Stuck filing 13-panicking over monthly repayment :(

[newbie2]

Sheila, get a 2nd (or third) opinion please. For a family of 5 you are not taking enough expenses in to account and probably would find yourself in trouble with this plan over the long term.

You own your cars outright - you can still claim operating expenses. I didn't see them anywhere in your list. Also, as others have said, you are allowed home maintenance in your budget as well as entertainment, clothing, etc. (The Chapter 13 budget is forward looking.) What you spend now (because you have cut back in order to survive) is not how you should be living in a Chapter 13 plan.

Please don't go through with this plan the way it is now.

[SMinGA]

Another consult or two (with different attorneys) is a good idea, no matter what gets worked out with the first attorney you saw.

Before you meet with anyone else though, take some time to sit down and determine a realistic budget that covers everything. Remember, this will be your budget for the next 5 years. While its true that the plan can be adjusted if something drastic changes in your income/expenses, you don't want to be thrown off track because the minor things add up more quickly than you realized.

[parkd]

momofthree: Where did you get those standards from, which link? I would like to know what the IRS standards are for just me if I file. Thanks! Great info!

[momofthree]

momofthree: Where did you get those standards from, which link? I would like to know what the IRS standards are for just me if I file. Thanks! Great info!

Straight from the dept of justice website:

http://www.justice.gov/ust/eo/bapcpa/20100315/meanstesting.htm

[SMinGA]

Some expenses are federal - and some by state/county. Like utilities, rent/mortgage reasonable figures will vary. But I believe the food, clothing, etc. are all based on federal guidelines.

[sheilaE]

I just started a new thread with this, but also posting it here.

My husband and I met with a lawyer this week-have not filed, but will within the next couple of months. I emailed him with a 2 questions that I failed to ask at our meeting. I'm sure he knows what he's doing, but I wanted to double check on here to see if anyone had received the same answers.

Question 1:
ME: If my husband makes any future O/T earnings "after we file" -can we keep it or will it have to be turned over to the trustee.
LAWYER:Yes, once the amount to the trustee is determined, it will not change.

QUESTION 2:
ME:The repayment amount is high, if we change husbands tax status so he brings more take home pay, can we keep it or will it have to be included into our payment to the trustee?
LAWYER: You will be able to keep it-will not make the payment go up.

So, does all this sound correct? We are going to be filing in CA.

Also-I told him the repayment plan was not going to help us and he agreed. he said he knew we were leaving things out. Told us we would go over it all again, but for the next month we should be keeping track of all our expenses-including what we spend on our pets .

[SMinGA]

That sounds reasonable. Figure out your budget by living it. Very good advice, I think!

[mrslick]

my wife and I monthly gross is $10k with a $2800 mortgage, $387 car loan, and we no kids. our monthly payment is $786 which is 21% of all unsecured debt. i don't care if like the attorney, GET A SECOND AND 3RD OPINION. I went with my attorney because she was nice and not too expensive, let me tell you i wish i picked another one. You said you don't have car loans, i strongly suggest to get a new car if the ones we have now are old before you file. i got stuck 02 Chryler Sebring that i keep putting $ fixing it. you should be able to get a car loan now before you file, it's much harder after you file.

[sheilaE]

I keep hearing the same thing...buy a car. As it is right now, there is no way we can afford a car payment. How are people doing this? I mean, we're going to have to make the car payment on top of the chapter 13 payment-or will the chapter 13 payment go down because of the car payment?
Also, won't we get in BIG trouble for buying a car when we knew we were about to file bankruptcy? I don't want the trustee to throw the whole thing out and say we don't qualify because we bought a car. Just wondering

[momofthree]

The chapter 13 payment will go down due to the car payment, or it will be included in the chapter 13 payment and less will go to unsecured creditors. Buying a new car is the smartest thing you can do if you're going to be filing a ch. 13.

And, no, you won't get in big trouble buying a car when you know you're going to file--many attorneys actually encourage it, I'm surprised yours didn't. You can't cram down a new auto loan, you have to fully pay the entire balance, so it's not fraudulent. I *think* (please double check this) that you can get your interest rate lowered to the "till" rate though by filing bk, so even if you can only qualify for a horribly high interest rate, it's still in your best interest to buy the car anyway. And finance as much of it as you can...you don't want any equity in the car to have to exempt.

[mrslick]

like i mentioned before if your cars are 7 yrs and older, i would buy a car if i were you. now don't go out and buy a brand new benz, get something like toyoda, honda, or even an infinity. your new car payment will be included into your payment plan. see once you file, the trustee will be worse than Big Brother (IRS). i'm not sayting to go waste your money if your cars are decent.

[sheilaE]

Our two cars are 10 years old. My daughter uses one to get to school and work. We've been having lots of problems with the other-it's always in the shop, so this all sounds really wonderful-BUT won't I get laughed out of the car dealership? We haven't paid our cc bills since December. They'll run a credit check and then what? I'm sure no one is going to give us a loan

[junquemayle]

Anticipatory Panicking

Changes you could make to your budget (using standards for family of 5):

1st. $2000.00
2nd. $550.00 (might be stuck with this, so I'm adding it in)
Electricity: $350.00 in the fall & spring, $450.00 in the summer& winter
Medical: $300 (IRS standard)
Life Insurance: 200.00 (is there a reason this is so high? Medical issues? Whole life?)
Groceries: $750 (IRS standard)
clothing: $240 (IRS standard)
Home maintenance: $150 (just a guess, but this should be reasonable)
Garbage/water: $80.00
Car operation expense (using Northwest region--don't know where you are): $422 (IRS standard)
Car ownership expense (car payment--go buy a car!): $489 (IRS standard)
Cell phones $150.00
Cable/internet $175.00 (don't know if trustee might view this as excessive?)
Entertainment: $100
School lunches: $50.00
Total expenses: $6006 before chapter 13 payment

I am just starting to consider my options. In fact, this is the first forum I have found when trying to learn more about the Chapter 13 consequences/benefits.

Also with a family of 5, I looked at the link you (momofthree) posted for the US Trustee (Census Bureau, IRS Data & Admin costs). For NY state, the "housing and utilities" allowance for a family of 5 in my county is only $1231. However, my 1st mortgage is $1744, and my 2nd is $130. How does that impact the payment? I would assume that the actual expenses are factored in, but I'm trying to understand when you would use the IRS standard (such as for food and clothing of $1186), and when you would use actual expenses. In other words, does the IRS value provide a guide? Is it a maximum?

Thank you so much for your posts.

[momofthree]

I am just starting to consider my options. In fact, this is the first forum I have found when trying to learn more about the Chapter 13 consequences/benefits.

Also with a family of 5, I looked at the link you (momofthree) posted for the US Trustee (Census Bureau, IRS Data & Admin costs). For NY state, the "housing and utilities" allowance for a family of 5 in my county is only $1231. However, my 1st mortgage is $1744, and my 2nd is $130. How does that impact the payment? I would assume that the actual expenses are factored in, but I'm trying to understand when you would use the IRS standard (such as for food and clothing of $1186), and when you would use actual expenses. In other words, does the IRS value provide a guide? Is it a maximum?

Thank you so much for your posts.

Now that you quoted me, I see I messed up on the numbers that I posted for food and clothing for a family of 5. I accidentally put the numbers for a family of 4 in that post. Whoops! It's actually higher. (still $1186 total though)

You are allowed to claim your mortgage amount on the means test even if it's over the county allowance. That allowance on the trustee website is based on rent.

You will use your actual expenses on your schedule J. Depending on your trustee you may or may not be allowed to claim higher food allowances and such on your schedule J. I know some have said they did without any problems and others have had issues, so it varies by district and trustee. As a general rule though, the IRS standards for food/clothing, transportation, medical, etc that they have listed are maximums unless you can show a particular need to have them higher (special dietary needs due to a medical condition, or proof that your monthly medical expenses exceed their allowance, etc.)

[BKchapter13]

The trustee wont let you starve, she will modify your plan so you and your family have enough money to live on moderately comfortable, things may be tight but they are not going to let you suffer that much.. dont hesitate when they ask for your daily expenses, put down everything, haircuts, movies, copays, and school activities and so on. they will figure out a good plan for you and your kids. Again, good luck and best wishes