST cut back on. I had a woman who was insistent on keeping her two ATV's and wanted to keep making the payments on them. Of course, she didn't have the money to do that, and keep her house ... and yet she was insistent on keeping the house. I laid it clearly on the line ... you either get rid of the ATVs, or your getting rid of the house. They got rid of the ATVs.

A realistic budget is key ... don't kill yourself trying to stretch and make it work. My clients end up being able to save money, and I hear no crying about how tough things are. I just had a client say to me that she went over her budget, and she realized how good a job I did, and that she would be very comfortable.

[nobk]

Don't Do A BK!!

I am in a Ch 13 and wish I had not done it. As I see things now, we did not have to do it. If you stop paying the credit cards, because you can't and any unsecured creditor, you can use the $$$ to feed and clothe your family. The act of a BK will drop an atom bomb on your credit and all the threats of lawsuits, taking your children and harrasing phone calls can be stopped if you become familiar with the Fair Debt Collections Practices Act (FDCPA), a federal set of guidelines. http://www.ftc.gov/bcp/edu/pubs/cons...edit/cre27.pdf


With a proper budget and lifestyle, with a new behavior towards credit, you can avoid this drastic decision. You don't need to spend big $$$$$ to have a company "settle" your debts, and I know the BK attorneys won't like me, but you don't need them either. the debt settlement companies are ripoff schemes, I know I got ripped off. You just need to decide that you, and only you will decide to deal with all of this crap and devote an average of 20 months to get out of debt without a BK. You can settle for pennies on the dollar by yourself. I don't have any book to sell, nothing to sell. I can show you the way and I won't charge you $1. I am trying to help others avoid this.

Thank you and stay strong. Hug your wife, your children and your husband. Stay close to good relationships during this difficult phase, it will pass. But I say NO to BK! contact me at [email removed] if you want more info.


NOBK

[HHM]

I am in a Ch 13 and wish I had not done it. As I see things now, we did not have to do it. If you stop paying the credit cards, because you can't and any unsecured creditor, you can use the $$$ to feed and clothe your family. The act of a BK will drop an atom bomb on your credit and all the threats of lawsuits, taking your children and harrasing phone calls can be stopped if you become familiar with the Fair Debt Collections Practices Act (FDCPA), a federal set of guidelines. http://www.ftc.gov/bcp/edu/pubs/cons...edit/cre27.pdf


With a proper budget and lifestyle, with a new behavior towards credit, you can avoid this drastic decision. You don't need to spend big $$$$$ to have a company "settle" your debts, and I know the BK attorneys won't like me, but you don't need them either. the debt settlement companies are ripoff schemes, I know I got ripped off. You just need to decide that you, and only you will decide to deal with all of this crap and devote an average of 20 months to get out of debt without a BK. You can settle for pennies on the dollar by yourself. I don't have any book to sell, nothing to sell. I can show you the way and I won't charge you $1. I am trying to help others avoid this.

Thank you and stay strong. Hug your wife, your children and your husband. Stay close to good relationships during this difficult phase, it will pass. But I say NO to BK! contact me at [email removed] if you want more info.


NOBK

Hmm, sounds like someone is misinformed.

1. Debt settlement and bankruptcy are equally negative on your credit report.
2. Why put your financial future in control of your creditors, when you can force a settlement on them with a chapter 13?

[ABC]

In the case of a large 2nd lien strip , I can see a big difference.

[flyinbroke]

I owe 138K and will be stuck with a 2400 payment according to lawyer #1. It is only a few hundred less than the minimum payments I was making before I quit paying, and also leaves no wiggle room for emergencies unless I cancel my phone, stop contributing to my 401K, sit in the dark and eat ramen and peanut butter.I don't think this is a viable solution.

[HHM]

I owe 138K and will be stuck with a 2400 payment according to lawyer #1. It is only a few hundred less than the minimum payments I was making before I quit paying, and also leaves no wiggle room for emergencies unless I cancel my phone, stop contributing to my 401K, sit in the dark and eat ramen and peanut butter.I don't think this is a viable solution.

If that is really true, it sort of begs the question as to why you simply can't pay your debt?

You need to look at from a time perspective as well...even if your chapter 13 payment is close to what you were paying before, keep in mind, you will be out of debt in 5 years in a chapter 13, which cannot be said for making the minimum payment.

If you can come-up with the cash to settle, great. Anticipate around 40-45% to have a realistic shot at settling all debts.

[flyinbroke]

Because there is no way I can keep up with the rising interest rates. If I can postpone, then I can pay off smaller bills as I am only delinquent on five of 16 (though the balances are huge on these) because they are closed/opted out on.

Minimums are coming to 2800 with a 13 coming in at 2400. CCs are closed, which leaves no wiggle room. I assumed (wrongly) that things like student loans that are not dischargeable, and my car would be figured in separately (car only has about 12 payments before being PIF) and disposable would go to unsecured.

I will have to mull this one...800 a month is not going to be enough to cover insurance, utilities, feeding me and pets, car maintenance and potential emergencies. I guess I am expected to shut off my 401K because voluntary retirement plans are considered luxuries. I am in my 40s, so this is not gonna happen. At any rate, I will need to stockpile some cash so when it is time to file I will be able to survive contingencies.

[HHM]

You do not need to shut off your 401(k).

I think you should talk to some more attorneys.

[flyinbroke]

I will be. This was only the first one visited. I am going to shoot for at least 3-5.

I don't think he figured in my actual rent which was twice the IRS guidelines. He even mentioned that this city has too many low income people, which drives the rents down. I said I had yet to find rent close to that number that was not in drug/gang hell.

Am I correct in surmising from this visit that secured debt and student loans are not going to be standalone expenses; rather, they will be folded into a BK?