I knew Chapter 13 wouldn't be a picnic but distraught after attorney meeting....

[momofthree]

After Pandora posted numbers, I'm very curious. You have an income of $100000, a relatively small mortgage of $140k, and no car payments. Where is your money going? I'm surprised you're not in a 100% payback with lots of wiggle room in all areas.

Our income was $68k (bring home $4850), family of 5, mortgage of $1855/mo (modified--balance of $205k), trustee payment of $610, pay full 10% tithe every month, and we're living frugally but very comfortably. (Well, actually dh would disagree on the comfortable part b/c he can't buy whatever he wants whenever he wants it, but I digress).

edited to add: I still think you need to find yourself a different attorney. You're paying your attorney to fight for you, even if that means your living expenses are above IRS standards.

[andy158]

We were only a few hundred dollars (on the plus side) from our state median income. Whats bad was that the two neighboring states are $10-$15k higher for median income. Couldn't use federal standard deductions either. WV has their own. But we got a decent livable plan and are doing ok after the first year. We found a lot of things we definately could do without. We surrendered our toys (boat and motorcycle) and the trustee did not question anything on our petition. As Flamingo said bk13 is the best budget teacher in the world and after discharge we will have $1,050/mo in trustee payments going into our savings. We surrrender the first $1,500 of our tax returns if we get one and we have adjusted our witholdings to get a very minimal return. Staying under the radar and living comfortably.

I agree with other posters. Another attorny my be more savy in calculating your budget and get you a plan that is not a "punishment". Our attorny is strictly a bk attorny and knows the trustee stick points. Our first attorney was a Consumer Protection/Bankruptcy attorny and we were not impressed with his handling of our case. Ended up paying him $500 and wasting about four weeks of our time.

[Cristo]

You need a new lawyer!! Why do you have to pay 80% and starve? Your payback is supposed to be based on what you can afford, not cutting out necessary things so that you can pay creditors. You should be getting the IRS allowances. I consulted with several lawyers and was suprised at the vastly different stories I got from them. I went with the one who would fight for me according to what the law allows. Does your DMI really allow for 80% payback based on IRS allowances? I agree that cutting out some extras will have to go, but not food.

[debtinohio]

Yeah - find a new lawyer. I have higher income, but my house is $900 over the IRS limits, cars were over, $200 cell, $100 house maintenance, etc. and 19% payback. Kids are in activities and we're doing well.

[debee]

The United States Trustee allows up to 15% (of gross) for charitable contributions on a ch13 DMI test. There is a line-by-line file at the website which goes over what will be objected to and which items belong in which category. It gives some breakdown based on which circuits presently allow certain deductions when others don't, but it doesn't account for everything. A debtor-friendly lawyer would be able to fill in those blanks.

http://www.justice.gov/ust/eo/bapcpa/docs/chapter13_analysis.pdf

[debtinohio]

I know charity is important but this is the LAST thing you should be worrying about in your situation. Fight for your actual expenses and help yourself first. It's time to be selfish and get yourself back on solid ground you cannot afford to give money away. Sorry - it's the truth.

Once you're back to financial health, have an emergency fund, retirement accounts, etc. then help whoever you want.

[NowImDownInIt]

*playing the devil's advocate*

I think that the problem that you and your attorney are facing might be caused by the above average medical expenses. There is a certain amount that your trustee may want you to be able to pay back under your means test and possibly your attorney just has lots of experience with this particular trustee. No one is out to punish you, it's just that it's the trustee's job to make sure your creditors are getting whatever they can.. and it's your attorney's job to get you into a plan that your trustee finds acceptable, both manageable and difficult. Very rarely will you be able to justify IRS maxes on everything in your budget and still have a fundable plan.

Where do you spend more than $50 on average in house maintenance? I can't even imagine paying $7200 over five years in routine maintenance which is what they expect you to budget for.

I know that it's unfortunate, but sadly children are the most common "victims" in Ch. 13s. I'm sure many can attest to this and I definitely can. How old are your children? You said they'd been in sports/music lessons for at least 5 years and one is about to head to college? In my opinion, children fall into one of two categories: young enough that they don't realize that they are having to go without some things, or old enough that they will understand if you are completely honest with them. The former is obviously easier (in most cases), but depending on your relationship with your children, the latter can be okay. This is a good opportunity for your older children to learn money management and recognize it's importance. Your children may think it's the end of the world in the beginning, but I assure you, children are resilient and they won't be scarred for life. There will be a definite adjustment period, but the good thing is that children are usually pretty adaptable.

Is your credit decent enough to purchase cars that you are not worried about making it through the 5 year plan? This is an acceptable practice and should be considered.

Get some board games and learn how to appreciate home entertainment. After all is said and done, you will be better off. A clean slate and a family that has made it through difficult times only to be stronger and closer than ever.

Don't be scared, just go into this with more reasonable expectations. This is going to hurt, but it's not going to kill you.

[NYHusband]

Where do you spend more than $50 on average in house maintenance? I can't even imagine paying $7200 over five years in routine maintenance which is what they expect you to budget for.

What kind of house CAN you maintain for $50 a month? Maybe something built in the last 20 years... Our house is only 1200sq/ft on 3/4 of an acre, and I can easily produce receipts for $250 a month in maintenance/repairs, not including paint/misc/improvements. Our house was built in the 40's - it's in solid condition, but it's always something!

[justbroke]

I spend about $200/month in maintenance on my home. I am required to repaint the 3,800 square foot home every 5 years, that alone is over $5K. My maintenance contracts on my 3 A/C units is $35/month. My landscaping is $105/month. My pool... let's not even bring that into the equation.

I would venture to say that depending on location of the home, the size of the home may not even be a factor. Living in a master planned community (or HOA or Condo Association) will require you to pay certain things on an ongoing basis. I must maintain my property from front to back to adhere to "standards" imposed by the HOA. It has a cost and it's actually not that bad where I live. A friend of mine has over $1,000/month in condo association "assessments" each month on two units that they own in the same building! How's that for maintenance?

[Flying2BK]

This brings up a good point.......

I am getting ready to file CH13. My Attorney had me sign some papers but stated the numbers were incorrect, and that he would send them to me in a PDF file to look at this week. My question is I am early in the process we have not discussed DMI, or what the IRS limits are....not even pointed out where I would go look to get some idea of my next 5 years.

He said he would E-File.......when will I have an idea of what % of payback will be?

[justbroke]

The percent (%) payback doesn't matter. What matters to a person in a Chapter 13 plan, is that the secured property that they want to keep, is in plan and arrears on that same secure property is accounted for in the plan. The Chapter 13 debtor should also care that the expenses provided for in the Plan -- and Means Test -- create a plan. While a Chapter 13 doesn't allow you to specify a budget item labeled "savings" or "rainy day fund", you must figure this out yourself.

The Chapter 13 debtor should never be worried about percent payback. The average Chapter 13 debtor is trying to save property (real or personal) and gets the added benefit of potentiallly discharging thousands upon thousands of dollars in unsecured debt for pennies on the dollar. The Chapter 13 debtor also gets a "refinance" on their vehicles (unless they just bought them). Yes, it's hypertechnical, but being able to take the car that you owe 3 years on, and spread it out over 5, while reducing the interest rate from a, perhaps, awful APR over 10%, down to 3, 4 or even 5% (known as the Till Rate) is powerful. Additionally, the Chapter 13 debtor can cram down vehicles and other personal (and real) property -- not including the primary residence -- and pay it off in 36 to 60 months.

A Chapter 13 can be very powerful, especially the superdischarge -- being able to discharge things that you can't in a Chapter 7.

For you, just make sure you sit down with your attorney and have them explain everything. If I were you, I'd already be tracking my budget down to the penny over the next few months and make sure you categorize it. See where you're spending your money. When you get the attorney's numbers... match them to yours. I won't sit here and say that the attorney has to make his numbers match yours, but I will say that you will probably have some work to do to bring your numbers in line. If they are way off, speak to your attorney and have him/her explain the numbers to you. A Chapter 13 isn't designed to have anyone living the life of luxury, but it's also not designed to put you in the "poor" house either.

[indebt00]

Just came back to this post and reread the answers....

you know for us....our lawyer was able to pad the categories to what was acceptable or allowed...so that we had a few extra $$ each month to live on. Thats is one of the points of having a good lawyer.
Yes we may get $50 for house repair (this is pretend example) but we don't spend $50 on home repairs each month, or donations, or gas, or food, or clothing.
its all subjective....
that extra $20-40 here or there is what you have to help you live....think about it...its just the budget he uses to get to your monthly payment.

The REAL test is for YOU to figure out what your REAL costs are and what is left each month after you payment...if you are not going to be able to live, then you have to figure out ways to drastically cut costs...turn off cable...etc....or you will never make it thru BK....and if you are not able to cuts costs and you BK pymt is going to be a hardship....you will fail....

you need to have a plan that works....there has to be money to live on....that is what a good lawyer makes sure of. and I am talking about surviving...not living the high life.

we save every extra dollar that comes our way....so when we do have a large house expense or repair we can pay for it.

I really hope this helps....because it really scares me to think there are those out there filing ch 13 and KNOWING going in they are not going to be able to afford it....

[CoBelle]

I agree with those who say: GET THEE A NEW LAWYER QUICKLY.
The pigs and hogs rang a bell......
my lawyer said the same thing . She also said ....you have to pay the trustee enough to make it worth her while.
WTH? While it may be true......she never should have said that because its just wrong. The trustee is there to get money for
your creditors not for the trustee. (In our state it's a whopping 10% )

My lawyer also bragged that she never had to go to court.....well, her idea of my payment was $1680 per month. When I reminded her that before my plan would be confirmed that my income was dropping to $505 /month(plus $890 social security)...she said: well you can pay with your retirement funds. So I worked with the paralegal and got my payment to $443 which I was willing to pay for 5 years to be able to buy out my exx's share of the house that isn' t in any mortgage arrears.

POINT: some lawyers take pride in getting you the bestdeal ppossible. Others want to 'get along' with the trustee.
Trust me on this: GET THEE TO A NEW LAWYER

[ShooFly]

A plan will not be confirmed if the trustee believes the debtors will fail. What the issue is with many Chapter 13 filers (as it was with us but we waded the waters), it is so hard to give up the past lifestyle of having it when you wanted it or using cash/credit for items that are really not needed, keeping up with the Jones, etc., etc. that is extremely hard to fathom for many. It is tough to go from buying designer to looking for items in thrift shops or learning to use coupons and shop discount/bulk. And hard to give up the luxury vehicle. Once one can get over that hurdle and actually learn to budget and learn how to allow themselves to control money and not let it control them, is when the turn around occurs and usually Chapter 13 tossees that right in you face. I have always stated in this foroum that a Chapter 13 is the best budget teacher in the world and those that get through it carry on important lessons the rest of their lives. We survived, it wasn't easy, I cried several nights during those years but you learn to get tough and find ways to do it. We kept our home that way and we are sitting quite nice 4 years after discharge. Let the old lifestyle go and don't worry what others think and learn to budget and cut back and not eat out every night, vacation in your back yard and have fun with family/friends locally. Believe it or not, it works out and people do get through it.

Thanks for the words of encouragement! I'm about to make payment #1 and I know it's going to be a longgggg road ahead... but I am determined to make it through and save my house, which is an income property, and it will definitely help me after these 5 years are up.

[Cristo]

CoBelle is so right!! The first I retained said many of the same things.....he does not get objections to his plans. Well, that's because he makes his clients pay a min. 25% to unsecureds and then adds on your secured debt payments! Of course the trustee is not going to object. He told me that because I was over median I had to pay 25%! He just expected me to figure out how. That is completely wrong, unethical, b.s. and he is ripping off his clients to that he does not have to do any real work and he gets along with the trustee!

You need a lawyer that will fight for you and get you a plan you can afford. My new lawyer did and I now have a plan I can afford and will save about $30,000 over the life of the plan compared to what the first guy said. I will say again you should not have to cut food or medical so you don't "seem greedy" WTH!! Please fight for yourself. I had to walk away from a $2000 retainer I paid but it was so worth it. Consultations are free......