Budget - thoughts!

[bugasbaby]

I've been lurking around for a while and we are still considering the BK 13 route. I've done the NOLO means test and came up with about $ 420 to pay monthly...the attorney we spoke with said 100% pay back...I just don't see it...I received a bonus, after taxes, of $13,500 this year (I know if I still receive these over the life of the plan I will have to give them to the trustee) I would appreciate any thoughts regarding my proposed budget. Thanks

Net Income Monthly $4,910
NY Resident - family of 3

Mortgage: $936
Co-op Maintenance $765
Homeowner's insurance: 40
Electricity: 100
Cell phone/pager: 105
Cable/Internet/Phone 175
Home Maintenance: 100
Food: 500
Household items (non-food items): 100
Hygiene supplies: 50
Clothing: 100
Laundromat, detergent, softener, etc.: 40
Prescriptions and "OTC" medications: 75
Recreation & entertainment: 125
Presents for holidays, birthdays, etc.: 100
Charitable contributions: 22
Auto Insurance: 140
Car Payment $ 521
Gasoline: 160
Tires: 25
Auto repairs: 50
Vehicle maintenance: 50
Vehicle tax & registration: 30
Haircuts: 25
Work lunches: 125
Pet food/supplies: 40
Total living expenses $4,499

[SMinGA]

Overall I don't see a significant problem. Work Lunches + Food = $625, is that within the IRS guidelines for a family of 3?

Recreation/entertainment @ $125 for 3 could be deemed too high. I think $75-100 is the norm, even for larger families.

Other than that, make sure you are using the correct income figures. At your current net, do you generally receive a tax refund or owe? You may need to adjust withholding to aim for as close to even as possible. And is that an actual monthly average? If you bring home $2455 every 2 weeks for example, then your monthly net is not $4910. Its actually $5319.

Also make sure the atty is not counting your bonus in your monthly income for schedule I, if it is a one time thing and not guaranteed to repeat. You'd want it stipulated that any bonus gets forwarded to the trustee but not want that in your monthly payments. If your atty is calculated it wrong, that could be why your atty thinks you could/should pay an extra $1175/mo beyond what you calculate.

[SMinGA]

I noticed an earlier thread where you mentioned 401k loans. It will probably be written into your plan that when the loans are paid off, your payment to the trustee increases by the same amount.

[NoMoreCards]

I may be off base here, as I have never had any type of HOA. However I thought that was to cover home maintenance. If that is true, you possibly (although unlikely) may get questioned about the additional 100.00 for home maintenance.

Just a thought.

[bugasbaby]

Thanks SM....I get paid every two weeks and hubby gets paid every week...So I get $1,655 every two weeks and he gets $400 a week. Ok I just figured it out...I see where you get the $ 5,319.00.

Attorney did say they will step up the payments when the loans come off..which I am fine with...I am not looking not to pay back what I owe and if they want it they can have it!

Thanks again for your input!!

[bugasbaby]

NoMoreCards - the co-op maintenance covers gas (heat, hotwater, cooking gas), insurance for the outside, property taxes, water, and any repairs outside of the home...the inside is my problem. Thanks for the input!

[NoMoreCards]

Oh, ok! Thanks for the clarification. I didn't understand how that worked.

Makes sense now.

[bugasbaby]

You learn something new everyday...I know I do!!

Thanks again.

On the bonus...I am actually waiting until September to file so the bonus from February can roll off...that way the number won't be figured into the monthly payment.

I have another question...I am so in need of answers LOL...say I have a plan confirmed for $700 a month then the step ups when 401k loans come off. Is there a number to unsecured they "confirm"...like I owe $130,000...and they say I have the pay back is 50%...or $65,000. If I continue to get the bonuses I will turn them over to the trustee...do I keep paying until I get to $65,000 OR do they take more since I am"coming into" money?? Dothey make me pay back the 100%...If I continue to receive the bonuses, which would be great, I think I would be done paying back at 100% in less then 5 years...which would be awesome.

I am starting to feel a little better about this whole process...at first I was so confused...I thought I would have to pay about $2200 a month to trustee which I know I do not have available monthly. I've beena complete wreck over the past few weeks...I am realizing there is a light at the end of the tunnel and it wasn't there a few weeks ago.

Thank you all for your input!

[SMinGA]

Having one paid bi-weekly and the other spouse paid weekly helps on the budget process, in my opinion. Here is how we do it:

Most bills are monthly. Those tend to come from my paychecks as I'm paid bi-weekly. Then there are expenses - groceries, gas, etc. that are ongoing. Its not like we only buy groceries 1-2 times a month, we do that weekly! Those things come from Hubby's pay as he is paid weekly. We assess what we spend weekly on those items then convert that to a monthly #. (Like $135/wk for groceries would be $585/mo.)

The downside to getting paid every 2 weeks and having a monthly budget is that in a common 4 week period you only get a net of $3310 but your monthly average is $3585. The trick to making that work, I think, is taking some things out of the 'extra' 2 checks you have each year rather than equal amounts each & every month. Like holidays/gifts, clothing, car maintenance. You factor these in with a monthly average, but you probably don't spend an equal amount each month. More likely to be several major purchases in those categories each year.

For us, it really helps that hubby is paid weekly though and that we're not on the same pay 'schedule'. You should also think about how you want the plan payment deducted. You may find it easier to have equal amounts taken out of each of your pay checks, rather than a whole monthly payment at once.

Thanks SM....I get paid every two weeks and hubby gets paid every week...So I get $1,655 every two weeks and he gets $400 a week. Ok I just figured it out...I see where you get the $ 5,319.00.

[SMinGA]

My understanding is the % payback is insignificant really. Its a statistic, nothing more.

If you do get bonuses, etc. then your unsecured would end up getting more than originally predicted. If you reached a point where they could get 100%, you'd be done early. But still might have to hassle your attorney to file paperwork to make that official.

And if some of your unsecured creditors don't file claims - you could reach 100% earlier than originally anticipated.

[bugasbaby]

Hi SM - Thanks that's a great thought...I was hoping I could send the payment to the trustee every two weeks when I get paid. I am not sure if they will take them or if I will send them.

Right now we do food shopping with hubby's pay...we are starting this budgeting the first week of May...so I will have a few months before we file to work out any kinks. July is a three payment month...so that's where I can "stock up" some funds!

I see you are planning to file at the end of 2010 also...have you retained an attorney? How are things going?

Thanks again for your kindness!

[bugasbaby]

Thanks again...I wasn't sure if payments, less the bonuses, were confirmed for less than 100% would I still have to pay the 100%...but I guess with 13 if over the 5 years youc an come up with the whole thing they'll want it and take it....I'm ok with that too..

[SMinGA]

We are working on a couple things - trying for an inhouse mortgage modification, and saving $ to get reliable transportation. Need to resolve those 2 areas before filing.

The mortgage mod would change our DMI but also our priority debt - allowing us to do a 3 yr plan instead of 5. We are below median, so eligible for 3. But with the current mortgage payment & arrears we don't have enough DMI to resolve it in 3 yrs. Increase DMI by lowering mortgage, and reduce priority debt - and we can be done in 3.

But if that does not work out, we can do a 5 yr plan.

I see you are planning to file at the end of 2010 also...have you retained an attorney? How are things going?

Thanks again for your kindness!

[SMinGA]

Just had one other thought - I noticed you indicated you're a family of 3 so I assume one is a child. I didn't see any school/education expenses listed. School supplies and such...

Since you have time to work with, and to live in your budget, its also a good time to make sure you're realistic and not overlooking anything. Its much better that way than putting a budget on paper and having to live by it immediately, no matter how realistic or accurate it is!

[JEM]

Just had one other thought - I noticed you indicated you're a family of 3 so I assume one is a child. I didn't see any school/education expenses listed. School supplies and such...

Since you have time to work with, and to live in your budget, its also a good time to make sure you're realistic and not overlooking anything. Its much better that way than putting a budget on paper and having to live by it immediately, no matter how realistic or accurate it is!

Butting in here...

I have very little listed in our "mock schedule J" for school/education expenses for my 2 elementary school kids. Is there a guideline amount? This is something I've been meaning to get clarification on.