Is a Chapter 13 plan the worst thing ever? ??

[markdel16]

The best thing to come out of my 13 was to learn to budget, and if I don't have money for something, I don't buy it. It's truly been a blessing. Only 21 more payments to go!

[lillymarlene]

I have only been in this 13 (not confirmed yet) for 4 months with 44 to go, but already I can see a difference in my attitude about money. Even simple grocery shopping I question things, if I really need it (if no I don't buy it) and I diligently comparison shop. Believe it or not, I don't feel deprived, I'm happier about all this little extra money staying in my pocket.

Then I also refuse sometimes to accept "no" for an answer with certain bureaucrats when I may be right. Recently my city tried to bill me for a couple of different past due water and personal business property taxes, that were included in my plan. At first the people I talked to claimed that they had to leave the past due charges on new bills so they'd know what was going on. I said that was unacceptable. Finally, 6 phone calls later I was able to get them to remove the charges from their system, that I was bankrupt (they had been sent a notice anyway) and they could even get in trouble for contacting me over items that were listed in my bankruptcy. I swear years ago, I probably would have just let something like this slide, and have taken their word for it, that they couldn't stop billing me, or take something out of their system.

I think a 13 can be very helpful. It's certainly causing me to become more mindful.

[Billssuck]

Our chapter 13 has been very difficult but a good thing in the long-term. Five months into the ch13, my husband lost his job and is now on Job #3 since then so everything has been topsy-turvey, income wise. We have had to modify our ch13 to surrender our house (which was the primary reason for the ch13 vs ch7 in the first place) and are still struggling with all the unexpected expenses each month. But...it has taught me to value other things in life and I am so looking forward to a fresh start in about 13 months once we're done. I really think the unexpected expenses part of our budget is what you have to learn to try to plan for...

[spidge]

It can be quite challenging as the entire family does need to be on board and understand the future advantages. If you have been accustomed to using credit to get by in life or to do the extras in life then it may be quite tough, but if you have been struggling to pay your bills and have finally hit a wall you are more likely already used to the change. You will learn that cash gives you much more power in your life.

Just keep in mind that YOU are in charge of your Chapter 13 and your attorney works for YOU. Inquire and read up as much as possible to find BK rules that may help your specific case. It seems that most people have issues when they are uninformed, but if you have an idea of what is happening you will be less surprised and can prepare better. Don't just run down and file. There are things one can do to optimize their position before filing.

We were lucky as our attorney was quite good and I only challenged them on a couple items, but when the 341 meeting is less than a minute long and all goes as planned I cannot complain.

Good luck.

[andy158]

We have been in for 20 months now. This is what we have managed to pay cash for.

Sent oldest for a certificate in phlebotomy which he now has a fulltime job. - $1,000. He is making montlhy payments to us.

Replaced broken computer (watched for sale items and got a great deal on an HP Pavilion). - $525

Replaced broke refridgerator with a scratch and dent (brand new side by side). - $500

One recent major car repair. - $800

These items are paid for and would have been put on a credit card in the past. Our emergency fund is depleted again for the third time, but paying in cash is priceless! Tax returns go straight into our emergency fund. It takes discipline to budget and save, but it can be done and we aren't suffering. In fact as others have said our quality of life is somewhat better because we aren't worrying about the stack of bills in the mailbox every week.

[CCB35]

its not easy at all .one piece of advice if you are married,make sure you and your spouse can both deal with not being able to do things you used to be able to do.I could handle staying home all the time and not having much to go one,she couldnt -we have been separated for almost 2 yrs now .

[MOMof3]

We are in our final year and it hasn't been easy, but I feel like I've learned so much. I don't see myself ever going back to the days where credit ruled my existence. When we are done in February, we won't owe anything to anyone but our mortgage and a balance on student loans. While I'm looking foward to being able to "get" credit, I hope I don't ever "need" it. Good Luck!

[LadyInTheRed]

Chap 13 is actually one of the BEST things to happen in my financial life. It's much better than encountering credit card offers all over campus during my freshman year in college over 20 years ago, which is when I first began my slow march towards BK. It's much better than buying a house, seeing the value increase for a couple of years and then having it plummet to far below what I paid and losing all hope of refinancing before the mortgage goes to adjustable. It's much better than getting great balance transfer offers from credit cards for years, then having those offers suddenly stop and having to pay 18% on a $16K balance you have been paying 0% to 2% on for years. It's much better than taking a loan from my 401k to pay off that credit card when facing a monthly payment I could not make. It's much better than knowing that I would be working the rest of my life to pay off creditors instead of saving for retirement.

Chapter 13 put my financial life back into my control and has helped me form better habits to keep it under my control in the future. It is now easier to pay my monthly bills and expenses. I have a savings account that I add to every month instead of having credit cards that I pull out everytime I don't have enough cash to meet my needs and wants. My wants now wait until I know I can afford them and still keep a cushion. I'm contributing every month to my 401k while also paying down my 401k loan. I'm driving a 1 year old fuel efficient car instead of a 12 year old pick up truck. When somebody threw a rock threw my car window to rifle threw the glove compartment, I was able to pay cash for a new window the next day. When my husband called me to tell me he was on the way to the emeregency room, I told him there was plenty in our joint checking account to cover the copayment instead of saying "charge it!" I have even been thinking about going and getting a haircut for the first time in years!

The worst thing ever? Absolutely not!

A lot of people have a much harder time in a Chap 13 than I am having. <<knocking on wood 11 months after filing with 49 to go>> But, it's interesting how many of the people on this board who have had a hard time in their 13 still seem to see it more as a positive than a negative. It seems that people who think Chap 13 is a terrible thing either haven't been through it or went through it and had a lousy attorney who put them in an unlivable plan, tried to keep assets they couldn't afford, were unable or refused to live within their means, had priority debts that made things very tight, experienced significant changes during their 13, or never should have been in a 13 in the first place.

I think education, a good attorney, preparation and the willingness to adjust spending habits if necessary are key.

[wcb77407]

I am going to be filing soon and this is good to read.

[tammygirl1]

I am 10 months in and can say I have more money in my Emergency fund than I could have ever saved pre-BK! We have close to 7k saved even after a multitude of house/car repairs adding up to at least 3k since filing. We no longer splurge on frivolous things but do not deprive ourselves of things we can afford. It is so true of the mantra 'do I want this or do we NEED this' runs through my head multiple times a day/week. Everything used to be charged to credit cards which in turn all our DMI went to pay the minimums. We finally filed when we could no longer pay all our bills. We have priority back taxes and support along with a car payment being paid through the plan with a little bone thrown in for Creditors. We were even successful in stripping our 2nd. I feel we are doing so much better than I imagined we ever would before we signed those papers! I can't wait for the day we are discharged and only have our house payment owed (thats if we don't surrender that during the next few years since it is still around 100k underwater). We don't want to give it up while we have 3 kids still in the house...I am sure we will more bumps in the road but so grateful I had the option to choose BK. Good luck to all!

[skipteach]

I know I need to talk to a lawyer, but we have been struggling for a while and we don't do anything extra (and that's been without making the mortgage payment). No meals out, no entertainment outside of renting cheapo movies for home watching, no new clothes - except for kids (2 teenagers who grow out of things fast). We are down to 1 older car that works but the air conditioning doesn't work correctly and it's hot here. Our mortgage payment it huge, but unfortunately we didn't take out a second mortgage just refinanced to larger amount ($66,000. house now $123,000. and it's only worth bout $86,000). Scared that the DMI you figure using Form 22C doesn't match our expenditures. $344./mo. for 4 for food, clothing, and toiletries? Where do hair cuts fit into it? HOw does Schedule J fit into the picture? I hear some people saying they were given a good plan. Who makes the plan? The lawyer? I guess I need to start talking to some of them. Anyway, scared and feel like I'm going it alone (husband not helping).

[momofthree]

I know I need to talk to a lawyer, but we have been struggling for a while and we don't do anything extra (and that's been without making the mortgage payment). No meals out, no entertainment outside of renting cheapo movies for home watching, no new clothes - except for kids (2 teenagers who grow out of things fast). We are down to 1 older car that works but the air conditioning doesn't work correctly and it's hot here. Our mortgage payment it huge, but unfortunately we didn't take out a second mortgage just refinanced to larger amount ($66,000. house now $123,000. and it's only worth bout $86,000). Scared that the DMI you figure using Form 22C doesn't match our expenditures. $344./mo. for 4 for food, clothing, and toiletries? Where do hair cuts fit into it? HOw does Schedule J fit into the picture? I hear some people saying they were given a good plan. Who makes the plan? The lawyer? I guess I need to start talking to some of them. Anyway, scared and feel like I'm going it alone (husband not helping).

I don't know where you got this figure, but the IRS standard for food, clothing, personal care, household supplies, & misc is $1377/mo for 4 people, which should be more than adequate. Haircuts are included in that figure under personal care or misc.

You and your attorney submit a plan. The trustee then reviews it and files any objections, and the attorney and trustee haggle over it until a compromise is reached. We didn't have any objections to our plan and the plan we submitted was approved without issue....

[LadyInTheRed]

skipteach, you can find national and local standards for means testing at http://www.justice.gov/ust/eo/bapcpa...anstesting.htm

You should consider buying a newer car before filing Chap 13. Ask about that when consulting with attorneys.

[karm43]

I think it also depends on your housedhold if you have dependents they allow you more. If your single or married without dependents it difficult because the budget is way less. Thats why i need a chap 7.

[nsupanda]

We just recently filed and our payment just about blew the socks off of our feet. We are 100% payback now. We are slowly learning to live with our payment and it's not as hard as I thought it was going to be. When our attorney told us how much we'd pay every month I went home and bawled like a baby and started preparing our years supply of raman noodles.

We've been filed for almost two months now and so far I have managed very well. We now only spend $60/week in groceries (family of 3) whereas before we were spending about $100/week (usually putting it on the card). It's strange, but I have managed to gain 5 pounds this month due to all the food we've been eating (GOOD FOOD). I've just learned to manage my money better. I also started an envelope system that's been working out REALLY well for pop-up expenses we'll have during the year that we can't really budget for monthly.

This isn't paradise, but in five years we'll be free. I really needed this. Without filing bankruptcy I never would have had the discipline to pay off my debts and I feel that when this is all over I'll have the smarts not to get myself into this situation again.