Few Questions

[mummsie223]

Morning everyone. I have to say, I am learning a great deal from this forum. I do have a few questions.

Background: Filed 13 on 1/22/10. We just couldn't keep up anymore. I had a devastating knee injury in July that sent us over the edge. Husband lost alot of work due to trying to deal with me and the kids. He was a contractor...no work, no pay. We ended up in the arrears for the house...$10k. We tried talking to the bank. They refused and started foreclosure proceedings. Hence the filing of 13 to stop it. We want to keep the house. We have $14k in secured arrears. $2k for attorney payout for the filing. 10% to the trustee. We have about $21k in unsecured...medical, personal loan, cc. Total of $45k. Current payment....$451. We have paid 2 months of this. On Feb 8 DH started a new and awesome job. Large increase in pay, holidays, vacation, sick time. YIPEE!!! We spoke with our lawyer and he said we will probably end up in the 100% payback plan. That would boost payment to $766 over 60 months. Totally doable. We would have money left over for savings, car fund. We have the 341 meeting on 3.18.

My questions:

1. I noticed that someone had been asked that they were asked if they have money left over each month. We will. Does that mean they will automatically want whatever is left over? We would be in a 100% payback.

2. Lawyer says that we are only to disclose that DH got a better paying job if we are asked. That would leave the payment at $451. But, doesn't that mean we would have to give any and all increase in pay to the trustee?

3. We will need another car in a couple of years. We couldn't finance prior to filing and won't be able to after filing. We are trying to save for a car to pay cash. We had been told that we could get another car once our van is paid...next June. Replace payment for same or less amt of payment. I am sure that is going to be hard.

4. Will we be able to book a hotel room or such using our bank card that can be used as credit card?

5. I am really concerned that this filing is going to devastate us even more. I wish the job would have come around sooner and we could have gotten out of this without having to file. How can we possibly rebuild credit?

Can't help but think that we are ruining the future. We have 2 kids that are going to be getting driver's licenses while in 13.

I know I sound completely jumbled. My mind is going at mach 2 and I can't get it to slow down. I was relaxed and ok with everything. Now we are les than a week from our 341 and I am turning into a wreck.

Thank you for any insight that can be given.

[SMinGA]

Congrats on the new job for your DH. On your injury and the fallout from it, I can relate a little. Was in a car accident in Jan. '03 where I broke my legs. When I got home from the hospital it was a few weeks before my DH could leave me in the house alone with the kids as I would not have been able to get our then-1 year old out of the crib in an emergency.

I have one question for you: On the means test, were you under or over your state median income? If under, you should be eligible to do a 36 month plan. I'm guessing your $451 is @ 60 months in order to pay in enough to cover the arrears on the mortgage and atty fee. (36 mos @ $451 and 10% tt fee would be short.) If you ARE below the median and you increase your payment to $766, make sure your attorney changes it to a 36 month plan. @ $766 x 36 and 10% trustee fee, you'd be able to cover your mortgage arrears & atty fee & have a little left for unsecured but not 100%. Nothing wrong with that.

As to the rest. When you factor in the new income be sure and account for new expenses. Will the commute distance be greater? If so, account for more travel/gas/vehicle maintenance. Will your DH need to spend more on clothing & upkeep? Drying cleaning, buying new clothes, etc.? Be realistic - you may have more money each month from the new job but also some new expenses to account for.

A ch. 13 is supposed to be that all your disposable income goes to the plan, but you can make sure your expenses are realistic. Don't want to end up in trouble because you thought you could live on $250 groceries per month and after a few months realize you can't really do that longterm. (Example)

As for needing a car down the road - if that situation arises you'd be able to petition the trustee for permission for that. Fairly customary I believe, though I don't know how easy it is to get financing when in a 13. If your attorney does alot of 13's he/she may know where to start. The trustee would probably set limits on amount to borrow, monthly payments allowed.

I don't think using debit cards for hotels, etc. is anything complicated. The downside would be if you plan on paying in cash when you check out it may be a couple of days before the funds are 'released' to use from your checking account.

[SMinGA]

Ps-if you end up with money remaining each month because you didn't spend all you were 'allowed' to spend - that is ok. Normal even I think if you have set an accurate & realistic budget for your family.

Look at it like this: some things, such as medical, clothing, car maintenance will have a monthly allotment but you won't spend the same amount each month. You may have a $20 copay in March and then have to spend $100 on glasses in June. Or $300 on school clothes in August but only $50 on odds & ends of clothing in September. Those things even out in the long run - so saving your 'extra' money in months when you can helps you prepare for those months when you must spend more.

[woeisme]

My questions:

1. I noticed that someone had been asked that they were asked if they have money left over each month. We will. Does that mean they will automatically want whatever is left over? We would be in a 100% payback.
Depends on the district/trustee. Some let you spread out the payments over the 60 months, keep the extra $ if you are in a 100% payback plan. Others make you put in all your disposable income each month, which would get your plan over with quicker. Only your attorney can answer for you what your district does.
2. Lawyer says that we are only to disclose that DH got a better paying job if we are asked. That would leave the payment at $451. But, doesn't that mean we would have to give any and all increase in pay to the trustee?
Your trustee will ask! It's on their standard list of things to ask I think, if there are any changes in income since filing. So yes, you will have to increase the payment, I am sure. But as I said in #1, whether that means ALL your disposable income or just increasing it to where you pay 100% is up in the air.
3. We will need another car in a couple of years. We couldn't finance prior to filing and won't be able to after filing. We are trying to save for a car to pay cash. We had been told that we could get another car once our van is paid...next June. Replace payment for same or less amt of payment. I am sure that is going to be hard.
I filed a motion to incur new debt after filing, and got my plan modified to include a car payment. It can be done. Just not great terms (18% interest rate!) at a buy-here-pay-here place, but you can get another vehicle mid-BK.
4. Will we be able to book a hotel room or such using our bank card that can be used as credit card?
I do this all the time. I like to use Expedia and Hotels.com, because you pre-pay the room, so no hold on your credit card. Usually a hotel will ask for a card for incidentals, but you can give them a small deposit (usually $20 a night) that they will refund you when you check out if you don't want them to put a hold on your debit card.
5. I am really concerned that this filing is going to devastate us even more. I wish the job would have come around sooner and we could have gotten out of this without having to file. How can we possibly rebuild credit?
Stop owrrying about rebuilding credit! Credit only serves one function, to get you into debt. If you already have a home and don't plan to move, who cares if credit is crap? Yes, car loans are at higher interest rates, but compared to interest you pay on revolving credit, you still come out ahead in the long run.
Can't help but think that we are ruining the future. We have 2 kids that are going to be getting driver's licenses while in 13.
I have a son who is turning 15 in May. We will be in CH 13 until he is past 17. He already knows he needs to get a job if he wants to drive, because it isn't in the CH 13 budget for another car or his insurance. It's not the end of the world. In fact, is a good lesson in responsibility and learning that privileges are earned through your own hard work.
I know I sound completely jumbled. My mind is going at mach 2 and I can't get it to slow down. I was relaxed and ok with everything. Now we are les than a week from our 341 and I am turning into a wreck.
I know, very nerve wracking! The 341 wasn't bad at all for us, but I was shaking from nerves by the time we left. Here I am 2.5 years later, and can't image what we would have done if we hadn't filed! I've learned to go to a cash only existence, and it is so liberating! I spend less than I earn for the 1st time in my adult life! It's not a walk in the park, but it has been the best thing that ever happened for us, we took control of our finances and it's the best feeling in the world (when I'm not whining about the restrictions that is, lol).
Thank you for any insight that can be given.

Best of luck!!!

[oops123]

I agree with woeisme regarding your "good credit". If you have excellent credit THAT equates to a lot of debt. Think about it, you can make 10,000.00 a month, and put it in the bank. Pay cash for everything. Annual income of $120,000.00 and zero debt.

And your credit score will be NOTHING. All they show is that you HAVE DEBT and how well you can and do pay it back. This is coming from someone who this time last year had EXCELLENT credit. BAH!