How to bring NDI down?

[smkrishna]

I am planning to go for Ch.13 in 2 or 3 months time. When we did rough budgeting, my attorney says that I need to bring my NDI down or otherwise, I will have to pay more in 60 months payments.

I already put 401(k) from my salary. I put 4% of my salary towards 401(k). Can I increase my contribution from 4% to 8%? What is allowed limit for Ch.13 with respect to 401(k) contribution? If I increase my 401(k) contribution 2 or 3 months before filing, will it create any issue?

Is there any savings plan or ways that anybody knows where we can start putting our money that will be exempted (like annuity) and considered expense also???

[justbroke]

I already put 401(k) from my salary. I put 4% of my salary towards 401(k). Can I increase my contribution from 4% to 8%? What is allowed limit for Ch.13 with respect to 401(k) contribution? If I increase my 401(k) contribution 2 or 3 months before filing, will it create any issue?

There's no magic number. However, a general guideline that Trustees have used is to limit the contribution to the point where your employer stops providing a match. Most employers match to 6% so that seems to be the number that works. Of course, this may vary in your particular district, so ask your attorney. If you increase it 2-3 months before, that's also a district specific question. I have read a case where a person change it significantly a month before filing and was still allowed the new percentage! Your mileage will vary.

Is there any savings plan or ways that anybody knows where we can start putting our money that will be exempted (like annuity) and considered expense also???

No. There is only one "savings" plan allowed by law and that's the retirement accounts (like 401(k)s).

I wish I had some hints for you. The 401(k) contribution increase may work. Other than that, all other "expenses" are based on family size, State and county of residence. So unless your family size changes, I don't see how to "increase expense" in a Chapter 13.

I think "increasing expenses" in a Chapter 13 is self defeating anyway. Sure, a 401(k) contribution is fine, but increasing expense (I mean actually incurring additional expense) just to decrease disposable monthly income (DMI) seems counter intuitive to me. Now... finding additional expense deductions for expenses you already incur... that would be reasonabloe.

[SMinGA]

Take some time to think about where your $ goes, and not just the regular monthly things. Utilities, housing, groceries, etc. are easy. What about things that happen irregularly but should be considered? Vet bills, school clothing & supplies for the kids, car repairs, annual ad valorem vehicle taxes, etc. For each, divide the annual estimate by 12 for a monthly figure.

[LEINSTRIPPIN]

I am planning to go for Ch.13 in 2 or 3 months time. When we did rough budgeting, my attorney says that I need to bring my NDI down or otherwise, I will have to pay more in 60 months payments.

I already put 401(k) from my salary. I put 4% of my salary towards 401(k). Can I increase my contribution from 4% to 8%? What is allowed limit for Ch.13 with respect to 401(k) contribution? If I increase my 401(k) contribution 2 or 3 months before filing, will it create any issue?

Is there any savings plan or ways that anybody knows where we can start putting our money that will be exempted (like annuity) and considered expense also???

We are in Florida. My atty told me to put as much as I can and still have
$200 disposible income. My husband is now contributing 32% per pay period to his 401K! We are filing in the next 2 weeks or so we will see if it flys. Our atty. does not seemed concerned about it. We did start the increased contribution in Jan. to get used to our new budget. my hubby will have a fat 401K if this all goes as planned!

[justbroke]

We are in Florida. My atty told me to put as much as I can and still have $200 disposible income. My husband is now contributing 32% per pay period to his 401K! We are filing in the next 2 weeks or so we will see if it flys. Our atty. does not seemed concerned about it. We did start the increased contribution in Jan. to get used to our new budget. my hubby will have a fat 401K if this all goes as planned!

I'm in Florida too. I would be surprised if a 32% 401(k) contribution is acceptable. I guess your attorney is going for "attrition" where you list tons of expenses and hope only some of them are questioned.

[LEINSTRIPPIN]

I'm in Florida too. I would be surprised if a 32% 401(k) contribution is acceptable. I guess your attorney is going for "attrition" where you list tons of expenses and hope only some of them are questioned.

I asked him several times, as I am wondering also. I guess we will find out soon enough!

[NoTomatoCan]

32%! You have to report back and let us know how that goes! I am just hoping my "paltry" 14% that my wife and I have been contributing for the past few years gets to stay!

[LEINSTRIPPIN]

32%! You have to report back and let us know how that goes! I am just hoping my "paltry" 14% that my wife and I have been contributing for the past few years gets to stay!

I will, as I am really wondering myself it is going to work!

[justbroke]

I will, as I am really wondering myself it is going to work!

Is your husband filing with you? If not, then this may actually work. They can't tell your non-filing spouse what to do.

[LEINSTRIPPIN]

Is your husband filing with you? If not, then this may actually work. They can't tell your non-filing spouse what to do.

Yes, he is.

[smkrishna]

I am scared about increasing my 4% contribution to 8% as my employer matches only 4%. Doubling the 401(K) 2 or 3 months before filing could triggger doubts in trustee's mind, right?

[LEINSTRIPPIN]

I am scared about increasing my 4% contribution to 8% as my employer matches only 4%. Doubling the 401(K) 2 or 3 months before filing could triggger doubts in trustee's mind, right?

Or attorney recomended that we do it. He has been a bk atty in this area for 20+ years. So I am going to have to take his recommendation and see what happens! He seems very confident that we will not have any problems. I however, can not say I am so optimistic!

[smkrishna]

There's no magic number. However, a general guideline that Trustees have used is to limit the contribution to the point where your employer stops providing a match. Most employers match to 6% so that seems to be the number that works. Of course, this may vary in your particular district, so ask your attorney. If you increase it 2-3 months before, that's also a district specific question. I have read a case where a person change it significantly a month before filing and was still allowed the new percentage! Your mileage will vary.

Thanks justbroke. I have to find out how increase in 401k contribution works out in my district. And, again, my attorney says whatever I do to show increased expense can be reduced couple of months after filing. If that's the case, then I can try everything possible that is allowed under law like increasing 401k contribution increase.

one[/U] "savings" plan allowed by law and that's the retirement accounts (like 401(k)s).

I wish I had some hints for you. The 401(k) contribution increase may work. Other than that, all other "expenses" are based on family size, State and county of residence. So unless your family size changes, I don't see how to "increase expense" in a Chapter 13.

I think "increasing expenses" in a Chapter 13 is self defeating anyway. Sure, a 401(k) contribution is fine, but increasing expense (I mean actually incurring additional expense) just to decrease disposable monthly income (DMI) seems counter intuitive to me. Now... finding additional expense deductions for expenses you already incur... that would be reasonabloe.

Again, increasing expenses are temporary and for showing to trustee that these are all the expenses so that DMI will be low. It's not meant for permenant increase which of course, I cannot afford.

[smkrishna]

Or attorney recomended that we do it. He has been a bk atty in this area for 20+ years. So I am going to have to take his recommendation and see what happens! He seems very confident that we will not have any problems. I however, can not say I am so optimistic!

Do you live in S.Florida? I just want to make sure that you are not talking about the same attorney that I refer to also. My attorney is also very confident. I thought I am the only person who is not so optimistic and unsure.

[sheilaE]

Do you have children? Just yesterday my atty mentioned a plan 529. It's a College savings fund for the kids. He said it was exempt. Has anyone else heard of this? Going to look futher into it. We have 1 already in Jr. College and even that is $$$!