Help with my budget...What stays, what goes and what low and high...HELP!!

[Licoriceky2]

[TexasEx]

There are quite a few things here that might be a problem with our trustee (knowing that you are in the same district as me). Before we start nit picking though, why the big rush to file? Are you being sued? Is there another urgent need? Sounds like your attorney might not be so great if they haven't talked to you much about the budget and what our trustee will be ok with or not. That to me would indicate a so so attorney. I would seriously ask myself if this is the right person to represent you or not. Have you had a few more other free consultations with other attorneys?

[SMinGA]

Here is what stands out to me as areas you will have trouble, and you're ~$2,000 overbudget. You MUST learn how to live in your net income:

You can't budget for savings. All disposable income goes into the plan. There is $100. And 'vacation savings' of $67.50. Don't think that will work.

"Other eating out" $216.66 seems excessive, as if you're saying you are entitled to eat out regularly.

Pet food of $110/mo. You may need to find a more basic brand of dog food.

Make up & hair/nails at $40x2 = $80 a month.

Fun/Entertainment for $150, this seems excessive for 2 adults.

$145 total clothing for you, plus $35 monthly for shoes. Excessive, if you ask me. I understand having to spend some small amounts monthly, but over $2000 a year?

Church/charity - ok as long as you have a paper trail to show you actually have been paying this.

By cutting pet food & fun & clothing/shoes in half and removing the others, you cut out nearly $700. Not enough to fix your budget. You'll have to find ways to cut in bigger ways, and that will be hard w/ $1800 mortgage and childcare that you can't cut.

Does your husband get a per diem for his on the road expenses? If so, did you by any chance forget to include that? You can look into applying for WIC to help w/ the formula. I don't know if it is income based or not.

[Licoriceky2]

Hi TexasEx! I sent you three message...it was too long to fit into one LOL...the reason I am in a "hurry" is that I work for an atty (Family Law and Criminal) and I cannot risk getting sued as I would lose my job that I love so much with my atty, not to mention how disapointed and embarrased he would be to see me get sued. Some cards and debts are going on three months deliquient.

Quite honestly we have no money in which to pay another atty and I like this gentleman that I am using but the one, and only time, we really discussed a budget he seemed me "creditor" friendly, but then again maybe he realized really quick that our "budget" was greatly lacking. We are supposed to meet with him on Friday morning to sign the petition and give him the budget. I suppose at that time he will really look it over and make suggestions...

What happens if the trustee does not approve of an item(s)? what happens and how many times can you resubmit a budget?

Let me know if you did not get all three emails....they were extenstive...

[SMinGA]

Filing when you do not yet know how to live with the cash flow you have - I agree that filing is a poor idea. Once you file, you have to do it right. Meaning no more debt, no more do-overs.

[momofthree]

Wow, that's quite the list, and you'll need to break that down into categories. I can already tell you that $350/mo for clothing for a family of 3 probably isn't going to fly, same with all of the personal-care-type expenses, and probably not the eating out--that will need to come out of your regular grocery budget.


The lines on a schedule J are composed of the following:

1. Rent/mortgage
2. Utilities:
a. electricity & heating fuel
b. water & sewer
c. telephone
d. other
3. home maintenance (repair and upkeep)
4. food
5. clothing
6. laundry & dry cleaning
7. medical & dental expenses
8. transportation (not including car payments)
9. recreation, clubs & entertainment, newspapers, magazines, etc.
10. Chartitable contributions
11. Insurance (not deducted from wages or included in home mortgage payments)
a. homeowners or renters
b. life
c. health
d. auto
e. other
12. Taxes (not deducted from wages or included in home mortgage payments)
13. Installment payments
a. auto
b. other
14. alimony
15. payments for support of additional dependents not living at home
16. Regular expenses from operation of business, profession or farm (attach detailed statement)
17. other
18. other
TOTAL =

As you can see, they don't want to see a large breakdown like you've provided.

Check out the IRS max allowances, which include (for a family of 3) are as follows:

food: $626 (this would include eating out)
Housekeeping supplies: 61
apparel & services: $209
Personal care products and services: $56
Misc: $197

Total: $1152

It looks like on your budget you have about $1500 in this category, not including the $435 in "baby expenses" for nearly $2000/mo. You'd be looking at some pretty major cutbacks in this dept.

You are allowed $120/mo for medical, and you only have $85 listed, so that could help buffer some of your above expenses.

$390 for phones, tv, & internet may also raise some eyebrows.

As a side note, you can usually add a child-rider onto your term-life policy. Whole life policies, especially for babies are a huge rip-off. I don't think the trustee will object to it, but that money would be more profitable if you invest it rather than purchasing a whole-life policy.

[SMinGA]

What happens? One of two things pretty much.

1. the trustee challenges some items and can push you for a larger plan payment; if you end up with a higher payment than you can actually manage your plan would fail.

2. the trustee deems your plan is not feasible - meaning he/she believes its not possible for you to make the plan payment AND cover your living expenses. It gets dismissed, any atty fees you have paid are pretty much wasted.

Is your home just one mortgage, or are there more? If more, what is the value of the house and what is the amount owed in the 1st mortgage? Have you considered that this house may be more than you can afford? After house & recurring bills, and childcare, you only have about $1400 left. For gas, groceries, baby-supplies, regular expenses (occasional clothing, house hold supplies, etc.) there just might not be enough left for a plan payment.

[NoTomatoCan]

What makes you believe that you are going to be sued ASAP?

I don't know your particular situation, but 3 months seems pretty quick for the lawsuits to start flying.

As SMinGA points out, you need to have a workable budget. Otherwise you are simply setting yourself up for failure.

[TexasEx]

Agreed with NotomatoCan on getting sued so quickly. We went almost 6 months without paying and besides annoying phone calls and letters we did not hear anything else from them. You can also buy yourself some time by retaining a lawyer but not filing. If you tell your creditors that you have retained a lawyer 9 out of 10 times they will stop contacting you since they will know then that you are probably about to file and move on to another account they can collect upon.

[momofthree]

Okay, I just added up your totals, and you have $7300 of expenses listed, and $5300 of income. That is $2000 per month that you're overspending. That's huge! It's probably time to write down necessities vs. wants. Things like cell phones, cable tv, and eating out have come to be considered needs when, in reality, they are wants. Your budget contains a lot of wants that could potentially be cut out if you're really serious about re-arranging your financial house. If you're not really serious, then your bk will fail pretty quickly...

[sheilaE]

SMinga, Re:
2. the trustee deems your plan is not feasible - meaning he/she believes its not possible for you to make the plan payment AND cover your living expenses. It gets dismissed, any atty fees you have paid are pretty much wasted.

What happens if it's dismissed? Does that mean you can't file and must go back to trying to pay the cc's? Also, I'm confused when I read the following:100% payback & 0% payback. What does 0% mean? Wouldn't that be one that gets dismissed?

The reason I ask all this is because we're a family of 5 and as you already know, I'm worried also about our payback amount. I keep reading different things on here. Does the payback amount need to be a certain $ amount? If we have a lot of expenses that we can claim, can the payback be low or will it get dismissed?

I don't mean to take away from Licoriceky2's question. Just thought this would be a good time to ask.
Thanks!

[SMinGA]

Sheila, if it gets dismissed for lack of feasibility then something is seriously wrong with the #s. Like a guy posted a couple of weeks ago that after his plan payment & mortgage he only had a few hundred a month. That (I think) was for all other expenses.

If the #s can be fixed, then the atty could amend for you before the motion to dismiss gets granted. If its not possible to just correct things on paper (like if there is truly not enough income to pay everything) then the person will need to fix their income/outflow problem. There should not be a bar on refiling, but the atty will likely charge in full again...

[newbie2]

I've just gone through your list of expenses that you detailed and I must say, you were thorough.

However..(yes, there is a however :-) be prepared for your attorney (and if it gets that far) and the trustee to question:

Savings, vacation savings, books, subscriptions, eating out, duplicate clothing categories, duplicate grooming items, and all the other miscellaneous items that aren't necessary to the health and welfare of your family.

When I went through your budget I found $1400 that you could shave each month easily and that was just me spending 3 minutes looking at it. You really need to take a hard long look at where your money has been going. Bankruptcy will not fix problems with needs vs wants and not learning to live within your means.

[HHM]

Like everyone else said, you are over budget.

If this is going to be a chapter 13, you have to show some positive disposable income. So, you are going to have to cut $2,100 from that budget somehow and learn to live that way.

[debtinohio]

I had this issue too and we're still learning to live within our budget.

My suggestion, start with the IRS numbers as a baseline for all the basics and see what you can cut out. Like others said, vacation savings, gifts, entertainment, excessive cellular phone, excessive gas and auto maintenance, etc. will have to go.

It is important to cut these things because you will be over-budget on some important things like your house. My allowance for housing for a family of 5 in my area is $1650, so unless your in NYC, Cali or some other high-rent area you're over on the house too. I wouldn't worry about this as long as you bring everything else under control and submit a reasonable plan.
But, in theory, the Trustee could challenge the house as excessive. It's rare though, but I got that threat since I'm over by $800 on my housing allowance.