13 with NO disposable income?

[Dizzy]

Has anyone ever done a 13 with a negative ratio of basic living expenses to income? What were you payments like? I'd love to do a 13 vs a 7 but we have to eat hot dogs and mac and cheese twice a week at it is.

[AngelinaCatHub]

Read this forum more. Why anyone would chose a 13 over 7 I would not guess. C7 is easier and a complete free start at a new life. Get over the pride as it goes before falling. We were the same way, until the figures showed us we were "7" meat. 'Hub

[justbroke]

Yes, I have negative disposable monthly income (DMI). I'm in a 0% plan for 60 months. My payment is in my signature. I qualify for Chapter 7, but I had a really strange case and switched some things around, and I needed a Chapter 7 to deal with some arrearages.

[Billssuck]

We too had a negative DMI but had to lower our expenses to get our DMI up to $144/mo and get us into a CH13 repayment plan. Reason for 13 over a 7 was three fold: 1) adult son at home that would be litigated in a ch7 2) Mortgage amount would have to go to a higer level trustee for approval in a ch7 3) Have about $500/mo in business expense income that would be scrutinized in a ch7 and we were only $800/yr below the median income. So it was a ch13 for us although technically we qualifed for a ch7.

Repayment amount is $125/3 years. We've had to change our lifestyle to fit the budget but so far it isn't so bad. Really before we were throwing away money. Just this morning I figured what we spent on everything last month from receipts and my checkbook and I have some money I can't account for and I need to know where it went. There is no more wastefulness with money and this is really bugging me. To make ends meet, I now shop at a discount grocery store, combine trips to save gas in my car, do more "free" things for entertainment like going to the library while I'm out doing errands, etc. It's not easy but doable.

Good luck!

[graciemae]

As for why chose a 13 over a 7.........I, personally, feel better about the decision to file bankruptcy knowing that I am paying most of my debts back.

[Dizzy]

I finally spoke to someone today who had the time to answer all my questions. Funny enough, it was an attorney over the phone and not one of the three I actually had face to face consultations with. She didn't understand how, with no disposable income, three attorneys had tried to convince us to do a Ch 13. I feel much better after speaking with her and we have definatey decided to do a 7, walk away from the house and surrender the car. There was one thing she said that stuck. The said the only pleasure she gets out of helping people file BR is to hear their relief when it's all over and see them have peace of mind once more and said that if we try to do a 13 with no means to make the payment, we would be feeling MORE stress than we are now. Finally, some honest answers.

[inevitable]

It is true in some cases, but in my case, I will be paying considerably less than what I used to pay on the credit cards, so a 13 or a 7 will help me greatly.

[Dizzy]

I understand and that's awesome for you. However, we seriously don't have anything left after living expenses to pay anybody with. This has to be the only way to go for us.

[inevitable]

A 7 is really the way to go, you will feel so much pressure taken off after your discharge, a real fresh start.

[Dizzy]

My biggest concern in all this is where we are going to find someone to rent to us. I've started looking already and there's not much available in this small town.

[Dizzy]

Yes, I have negative disposable monthly income (DMI). I'm in a 0% plan for 60 months. My payment is in my signature. I qualify for Chapter 7, but I had a really strange case and switched some things around, and I needed a Chapter 7 to deal with some arrearages.

So, you don't make any payment monthly? If that's possible, I wonder why none of the attorneys mentioned it? Did you have cc, mortgage, and car payment arrears? What happens to those? They don't get paid AND they can't take your house or your car?

[justbroke]

So, you don't make any payment monthly? If that's possible, I wonder why none of the attorneys mentioned it?

I do make monthly payments through the Trustee... see my signature line for the amount.

Did you have cc, mortgage, and car payment arrears? What happens to those?

I only pay for my secured debts (house, cars) and some priority tax debt. On top of that, I contribute 10% to the Trustee. The unsecured creditors (credit cards, unsecured loans) will get 0% in my Plan as it stands now.

They don't get paid AND they can't take your house or your car?

They can't "take" anything in a Chapter 13. You can keep everything if you are able to get your plan of reorganization (aka the Plan) confirmed.

So, they can't take my house or car so long as I, and I have, relinquish submit my projected "disposable monthly income" to the supervision and control of the Trustee. Right now, I have no disposable monthly income for the Trustee to pay to unsecured creditors... so they can expect 0%. However, if I get so much as a tax refund, the unsecured creditors will get something, because I have to hand over all refunds to the Trustee (although I'm in dispute on this too, since I'm negative).

There are some other caveats, which can become non-trivial if you have a lot of equity in non-exempt property.

[Dizzy]

But you do have to keep making the regular payments on the house and car in addition to the CH 13 payments, right?

[justbroke]

But you do have to keep making the regular payments on the house and car in addition to the CH 13 payments, right?

My Chapter 13 payment through the Trustee includes my house, cars, priority tax debt (very little, around $2k), and the Trustee fee. The Trustee makes my house payment (they actually haven't in 12 months), car payments, and tax payments.

[meoops]

OKAY...I AM REALLY CONFUSED NOW...

Can someone "dumby it down" for me to understand.

You have your house and car in a 60 month payment plan? Your mortgage must be almost paid off, right?