What is daily life like on Ch 13 plan?

[contemplate]

We just began looking into the option of filing ch 13. I have a few questions about life on a 13 plan. From what I understand one's plan can vary greatly. Yet, I am wondering, do you feel like you can live comfortably? Are there set amounts allowed for groceries etc. I did find an IRS allowable expense table online, but it seemed like it was for tax collections. We are not behind in anything including taxes. You don't have to save receipts to show, for example how much you spent on groceries do you? If for example you spend $5.00 less than allowed, you get to keep it and put it toward whatever, right? Do you feel like you can afford clothes? Birthday & Christmas presents? Does life feel normal (yet altered.) Or do you feel like you are serving a prison sentence? I am sorry for my ignorance. Thank you so much for your responses.

[CCB35]

For me i never would have gotten out of debt if i hadnt filed.however the last 38 months have been very difficult .it does feel like a sentence in a way and blessing in others.i count down the months and cannot wait til this is over.i will never get like this again

[BNKRPTinNC]

Speaking only for our situation. We have been in the plan for a year now and all secured and unsecured payments are made thru the trustee. This leaves us with utilities (phone, electric, etc.), insurance and of course property taxes. Payments are made directly to the trustee thru payroll deduction and we use the rest for the "necessities". So far, we have been able to save and live without the dreaded debt hanging over our heads. We are not required to account for every penny spent and are living quite comfortably. Changes in our lifestyle were made as well as sticking to a fairly strict budget. We plan our spending and filing a 13 has been the best thing for us, financially. Sure we had to make sacrifices but realized that the things that were given up were not things that were worth having to begin with. Good luck.

[lrprn]

From what I understand one's plan can vary greatly.

You're right. Plans do vary a lot, and having a good lawyer who is skilled in creating plans to file that are livable for five years is very important. Finding a really good Ch 13 lawyer first is the most important thing you can do for yourself if you file a 13. You'll save many times over whatever extra that lawyer might cost you at the beginning.

Yet, I am wondering, do you feel like you can live comfortably? Are there set amounts allowed for groceries etc.

"Comfortably" is a very subjective word. What some may find comfortable, others will find very restrictive. I can say that in our case, once we had our emergency fund saved up, we've done ok since then because we stick to our agreed budget. We also spend no extra money unless we both agree to do so. We've dipped into the emergency fund a few times for home and car repairs and other unexpected medical bills over the last 3 1/2 years, but so far, so good. We are able to buy gifts, travel sensibly.....we aren't hermits. But we can sure tell you everything to do in our general area of the state that's low cost or free

You don't have to save receipts to show, for example how much you spent on groceries do you?

No. Your trustee doesn't watch your daily financial activities at all. Once you've paid all your bills (secured, utilities, living expenses, etc), whatever is left over is yours to do what you want with. If your plan is reasonable and your pre-filng spending habits have changed to fit your budget, then some months you'll probably have some money left over. It might not be much, but whatever it is, put it aside into your emergency fund. That way you'll have money for the months when you run out of money early - that happens too.

Surviving - even thriving! - in a 13 depends on really good budgeting and persistent sticking to that budget over a long three to five years. You learn quickly how to separate 'wants' and 'needs'. You learn quickly how to watch your pennies. Coupons and online sales are the norm, because every penny saved helps you weather the bad times successfully.

If for example you spend $5.00 less than allowed, you get to keep it and put it toward whatever, right?

Right.

Do you feel like you can afford clothes?

Yes. Not designer clothes but decent professional and play clothes on sale.

Birthday & Christmas presents?

Yes, they are in our budget. Nothing extravagant. However, one of the most important lessons we learned is that inexpensive gifts from the heart mean a hundred times more than expensive gifts meant to impress.

Does life feel normal (yet altered.) Or do you feel like you are serving a prison sentence?

No, we do not feel like we are serving a prison sentence. Are we looking forward to our discharge? Of course! But we have learned so much during this process about how to handle our money wisely - we've also learned a lot about ourselves....that is priceless. For us, it's been well worth every stress, every frustration. We *KNOW* we can survive this and will thrive afterward.

[j0hn13]

I was the one responsible for the situation I got myself in. Being in a Ch 13 isn't easy, but I don't look at it as a prison sentence. In the beginning it was rather difficult, but you learn to budget and live with what you have without credit cards. As long as I had my job, was able to pay the rent and put food on the table, that's all that mattered to me. There were no vacations or going out to buy things I didn't really need.

I needed to do this. For too long I had large amounts of debt I was never going to get out from under it. It was very stressful and draining. I'm also at 100% payback with a large monthly payment. I haven't heard one word from my trustee throughout my whole plan. Never wanted to see any kind of records or tax returns. (that's probably because of the 100%)

It's hard at times, but you need to stay focused and disciplined on the finish line. Things will get better. I can tell you this because I have one more payment to go...it can be done!!!

This site is also a godsend. You'll never feel alone here. Many people to offer their support.

[tigergem]

Well. I have only JUST made my first trustee payment. The point is I was able to make it.

I was not able to buy Christmas presents for everyone I wanted to this year, but c'est la vie. I got my son a little something, but I spent less than $50.

I have been working very hard on my BUDGET, and except for the fact that I am not 100% sure of what my medicare health plan is going to cost, it is starting to look like Chapter 13 might have been the very best thing that could possibly happen to my budget. So far it looks like January and February I am going to be eating a lot of peanut butter and jelly.

But in March, after I make the last installment on my filing fees, I think I start to see a light at the end of the tunnel, and I might even be able to put some money in my emergency fund again. Which I just really hope the trustee won't take as disposable income, because anything could happen. Income taxes. Medical bills. Car repairs.

Oh. I forgot to mention. In the few of months leading up to my filing, I tried living without that same amount of money. You know. Saving it away. Well what happened was I ended up spending it on a new transmission for my vehicle, but the point is, I was able to LIVE without it so I have kind of been practicing.

[justbroke]

It's working for me.

[klandsb]

This was something I had to do if I ever wanted out from under all this credit card debt & of course the creditors started knocking. It's a very long, drawn out story but I was invovled with a Debt Settlement Company which was a huge mistake and made my financial situation much worse. I had gotten so accustom to using credit cards for everything and anything . I guess you could say I was a credit card addict
If I didnt have the cash then pull out the plastic and worry about it later. Making minimum pmts and never getting ahead , charging more, interest rates raised, minimum pmts raised and the whole snowball effect got overwhelming.. Something had to be done. This is something I should have done B4 the Debt Settlement fiasco but thats over & done and time to move on.
Living on cash is a very HARD adjustment for me .I'm managing it and hope to get lots better at it. Its only been 2 mths but I am looking forward to the new year and have my fingers crossed that nothing breaks down or quits working. My pmts just got lowered and my 401k loan (that wasnt included in my plan) will be paid off in 2 mths. That should give me just the right amount to be able to save a little and be able to live from paycheck to paycheck without running out of money at day 10 and have 4 days with pennies in my wallet... It's do able but not the life I was use to living... This Christmas is very lean but everyone is getting something paid for with "CASH"...
I am trying to think of it like a 5 yr car pmt ... Its not forever and I cannot wait to be debt free

[Flamingo]

If you can learn to budget, totally change your lifestyle and live on cash only, you will make it through a 13. It is not a death sentence, it is not easy and it is an eye opener and you will learn to budget from it, learn to save and learn that material things in life are just that - material things. Some people just cannot adjust to living without credit cards when they don't have the money to buy anything. They have a difficult time with a Chapter 13 because they will overspend on something they maybe shouldn't which could put them short to make their monthly plan payment and it will just snowball for them.

I always state on this forum that chapter 13 is the best budgeting teacher ever because you have to live it and not just read about it out of a book. And it is spread out over several years. In the end, you will take with you some marvelous tools that hopefully will stay with you for the rest of your lives as to how to view money, that you really don't need that pair of shoes in six different colors and the sun will come up tomorrow if you don't purchase that gizmo to outdo the Jones' down the end of the block.

BK is a life event - learn from it and move on with new skills and knowledge.

[dakota112]

Filing CH 13 as strategy to avoid CH13

Is it feasabile and or would an atty even try to have one file CH 13 when they really should be a CH7, but a TT might try to push for the 13 if it were files as a 7? For example if you are just below median, -DPI of 5K adn unsecured of >100K could they make the 13 stick or does the TT move to convert you to a 7 the way they ask you to convert to a 13 when 7 is inappropriate? My thinking is that the TT would see that there is no obvious abuse and not enough income to fund the 13 and would make it thus easier to defend the 7 filing, rather than the other way around.

[klandsb]

I think the key to this is to begin with a VERY GOOD attorney that knows his stuff. That is why my advise is always to go to as many as will see you until you find the right one and u will know when you do......

[lrprn]

Is it feasabile and or would an atty even try to have one file CH 13 when they really should be a CH7, but a TT might try to push for the 13 if it were files as a 7?

The key is how you come out on the Means Test and (if needed) Schedules A-J. You cannot file Ch 13 unless yours show at least $100-120/month disposable income - and preferably more than $170-180/month disposable income - at a minimum. Otherwise your creditors can't get as much as they would if you filed Ch 7 which is against the bk law as it's interpreted.

Since you asked, which chapter are you hoping to file? It takes very unusual financial circumstances for it to be a good idea to file Ch 13 if your Means Test shows you can file Ch 7.

[dakota112]

Thanks for your input Irpn; I am hoping to file in 2 weeks. Chapter 7 and my atty says we should be OK. I only earn 2K a month right now, am under the median by 3K, and my wife is a homemaker. My only concern was will the UST when he looks at this try to force a 13 as I expect and hope my income will go up to 7 K a month in one month but my J number will still be a negative 3K even with the higher income because of higher income tax. Otherwise there is no assets, no property so how will the creditors benefit from me filing a CH & ?

[cchater]

Hi, Contemplate -

I have 19 months left in my 5 yr Chapter 13 plan. I can honestly say it has been the best thing I've ever done right. It was very hard telling my great husband what a mess I had made of our finances. But he stood beside me through this all. I have an accounting degree and cannot manage money to save my life. However, Chapter 13 has taught me I can live without credit cards which is a great thing! The stress has been lifted and I cannot even tell you what that means. We did have a great lawyer that is extremely brilliant and very helpful and non-judgmental. I will never go back to that place again. A very hard lesson to learn but it was a blessing in disguise. I have my life back! Good luck to you!

[welovedis]

Well, we are only about a year into our payments so I am not as experienced as others on the plan. I can say that I worry a little about big expenses but live day to day life from a different perspective that before. Nothing gets purchased without some forethought, little expenses that milked us dry are no longer a concern, we just do without things that are unnecessary.

The biggest positive is that my son, who doesn't know we are in BK d/t his age, is so incredibly terrific about spending less money on anything. He sees that we are living differently and has really embraced that lifestyle at this point. He just got a $100 gift card for Christmas from his grandparents and offered it to Mom/Dad because "there just isn't anything I really NEED" right now". Great attitude from a 13 year old!

I think you will find yourself learning to scrutinize very carefully where the "little leaks" are in your budget & plugging those holes. And, on a positive note, we've all lost weight and improved our health by being more active (taking walks, brought used cross country skis @ a garage sale & do that often, walk the dogs, play Wii fit together at least 3xs a week) so that is an added benefit!

Best advice I could give is to make sure you have a terrific lawyer who really GETS CH 13 filings. We have a really nice guy attorney, but CH 7 is his strong point and CH 13 confuses even him!