Confirmation Hearing was a DISASTER...

[enginegirl]

so today was my confirmation hearing...... was hoping at worst I would get a continuance to give all of the creditors time to file any objections.. and by all I only mean 3 (Citi, AMEX and Capital One). What I got was payment doubled from $482. to $993.......
My salary was cut a week after filing from 75k per year to 60.... I was told this was the reason they were increasing payment..... not sure what to do at this point.. I cant afford to pay $993 a month.. the $482 was cutting it close.....

I meet with my lawyer next week.. until then I am a mess.... I dont quite know what to do.....

[justbroke]

Well, you work with your attorney. If there is that much disposable income, than you CAN afford to be in a Chapter 13. The problem may be that you just don't like the budget. Your attorney should fashion a Plan that has a budget consistent with the expense allowances, and to maximum those allowances so that you can save. A Chapter 13 will NOT be like you used to live. You will NOT be able to go out and "have fun" every weekend. You'll be lucky, as I was, to take the family out once a month to the movies. (Going to the movies and eating out costs almost $100 for us.)

Tell me more about your case. What's your family size? What type of housing do you have? How many cars do you have? Etc. If you're single and making that much money, I'm surprised your DMI isn't higher.

[enginegirl]

Just Broke... did you not read the part about the the $15000.00 pay cut I took right after I filed????? the 489 per month was all of my disposable income.... My mortgage, car payment, gas, insurance, power, food eats up all of my income.... (i drive over 4000 miles a month to and from work.. the gas and tolls alone are over $600.00 per month....) If I could afford 1000.00 a month I would not be panicking....
so what I do NOT need at this point is to be told off... or told I am lucky that that it all it is.... what I do need is some advise as what I should do next????

[justbroke]

Just Broke... did you not read the part about the the $15000.00 pay cut I took right after I filed?????

Absolutely saw that. However, I don't know all your numbers.

Are you sure that your attorney actually got you an allowance of $600/month for tolls and gas? Is that reimburseable? If so, then it doesn't count and it probably why your DMI is higher. It doesn't matter what you think your numbers are. It only matters what the Means Test provides you with, what numbers your attorney used, and, ultimately, what the Trustee and creditors assert to be in good faith.

My mortgage, car payment, gas, insurance, power, food eats up all of my income.... (i drive over 4000 miles a month to and from work.. the gas and tolls alone are over $600.00 per month....) If I could afford 1000.00 a month I would not be panicking....

I'm trying to explain to you how the math works, how you need to work with your attorney, and that budgeting is VERY important. Should you not need my experience in this area, I will be quiet and let others answer your questions.

In order to provide accurate assessment of your budget and DMI, you should need to provide the information requested earlier. Without that, I can only speculate that the expenses that you think that you should be able to claim, are or have not been allowed in your case.

what I do need is some advise as what I should do next????

Repeating that working with your attorney to determine your REAL numbers is what you need to do. If you are single, making $60K a year and don't have a $4K/month mortgage, I'm suspecting that you do actually have disposable income.

You need to schedule an appointment with your attorney, sit down with him/her and go back through your numbers. There is obviously something that you are/were counting that the Chapter 13 Trustee (Tee) doesn't like. If your attorney feels strongly about your numbers, then s/he can fight for you and challenge the Tee in a evidentiary and final hearing on confirmation.

(As an aside, there are MANY things which determine a Chapter 13 Plan payment that go beyond mere disposable monthly income (DMI). That includes the Chapter 7 liquidation test. Since I in no way know your numbers or what "property" that you're trying to keep, all I can tell you is that your payment went up because your Means Test or Schedule I/J indicates something that the Tee objects to as an expense. Sit down with your attorney and have the attorney explain things to you.)

[enginegirl]

The means test shows I have a DMI of 486.
My gas etc is not reimbursable..... I lost my job 2.5 years ago where I made $125K per year down to 75 and now 60...... in the down turn the only job I could find is 60 miles from home... gas and tolls is 600 (I have receipts for all of this) car payment 315.( I purchased a Mazda a month before I filed as I knew my BMW wouldn't survive the bankruptcy) insurance $130 per month.. this brings my monthly car to $1045 per month.... mortgage $865.00 (this is 1st mortgage as we are doing a lean strip on 2nd) maintenance fee $350.00.. home insurance $200.00 per month... electric $150.00, internet, cable home phone, medical,.. etc etc etc..... according to means test I am left with $486... which I have paid in for the past 2 1/2 months... I don't go out and I don't spend money frivolously, I have cut every expense down to the bone... I am left with maybe 10.00 per month.... it is about needs at this point and not the wants of my past life

I have an appointment with my attorney next week to discuss options... one of which will be a chap 7 and loosing my home of 10 years......

[indebt00]

What you have to remember is that the Trustee doesn't care what your REAL expenses are...its only the ones in the means test that matter. It doesn't matter if your electric bill is 500...you only get 100 (this is just an example)....and if your DMI on the means test was $486, then your something is off...did the Trustee not approve some of the #'s in the Means Test? did he find more income? is he using your 6 month average instead of your new actual? maybe you need more time before you file so your average income is lower????

Your biggest adjustment in the ch13 process will be learning to budget. Its such a hard lesson that I am still learning 15 months after I started.

as Justbroke said...you need to talk to your lawyer...he should work on finding acceptable costs that fit the means test so you have some wiggle room to afford your REAL bills. This is the absolute most important thing you can do.

I will admit...humility is a hard lesson.....and ch 13 definately puts you there.

Good luck !!!! and ask your lawyer about getting your actual toll costs inlcuded (unless you employer reimburses you for them...then they are income

[sheilaE]

I'm chiming in here....I know this was only an example but I don't understand how if your electric bill is $500.00 then how can they allow ONLY $100?!?! Ours is between $400.00 and $550.00 every month and that is a HUGE difference from $100.00. We just happen to live in a city in CA where the electricity is at the highest. Also, what would be considered acceptable costs? I may need this info if they don't approve what our electric bill is.

I can't give you advice Enginegirl because we haven't even filed yet (it'll be the end of this month-then I'll be on here everyday asking for advice) but I can say one thing-I'd be meeting with my atty asap and fighting to keep that money. From everything I've read on here, chapter 13 is NOT suppose to be a punishment and if you are stretched to where you may not have gas money at then end of the month then something is terribly wrong. I'm keeping my fingers crossed for you-please update after you meet with your atty.

Sheila

[momofthree]

Shiela, if you have PG&E, i highly recommend you sign up for balanced billing. We, too, live in the desert of CA and our rates are thru the roof, but balanced billing has made it to where we pay $200/mo every month of the year rather than $500/mo during the summer and $75/mo during the winter (they base it on your last 12 months and average out your usage). We couldn't survive the summer months without our balanced billing!

[newbie2]

The means test shows I have a DMI of 486.
My gas etc is not reimbursable..... I lost my job 2.5 years ago where I made $125K per year down to 75 and now 60...... in the down turn the only job I could find is 60 miles from home... gas and tolls is 600 (I have receipts for all of this) car payment 315.( I purchased a Mazda a month before I filed as I knew my BMW wouldn't survive the bankruptcy) insurance $130 per month.. this brings my monthly car to $1045 per month.... mortgage $865.00 (this is 1st mortgage as we are doing a lean strip on 2nd) maintenance fee $350.00.. home insurance $200.00 per month... electric $150.00, internet, cable home phone, medical,.. etc etc etc..... according to means test I am left with $486... which I have paid in for the past 2 1/2 months... I don't go out and I don't spend money frivolously, I have cut every expense down to the bone... I am left with maybe 10.00 per month.... it is about needs at this point and not the wants of my past life

I have an appointment with my attorney next week to discuss options... one of which will be a chap 7 and loosing my home of 10 years......

Did your attorney use the 2nd mortgage payment in your expenses? If so, that could be the cause of the increase in your Chapter 13 payment.

[Flamingo]

Just Broke... did you not read the part about the the $15000.00 pay cut I took right after I filed????? the 489 per month was all of my disposable income.... My mortgage, car payment, gas, insurance, power, food eats up all of my income.... (i drive over 4000 miles a month to and from work.. the gas and tolls alone are over $600.00 per month....) If I could afford 1000.00 a month I would not be panicking....
so what I do NOT need at this point is to be told off... or told I am lucky that that it all it is.... what I do need is some advise as what I should do next????

Just a brief chime in here...To the OP, as JustBroke stated, the best thing to do is to work closely with your attorney on this and also as stated, reality bites hard when one is faced with a Chapter 13 (been there, done it). Most people have to file a Chapter 13 for two reasons...first they have assets they want to keep; secondly they make too much to file a Chapter 7. You will have to figure out whether or not you can actually afford to keep your home with your high travel expenses and situation. I understand since I commute 120 miles round trip a day myself and was doing that during the last year of our Plan - it was difficult with the added expense.

Note that the company I worked for went bankrupt one month after we filed and I was out of a job. I had to quickly find another job (according to my attorney) which I did but at $6,000 per year less. In order to keep our home, our plan was modified at a lower payment but at the end of our Plan we had to refinance to pay the difference from the lower payment we were making and the confirmed original payment. It can get complicated, emotions run high, try to remain calm and work with what you have at hand with your attorney. Change is difficult. Financial problems on top of all that really rocks the boat. Going from a cushy life (we too made well over six figures in the years prior to filing) to a huge loss of income and status can put many people into dispair. Know that the main cause of Chapter 13 failure is failure to be able to adjust to a lifestyle of budgeting and cutting back. Many people just cannot go from shopping at the glossy store to buying discount at the dollar store. However to get through this period of time and the years to come, budgeting is a must no matter what Chapter you end up filing. You will get through this believe it or not and while it may not be to your liking, you will look back and be happy about the lessons you have learned.

Best of luck to you and keep us informed...

[justbroke]

Just to clear any confusion, there are about 3-4 expense categories (and only 3-4 expense categories) where you can actually go over the IRS limits. Specifically, home energy is one such category. However, you need to have receipts and a very good explanation as to why you exceed the expense category.

maintenance fee $350.00

Unless this is some sort of HOA fees/assessments/dues, then this is probably an area where the Trustee (Tee) will pounce. I put down $200 for my 3,800sqft home that has a monthly payment of over $4K.

internet, cable home phone

This depends on what values you used. Some Trustees will only approve basic cable ($50/month). Most will tell you that "home phone" is included in the non-rent/non-mortgage expense category (because it is), and if you can show a need, some will let you expense a cell phone and internet up to $100,

One area where you (your attorney) may have messed up is with taxes! While you get to claim an expense for taxes, any refund that you received in prior years will be averaged and added to your disposable income! This is where most Chapter 13 plans underestimate the DMI.

A Chapter 13 is not intended to be a punishment. I don't see how you qualify for a Chapter 7, but you will need to work with your attorney. A Chapter 13, however, is also not guaranteed to everyone. In order to be in a Chapter 13, it needs to be feasible and, more importantly, livable! I think too many people forget the latter. Usually, when a Chapter 13 plan is not livable, it's because we as debtors try to keep to much.

That's from experience.

[Pandora]

... In order to be in a Chapter 13, it needs to be feasible and, more importantly, livable! I think too many people forget the latter. Usually, when a Chapter 13 plan is not livable, it's because we as debtors try to keep to much.

One area where you (your attorney) may have messed up is with taxes! While you get to claim an expense for taxes, any refund that you received in prior years will be averaged and added to your disposable income! This is where most Chapter 13 plans underestimate the DMI.

Amen Amen AMEN!

Just wanted to touch on the 2nd part of JB's post (taxes) - if you also kept your refund (if applicable) but couldnt exempt it - then thats added in to your plan and must be paid back. This has happend with us - our exemptions ran out but we needed to keep our refund.

I'm wondering, just as newbie2 is - did they include the 2nd as an expense? In most instances, if your income goes down, your plan should be adjusted accordingly to reflect the loss - not go up. Are you over in exemptions and are wanting to keep certain things - requiring a payback to the plan? Do you have student loans that you added in? They can be deferred until your 13 is completed and from what I remember, should not be added in.

If it were me and my payments doubled but my income decreased - I'd tell my attorney he/she has some serious explaining to do.

[enginegirl]

Flamingo... thanks for the good words, they are appreciated

Just broke.. I am in this situation not from shopping and not from keeping much, I don't have any toys (I even got rid of my beloved BMW).... as I mentioned I lost my job, got a new one at at less than 50% of my then salary.. the biggest issue I have is that I lent my ex fiance a HUGE amount of money that I used my HELOC for... when he left... I got left with all the debit and 100% of all the other bills .... What I should have done 2.5 years ago was walk away from my home instead of robbing from Peter to pay Paul.......

I do have an appt with my attorney next Tuesday (the soonest she could get me in.. ).

[Pandora]

. the biggest issue I have is that I lent my ex fiance a HUGE amount of money that I used my HELOC for... when he left... I got left with all the debit and 100% of all the other bills ....

did you give that to him in the past year? Maybe thats the reason - you gave him money and the trustee is requiring it to be returned??

I dont know - grabbing at straws here I feel badly for you - sorry (hugs)

[enginegirl]

Pandora... I gave that to him 4 Years ago.... after I lost my job, he saw that he wasn't going to have a cushy life any more and left.. (expletive) and then business he started with the funds failed so that was that..... Thanks for the hugs.. they are appreciated and needed right now