Preparing for Ch13--Budgeting ?

[boochase]

While preparing for CH13, I been looking at my expenses and deciding if I should cut anything any further. First, should I bother at all? Seems that if I do, my payment to the trustee will go higher. On the other hand, it is possible that the trustee finds that some of my expenses are "too high," and my payment would be higher anyway. Second, I would like comments on some of my proposed cuts:

1. Going to one car: We could do it. We would save over $500.00 per month with gas, insurance, lease payment. It is inconvenient but would this be necessary within the scope of filing Ch13?
2. Life Insurance: Have term life insurance that expires in 15 years for me and 8 years for my wife (when you reach 65, the company no longer insures. The premium is about $150.00 per month.
3. Land line at home: Would save about 50$ per month. My wife doesn't need it, but I do. I am severely hearing impaired and need the land line to make business calls (using the 711 relay service). We also have cells, but I use mine to make calls using assisted listening (which is not as good as the relay so I only use it to phone my wife, family or friends) and I really use the test messaging. If I give up the land line, my wife would have to make all of my business calls.

4. We do not have full cable; what cable we do have is included in our HOA fee.
5. There is really no other amenities to give up.
6. If I have to stop paying a "necessity," I assume that I would stop paying the mortgage first. It would trump electric, water, HOA, land line (if we keep it)/cell phone. Already stopped paying the CC's and other than the mortgage we have no other debt.

Should these decisions be made BEFORE filing Ch13? If not, during, after the Meeting? I do appreciate the words of experience from everyone.

[BNKRPTinNC]

We cut everything we could prior to filing and our 341 went thru smoothly with just a slight glitch prior to confirmation. I would think that if there is any question as to what, if anything, "goes next" would be addressed by your atty. If you can keep what you now have and are able to make cuts after your confirmation that, IMHO, would be the way to go as you can start saving for those situations that always seem to come up.

[momofthree]

I wouldn't recommend following thru on any of your suggestions. Like you said, all that will do is increase the amount you pay to unsecured creditors. There is no reason to sacrifice a car, life insurance, or other "necessities" before filing.

[Universal]

We did drop Direct TV before seeing an attorney. The rest of what was deleted was determined with the help of the attorney.

[SMinGA]

Just my opinion- not intended as legal 'advice'...

CH. 13 is not about living bare bones for 3-5 years. It does involve giving up some extras though. The things you have described do not sound like extras.

The going to one car decision - that is bigger than the other items you mentioned. If I were in your shoes I would NOT give up the land line, the life insurance, basic cable. Seems pointless and in some cases could be disastrous.

As to whether or not you need to give up the 2nd car... Are you needing to create more DMI for a feasible plan? IF so, this could be a useful alternative if you think you can make it for 3-5 years. We have done w/ one car before - though not easy we managed as hubby & I were on opposite work schedules. And in most cases we had friends or family who could help out when the kids needed to be picked up unexpectedly, or for doctors visits & such. (Otherwise the one who was at work w/ the car would have missed time from work...) But I don't know your routines, and if you have 'help' to fall back on when needed.

If you already have enough DMI to fund a feasible plan - I don't think its necessary to look for ways to make your life harder. Giving up the 2nd vehicle in that case, just to make more DMI, doesn't make sense.

[SMinGA]

I do think its a good idea to make adjustments and start 'living' your budget before filing. That way, you can know what is reasonable, and identify any areas that were not realistic. Once you file, it can be time consuming to make changes to your plan.

Here are some examples of the things we did, to address budget issues such as spending more than we were earning!

*Started making weekly meal menus, and shopping from a grocery list. Helped to avoid wasteful/random spending at the grocery store.
*Severely cut back on eating 'out' to the extent that instead of being a regular thing to bring home fast food for dinner or go out to eat, those are no longer a normal part of our routine. WE still do on occasion - but not often.
*Bought more store brands where possible. THere are some things that I won't budge on, but in many cases the store brands are just as good.
*Cut back on our cable/internet & cell plans.
*Cut back on entertainment spending... Plenty of 'recreation' can be found for cheap or even free.

[Universal]

SM, I always enjoy the hints and examples, even though we are into our plan, they are good reminders. We are still adjusting to a budget and advice is always welcome.

[Pandora]

Just my opinion- not intended as legal 'advice'...

CH. 13 is not about living bare bones for 3-5 years. It does involve giving up some extras though. The things you have described do not sound like extras.

....As to whether or not you need to give up the 2nd car... Are you needing to create more DMI for a feasible plan?

...If you already have enough DMI to fund a feasible plan - I don't think its necessary to look for ways to make your life harder. Giving up the 2nd vehicle in that case, just to make more DMI, doesn't make sense.

I agree with all of the above - if you are already in a feasible Ch. 13 plan - dont mess with anything and rock the boat, it will only allow more DMI to be paid back to the creditors. Wait until after your confirmation hearing and at least 6 months down the road after that before making any changes to anything. Any serious changes (like $500 a month savings from getting rid of your car) should be reported to your trustee and an amended plan done. You're not supposed to sell any items without the trustee's permission during your plan....and if you do, it can make your DMI go up.

I'd wait.....and talk to your attorney on how to proceed ;)

[boochase]

I agree with all of the above - if you are already in a feasible Ch. 13 plan - dont mess with anything and rock the boat, it will only allow more DMI to be paid back to the creditors. Wait until after your confirmation hearing and at least 6 months down the road after that before making any changes to anything. Any serious changes (like $500 a month savings from getting rid of your car) should be reported to your trustee and an amended plan done. You're not supposed to sell any items without the trustee's permission during your plan....and if you do, it can make your DMI go up.

I'd wait.....and talk to your attorney on how to proceed ;)

Fortunately, a lease is not considered a debt, at least in FL. So leasing is simply an expense.