Chapter 13 DOs and DONTs!!!

[kolCh13]

Thank you all very much for your great responses. I gained so much knowledge from this forum that I cannot even imagine get it from 20 Attorneys.

Thanks again!!!

[kolCh13]

Back to the OP's questions, my answers are based on my own experiences.

1. Yes, replace the cars, but as SMinGA said, be reasonable. Don't go buy a Mercedes with an $800 per month payment. Try to finance as little as possible and definitely keep your car payments at or below the IRS standard for a 2-car household.

2. There's nothing that says you can't take a vacation for the next 5 years, you just have to save like a maniac and plan and budget. But I agree with the poster who asked how you are going to pay for it if you take one now. DO NOT rack up your existing credit cards on a lavish vacation and then file for BK a few months later. You will get raked over the coals.

3. Yes, if you know you are going to file, stop paying on your credit cards (I won't advise on the mortgage, I don't have one so no experience there). Use the money for new appliances if you must, but honestly, I would save it. Start a mattress fund. That is what my atty advised me to do (of course, you should do whatever your atty advises). There were 5 months between my initial consult with my atty and the day I filed. I stopped paying on everything during that time and used some of the money to pay atty fees and socked the rest away in a fireproof safe I bought at WalMart. It's my emergency fund and I don't touch it, only add to it whenever I can. Personally, I wouldn't buy any new appliances until the old ones actually die. Who knows, they may have more life left in them than you think. And if not, then you'll have an emergency fund when they do die so it'll be no biggie.

4. See #3 above.

5. This is totally up to you. Once you stop paying, you will receive nonstop calls from creditors. One way to get them off your back, if only temporarily, is to tell them you are filing for BK and give them your atty's name and number. You don't have to tell them when you are filing. It may hold off a few from filing lawsuits as well, giving you more time to plan and save. So it's your call.

Hi Lissy,

what do you mean by "keep your car payments at or below the IRS standard for a 2-car household."? If I have 1 car paid off and want to buy another since we both work, can we get the IRS standard which is $992 (in my county) for 2-car household?

Thanks for your help!

[catleg]

Yes but I wouldn't finance the second car for the whole $992.
In my case it was easy, I bought 2 cars with 6 year financing about a year before we filed. Simple that way.
What I'm wondering about is whether this gives me optionality in case I crash either car or one of them turns out to be a lemon, can I just give the keys back to them and tell them to go pound sand for the rest of the loan?
I'm curious what would happen then.