Does anyone ever do better in a Ch13?

[needanswers]

In the short term, I would have rather have done the 7 instead of the 13 just to have it over and done with.
But we ARE actually better off in the long run because we can do the lien strip to get rid of our 2nd mortgage. That all by itself is worth doing the 13. But yeah, it's tough sticking to a budget, especially when emergencies come up.

[jange]

jange....just curious, and it's most likely because i haven't but a small clue about chapter 13's...you say you have extra money in your budget right? i thought ALL DMI was supposed to go into the payment plan....????

i have even heard that if you do get even the slightest raise you must notify your trustee and they take even that?? now, what i have been told, may have just been scare tatics...however, it was my general understanding that everything must go into the payoff.

could you explain how that works?

tobee43, as others have already explained, my budget that was set up for the ch 13 doesn't change but that doesn't mean I have to spend everything every month that we put in. My budget has new clothes every month, but I don't actually buy new clothes every month. My attorney gave us some wiggle room. I save money were we can and I am able to put money away every month, some months more than others.
After we were confirmed I specifically asked my attorney if future raises and bonus' would increase my payment and he told me not necessarily. I also asked about tax returns and he told me while the trustee has the right to ask for them, he rarely does. I also asked him if there was anything else that I need to know or do and he told me just to make my payments on time and in the correct amount.
I am in a large city and I am sure the trustee does not have time to check on everyones ch 13.
When I was looking at the calendar for the confirmation hearings there were over a 100 most days and plenty of motions to dismiss for non payment. We have like 5 judges.
It would have been nice to do a ch 7, but like many people we didn't qualify.
filed 1/11/10
confirmed 7/22/10

[tobee43]

tobee43, as others have already explained, my budget that was set up for the ch 13 doesn't change but that doesn't mean I have to spend everything every month that we put in. My budget has new clothes every month, but I don't actually buy new clothes every month. My attorney gave us some wiggle room. I save money were we can and I am able to put money away every month, some months more than others.
After we were confirmed I specifically asked my attorney if future raises and bonus' would increase my payment and he told me not necessarily. I also asked about tax returns and he told me while the trustee has the right to ask for them, he rarely does. I also asked him if there was anything else that I need to know or do and he told me just to make my payments on time and in the correct amount.
I am in a large city and I am sure the trustee does not have time to check on everyones ch 13.
When I was looking at the calendar for the confirmation hearings there were over a 100 most days and plenty of motions to dismiss for non payment. We have like 5 judges.
It would have been nice to do a ch 7, but like many people we didn't qualify.
filed 1/11/10
confirmed 7/22/10

thanks that was very informative...and now i have a better understand how one is able to put a bit aside while in 13.

i also appreciate the fact, everyone's situation is different and what works well for one, may not be the best for another.

thanks again!

[tigergem]

I'm doing great under my plan. Thriving, even, I dare say. I got a complete handle on my budget, am feeling hopeful about my savings, and I have a huge sense of relief for filing dealing positively and absolutely with the pile of carp that was my mountain of debt.

[shockingpink]

We filed Chapter 13 in 2005 and were discharged in 2008. We've spent the last two years trying to rebuild our credit. For us, we were terrified to file but felt there was just no other way. By the time we paid all the credit card bills, there was no money left over for food or gas and we ended up having to charge. Vicious cycle - over and over. Our monthly payment was $800, which was considerably less than we paid each month on credit cards. We kept our mortgage and car out of the BK and paid those directly. Actually, we chose to go with 13 instead of 7 so that we could keep the house and car. Chapter 13 for us was a huge weight lifted off our shoulders. We had to plan ahead because we knew we had to pay cash for anything we needed for the next three years. Our attorney said we could purchase anything up to $5000 - anything over that needed to go through him. I think we bought a refrigerator during that three-year period but nothing else. Before BK we had the notion that we couldn't live without credit cards. This showed us that we absolutely could. We aren't happy that we had to file but we are happy that the option was there. We have three credit cards now but use them very wisely. BK hasn't been a horrible experience for us, but certainly not something we would ever want to have to consider again.

[debtinohio]

We are happy.

We are doing well almost 1 year into our 5 year plan. We have good jobs with good incomes. We're shopping with coupons, shopping at Aldi or Big Lots for food specials and really getting a strong control over our expenses. I love the cash lifestyle, knowing when I buy something that it's mine and 100% paid for is great. We have an emergency fund and have purchased a couple of larger items so far without issue. Our RE Taxes, insurance, etc all rose within the last year and we've had some additional medical costs, but we've managed.

It's not easy everyday, but it sure beats the alternative of $250k of unsecured debt.

[rjd78]

I filed 2.5 years ago. My payments were $230/month, but my car broke down and I had to get a new one. So, my new payments are only $50/month now.

Last year, I had the opportunity to double my income, by basically working a 2nd job. I was terrified that by doing so, I'd be paying more money to the trustee. I told me attorney that I wasn't going to take the contract job if it meant I had to essentially sign the checks over to the trustee. He told me that he's "never heard of a trustee asking for more money because someone decided to start moonlighting." I deferred to him on it, took the job, notified the trustee of the projected increase in salary, and haven't heard a peep from him since.

From what my attorney told me, he said that the plan that I agreed to when I filed is what I'm being held to. And that if I make more money, he "seriously doubts" the trustee will ask for more.

From all the horror stories I've read, it sounds like I have a kick-ass trustee who allows people to use the 13 to get back on their feet and put any additional money they make away. Which is exactly what I've done.

I've been extremely fortunate to get the contract job that I got. Since filing, my income has doubled, and I make twice as much money as I did 3 years ago. And fortunately, I've been able to put a large chunk of that away without the trustee asking for anything. I've also been pre-approved for a home loan, and my attorney is filing a motion to incur new debt; which he says the trustee will most-likely grant.

For me, I would have rather done a 7, but he 13 hasn't been awful. I basically pay my monthly payments of $50, send in my tax returns, and forget about it.

[indebt00]

We are absolutely better after filing ch 13. best financial decision we have made in years. We also had NO choice. We have depleted all our savings and all our credit cards to stay afloat. Our bills were so much more than our income each month I pratically had a break down every time I did bills. so....

to be debt free in 3 years and 9 months

to not stress over bills anymore

to pay cash and buy things as needed instead of on impulse

yes...things are tight, we don't eat fancy dinners anymore, we don't shop as much any more, we are on a strict budget....but its worth it. less stress !!!

[drowningNIL]

We filed a 7 a few weeks ago and I am hoping and praying it goes through and we aren't kicked into a 13.

I think a lot depends on the trustee. I have heard HORROR stories about our ch 13 trustee from a couple attorneys. I think it's crappy that some trustees are looking to gouge and punish people. Ours will take any raises or income over 10% increase. I am not currently steadily working and I inquired about if I got a job to help out our family if we wound up in a 13 would that be a good idea and was told no don't bother because the trustee would take it all. Seems there would be no way to improve the situation if they stick it to us. We were told if the trustee thinks we can afford a $1K/mo payment (AWFUL for us) then she would try and push it to $1600/mo. She'd have us living on pennies because it makes her look good to her boss. She checks tax returns every year, wants info periodically on income and takes anything she can get her hands on.

Shouldn't there be some sort of over seeing done on these 13 trustees? Some people have it much more easy while others really struggle. Seems like it should be more fair across the board.

[jcj112562]

I think my 13 was slightly out of the "norm" in a couple ways. I was never behind on anything, but due to a really nasty and contentious divorce (who would have thought that for supporting a wife completely for the entire 10 months of marriage, paying for a nice new Mustang GT for her, and getting little back aside from her spending on alcohol, she would get 14500 bucks from an actual judge?), I saw that for a year, I would be insolvent, as the "outs" were going to be bigger than the "ins". I did research on the web, bought the Nolo book, and filed Chapter 13 pro se. I made the Plan workable, in fact, not too difficult at all, and started paying my mortgage with each paycheck, splitting the bills, and still wound up with enough income to save about 11000 over 2 years, using a little overtime, tax refunds (Plan pays 100% of secured and unsecured debt). I am now waiting for the October 15th paycheck payment to hit the trustee, after which I will go, withdraw funds from savings, wander into the trustee's office, and drop the entire balance remaining in their hot little hands. This will have the entirety paid off in 25 months.

Yes, I think I have learned a ton through this process, and while I was not the best money manager prior to this, I remain committed to keeping my house in order, and living within my means, only utilizing credit if it is a last resort, and having a sufficient cushion of liquid assets in the event of most emergencies. It gets better, and 13 is not the nasty thing with hairy green teeth that many folks make it out to be. To be sure, it is not an easy thing to do, or to complete, and I know for some, a 7 is most appropriate.

John

[kornellred]

When a Chapter 13 plan is confirmed, it is for a specific dollar amount for a specific number of months. A trustee cannot just demand that all disposable income be surrendered. There must be written orders in the Plan Confirmation document outlining exactly what the trustee expects in the way of reporting income on an ongoing basis. If the debtor is required to submit, for example, a copy of the Federal Income Tax return each year, that will alert the trustee if the debtor's income has increased significantly enough to warrant a plan modification, and the trustee will then have to file a motion in Court to get an increase (rest assured they will never file a motion for a decrease!).

My Chapter 13 Plan Confirmation document does not contain any orders with regard to ongoing reporting requirements. The trustee would have had to make such reporting a condition of confirmation. I make close to $10K more per year now than I did almost 3 years ago when I filed. On the other hand, my living expenses have increased almost as much, but I am definitely getting over like a fat rat in a cheese factory.

But not for long...I am now out of work on medical leave and facing surgery that will make it impossible to ever return to work at the rate of pay that I am accustomed to. My long-term disability insurance will provide 66% of my current salary until age 65, which is 3 years down the road. I would never have volunteered information to the trustee about my pay increases, but you better believe that he is going to hear about my precipitous income drop next year.

[pete42]

I filed chapt13 April 1st 2010 and hired a good attorney which I think is key. He always returns my phone calls quickly and even gave me his cell#. I went from paying $1500/mnth in cc's payments to a $300mnth payment for unsecured. It gave me much more breathing room for strictly living on cash. Although I'm only 6mnths into the plan, it's much easier to manage my money and I haven't had any problems. Stress free!!!

[LadyInTheRed]

Chapter 13 made things much better for me. I was making $450 in monthly credit card payments and was paying $550 on a second mortgage. The end of an introductory rate (from 0% to 21%) on one of my credit cards was about to make my credit card payments increase by about $300. I traded in my credit card payments and $85,000 2nd mortgage for a new car and a $500 plan payment that includes the car payment.

I started the BK with a few hundred dollars in savings and have added at least a couple of hundred dollars a month. When my new car got broken into, I was able to pay $300 in cash to replace the broken window and could afford to increase my insurance to reduce the deductible so I'll only have to pay $100 if that ever happens again. When I got a $400 water bill because I left the water on in the garden when I left town (DUH!), I was able to pay it. My savings is pretty low right now because of those two expenses, but I'll get it back up right after I pay for my 3 cats to get vaccinated.

I got a small raise a week after being confirmed and used the raise to increase my 401k contribution. In 3.5 years, my 401k loan will be paid off and I'll have another $350 per month which does not have to go to the trustee. My plan is to convert that to a 401k contribution or add it to savings.

I am fortunate to have a very stable job and am confident I will have no problems completing my plan. At 41, I am happy to be able to be saving more for retirement instead of working to pay off credit card debt for the rest of my life. I am also $85K closer to paying off my mortgage!

For most people a Chap 13 should not feel like a prison sentance. Unless you have huge tax bills, are trying to keep non-exempt assets or have other circumstances creating a high minimum payback, your plan should be liveable as long as you are willing to make the changes necessary to live within your means. A good attorney will help you create and fight for a livable plan. If a liveable plan is impossible, you should consider whether Chap 13 is really the best solution for you.

When a Chapter 13 plan is confirmed, it is for a specific dollar amount for a specific number of months. A trustee cannot just demand that all disposable income be surrendered. There must be written orders in the Plan Confirmation document outlining exactly what the trustee expects in the way of reporting income on an ongoing basis. If the debtor is required to submit, for example, a copy of the Federal Income Tax return each year, that will alert the trustee if the debtor's income has increased significantly enough to warrant a plan modification, and the trustee will then have to file a motion in Court to get an increase (rest assured they will never file a motion for a decrease!).

Exactly! Many people seem to think a trustee can do whatever he/she wants. The trustee is not the one in charge. You can negotiate with the trustee. But, if you can't reach an agreement, the judge gets the last word. It's important to have a good attorney who will stand up to the trustee if necessary.

[Guest123]

We haven't filed yet but talking to our lawyer a chapter13 is not as bad as the net makes it out to be. We have talked to a few that have filed and you would never know they filed unless they told you. They have been telling us the plan will most likely be what it is and will only change if we need it too. They have has huge bonuses and high pay increases with no effect on their plans and none are in a 100% payback plan. We will be prepared if the trustee wants more just in case!
Our lawyer proposed a low monthly payment that gives us more money then we have ever had. And after the 5years we will be free and clear of all credit, not to mention we will bring home more then we ever had also.

[NowImDownInIt]

As with most everything in personal ramifications of bankruptcy, there is no real answer to this. It is all entirely situational. I've read through this post and I've read about 1000 other posts asking pretty much the same thing and I can tell you that a large majority see it as a positive move, about half of that majority will claim it's the best move they ever made and wish they'd made it sooner.

There are some that you will never convince. Some that couldn't imagine paying almost every cent of their hard earned disposable income to a BK court every month without fail unless they want to fail.

At first, it feels like the end of the world.. and I mean really the end of the world. For months you may be waiting for the other shoe to drop. Unfortunately for some this can and does happen. If that's the case you can convert and you may be a little worse for wear but you'll be alive. Fortunately, if given the chance, you adapt. You can't go in this thinking of it as a punishment or it will become one. Chapter 13 BK is a powerful tool and if you can hack it, you will be better for it. To be successful your BK will require you to learn to be resourceful with your money and your budget. Maybe you will spend a weekend with a library book and a wrench and learn to fix a leaky faucet... Maybe you will have a better relationship with your kids after more family game nights and less nights out. Once you embrace this all as a life lesson, a lesson in humility, it will be easy. Some days I forget I am even in the 13 and I am halfway done with my almost 5 year plan at 100%.

I qualified for a 7 but went with the 13 to keep my car, of all things. The idea now, of doing this to save something so silly seems ridiculous for me, but the value of the lesson and the experience has been priceless to me.

My trustee (Houston, Texas) is reasonable and in-line with a lot that I've seen. He doesn't even want to hear about a raise unless it is over 10%. He doesn't require yearly returns, but must be provided with it upon request. Bonuses and refunds may be handed over at my discretion, since I am at 100% but they are not required either way.

Since I filed in July of 2008, I have married, been through a devastating hurricane, been laid off, had a baby, had 2 Christmases and 9 family birthdays (excluding my own 3), have totaled my car, and two REALLY expensive visits to the ER. If anyone tells you that it's easy 100% of the time they are delusional or lying or both... but it's not hard 100% of the time either.. it's survivable.

Anyway, my long-winded point is that it's difficult, but worth considering.