Help from family

[Pandora]

I'd have the attorney remove the car from your plan - you can still take the allowed amount, but you're basically just paying the trustee $ to include that payment in your plan. Given you're current...no reason to have it in the plan. Wont change your overall $ amount, but it will give less to the trustee. Thats confusing to say the least - I'd definately ask your attorney as to what the benefit is to having your car payment in the plan vs. out of it. Remember they work for you - and although they know the law - sometimes what they think is best, isnt.

As mentioned earlier - that 19% to unsecured had to result from exempting something major - Know you said you protected your savings 100% - I dont know how the trustee will look at having savings vs. using it to pay creditors, but it could be that thats part of the issue. Having to pay back almost 35K to a 48K unsecured is pretty high on top of secureds.

[justbroke]

If you haven't filed yet and you're paying 19% to unsecured creditors and have no money to pay your allowances (food, clothing, shelter, car expenses, health care, etc), then there is something wrong with your proposed plan. Please sit down with the attorney and address this issue.

[minan]

Justbroke: She filed on Friday so it's filed now. We were trying to make the make deadline so that we could use the Jan-Jun as the 6-month look back period. I had two months where I did not get paid so the higher income in May, leveled out those two months. I'm already sent her an email requesting a meeting next week.

I was a failure at the self-employment endeavor. I made every known mistake. That is how I got in this mess with the IRS. After the 2nd levy, I had no choice because the tax atty I hired couldn't get them to work with us. I don't have the cash to pay back $127 (total between state and fed).

I am self-employed until 8/9. If the background check goes well, then I'll be a W-2 employee starting on 8/9 and I will never again attempt going into business for myself. So my income is going down. I still got a good salary, however that's where things may be screwing me in this numbers game of chapter 13.

[minan]

I'd have the attorney remove the car from your plan - you can still take the allowed amount, but you're basically just paying the trustee $ to include that payment in your plan. Given you're current...no reason to have it in the plan. Wont change your overall $ amount, but it will give less to the trustee. Thats confusing to say the least - I'd definately ask your attorney as to what the benefit is to having your car payment in the plan vs. out of it. Remember they work for you - and although they know the law - sometimes what they think is best, isnt.

As mentioned earlier - that 19% to unsecured had to result from exempting something major - Know you said you protected your savings 100% - I dont know how the trustee will look at having savings vs. using it to pay creditors, but it could be that thats part of the issue. Having to pay back almost 35K to a 48K unsecured is pretty high on top of secureds.

Won't Honda repo it? That's what I'm afraid of. One morning I go to my carport and the car is gone. I don't have the money to get it back if this happens.

[minan]

I'd have the attorney remove the car from your plan - you can still take the allowed amount, but you're basically just paying the trustee $ to include that payment in your plan. Given you're current...no reason to have it in the plan. Wont change your overall $ amount, but it will give less to the trustee. Thats confusing to say the least - I'd definately ask your attorney as to what the benefit is to having your car payment in the plan vs. out of it. Remember they work for you - and although they know the law - sometimes what they think is best, isnt.

As mentioned earlier - that 19% to unsecured had to result from exempting something major - Know you said you protected your savings 100% - I dont know how the trustee will look at having savings vs. using it to pay creditors, but it could be that thats part of the issue. Having to pay back almost 35K to a 48K unsecured is pretty high on top of secureds.

I've already written down a list of questions and this is one of them - why not leave the car out?

That's what i thought re: the savings, however the attorney put the savings on the schedule C.

My plan was to put 2K in an emergency fund. Use the remaining 18K to payoff the back taxes for State of California since they are easier to deal with. This would remove them from the bk and the focus can be on paying of the IRS. This would reduce my tax debt down to 101K. Interest and penalties listed as unsecured debt and could potentially get discharged.

This is my main objective. I don't have an issue paying back the cc's, but do want to limit the amount so the tax debt can be paid off.

Maybe I'm not smart in bk law, but I thought my plan was pretty straight-forward and ensured both state and fed would get paid back.

[Pandora]

No - Honda shouldnt repo it - you're current on the payments. You shouldnt have to sign a reaffirmation agreement either, but then again, that could be state/district specific as well. Also could be that your car being included IN your plan is also state/district specific. Something I'd be sure to ask your lawyer. Our car is paid outside of our plan as it did not benefit us to pay it inside the plan and the trustee would just make more.

So you've exempted 20K in savings - then that can be the issue as to where your 19% is coming in. Remember just because its on your schedules right now doesnt mean the trustee wont file objections to your plan and exemption amounts. 20K is pretty significant to have given its a savings account and not wrapped up in a retirement account or something along those lines.

Its unfortunate, but when you have back taxes owed, I dont think you can pick and choose which ones go into your plan and which ones dont. I believe that would be considered preferential payment - but I'm not certain on that as given its taxes and a priority claim, it may be viewed differently. Our entire 13 is based on our 2nd mortgage, attorney and trustee fees, so I cant help you there, but I'm sure others can.

[momofthree]

I'm not sure the 19% is coming from the savings....CA has a wildcard of over $20k in addition to all the other exemptions (which are quite generous). Do you have other non-exempt property or equity in a home (which might mean you can't use the wildcard)?

I'm just confused as to how they can make you pay back anything to unsecured. Do they have your income wrong?

[minan]

I'm not sure the 19% is coming from the savings....CA has a wildcard of over $20k in addition to all the other exemptions (which are quite generous). Do you have other non-exempt property or equity in a home (which might mean you can't use the wildcard)?

I'm just confused as to how they can make you pay back anything to unsecured. Do they have your income wrong?

Momofthree: I have no other property - just condo, car and bank account. All the household furniture is now worth way less than what I bought it for. I have no expensive art or jewelry. I have no 401K or any retirement account so I have nothing else.

I'm so confused. Now I feel like I'm in a worse mess.

The only positive is that none of the creditors can do anything right now.

[Pandora]

I'm not sure the 19% is coming from the savings....CA has a wildcard of over $20k in addition to all the other exemptions (which are quite generous). Do you have other non-exempt property or equity in a home (which might mean you can't use the wildcard)?

I'm just confused as to how they can make you pay back anything to unsecured. Do they have your income wrong?

I think you may just have hit it Momof3 -...


Income....

OP stated

"...We were trying to make the make deadline so that we could use the Jan-Jun as the 6-month look back period. I had two months where I did not get paid so the higher income in May, leveled out those two months.....I am self-employed until 8/9. If the background check goes well, then I'll be a W-2 employee starting on 8/9 and I will never again attempt going into business for myself. So my income is going down. I still got a good salary, however that's where things may be screwing me in this numbers game of chapter 13."

They're going off of her old income - not projected future.

Could this be the issue? I thought under the new law that just went into affect (somewhere there is a sticky) it stated that projected future earnings could not be used as a basis to repay ????

ETA: does your condo have any equity in it?

[justbroke]

There is caselaw that support the "forward" looking aspect. Form B22C (the Means Test for Chapter 13 filers) is used in most District to determine the disposable monthly income. However, this income test could use prior income that is not forward looking. Also, the debtor, if self-employed, may have calculated some things wrong like payroll tax for self-employed (the other half of the social security tax at 7.5% or more).

In any event, the disposable monthly income (DMI) number of Officlal Form B22C should not be used if your income is changing! My B22C showed about $60/month in positive DMI, while it was actually $-400(+). So the Trustee always showed me paying $60/month more when it was inaccurate so I just ignored it. Mine was due to income from my investment property that I was surrendering.

Please don't get a plan confirmed that you cannot afford. Ask your attorney if they'll fight the number on form B22C because the code is clear... it's your projected disposable monthly income. That means it's not "really" based on the past.

[Pandora]

yeah..what he said - I just went back and found the sticky - it was something different regarding the 6 month look back, etc.

here:

http://www.bkforum.com/showthread.php?t=57848

[minan]

I think you may just have hit it Momof3 -...


Income....

OP stated

"...We were trying to make the make deadline so that we could use the Jan-Jun as the 6-month look back period. I had two months where I did not get paid so the higher income in May, leveled out those two months.....I am self-employed until 8/9. If the background check goes well, then I'll be a W-2 employee starting on 8/9 and I will never again attempt going into business for myself. So my income is going down. I still got a good salary, however that's where things may be screwing me in this numbers game of chapter 13."

They're going off of her old income - not projected future.

Could this be the issue? I thought under the new law that just went into affect (somewhere there is a sticky) it stated that projected future earnings could not be used as a basis to repay ????

ETA: does your condo have any equity in it?

No equity. It's upside down, however no where near what others on here are facing. I want to keep the condo. I need a place to stay and can afford the payment. I looked at rents in my area and they are close to or higher than my condo. It doesn't make sense to incur the additional costs of moving to end up just renting at the same or close to same amt as mortgage.

[Pandora]

No equity. It's upside down, however no where near what others on here are facing. I want to keep the condo. I need a place to stay and can afford the payment. I looked at rents in my area and they are close to or higher than my condo. It doesn't make sense to incur the additional costs of moving to end up just renting at the same or close to same amt as mortgage.

I agree...

I was just thinking possibly if you had equity if that could be part of the issue.

Think the best thing is what Justbroke suggested - as well as what you're currently looking into with discussing with your lawyer. Would definately look at seeing if you can remove the car to outside your plan. Not that it will change your debt to income ratio at all, but it will prevent more $ to the trustee's % he/she will get long term.

Keep us posted.

[minan]

Thanks! I'm not doing good. I can't stop crying since Friday when this was filed. I feel worse now than before. I thought I would feel some relieve and today I feel worse than yesterday. I can't eat, sleep. Every day since I filed I wake up each morning scared. I can't think about anything else.

Keeping wondering if the attorney and I made mistakes on Friday because we had been going through all the paperwork for two days and were getting tired and worn out. I know it was emotionally draining for me. I cried all the way home.

Looking back I realize now I may have made mistakes on some of the numbers I gave her. Not sure if we can fix the errors now. This stuff is so complicated.

[LadyInTheRed]

No equity. It's upside down, however no where near what others on here are facing. I want to keep the condo. I need a place to stay and can afford the payment. I looked at rents in my area and they are close to or higher than my condo. It doesn't make sense to incur the additional costs of moving to end up just renting at the same or close to same amt as mortgage.

So, if you have no equity in the condo, you don't need a homestead exemption and are probably using the exemption system 2.

That gives you $23,250 to exempt your savings. Do you have savings over that amount?

The car exemption is $3,525. Any equity in the car over that?

Do you have any furniture, appliances, clothing or other household good that is worth more than $550 per item?

Do you have more than $1,425 worth of jewelery?

Do you have tools of trade worth more than a total of $2,220?

Anything else that isn't exempt? A boat? Expensive sports equipment? A Picasso?

Just trying to figure out why you might be required to pay 20% to unsecured creditors. That's the thing that really doesn't make since here unless you are keeping non-exempt assets. Are there any assets listed on Schedule B whose full values (less liens) are not exempted on Schedule C?