Laughing to keep from crying!

[lolly78]

Ok, so I've been waiting and waiting for my attorney to give me my plan, so I picked it up today so excited to finally get this thing started and to my surprise it's $1000 more than I was originally quoted at my consultation! ($154,000 over the 5 years!!!!)

There is no way I can afford this!!! He says that I'll basically end up paying all of my second mortage off in the plan if it's stripped. If I continue to pay my second mortgage outside of the plan, it will reduce my plan payment by about $500.00. (Which I'd have to catch up on since I stopped paying two months ago thinking it would be stripped)

The main reason for the difference is the Ransom decision, but when I look at my plan I'm confused. I have one car that I'm paying for and one that's paid off. I can understand that on line 28 I can only claim the ownership cost for the one car I'm paying for. But what about line 27a? I do pay operating expenses for two cars and he has 1 checked off. Is this correct? Can we change this to two and increase the deduction here thus reducing my plan payment?

[lrprn]

If you own two cars, both cars should qualify for the ownership cost.

Do not sign the forms. Make an office appointment with your lawyer as quickly as possible. Continue going over the forms line by line with a fine-toothed comb to find any other potential errors and clearly mark them. Go to your appointment with the lawyer and don't leave the office until you get a satisfactory answer for each discrepancy or omission.

You are going to be living with this plan for 5 years. It's definitely in your best interests to get it right the first time the plan is filed.

[debee]

I think lrprn meant to type that you should get the "operating" cost for both vehicles.

[dontburnthep]

Yes, you should get ownership costs for one and operating costs for 2.

[momofthree]

Are you married? Or are you single with 2 vehicles? I ask because we have 3 vehicles, but were only able to claim operating expenses for 2 since there are only 2 drivers in the family and the 3rd vehicle was considered unnecessary. If you have 2 drivers in the household, it's a no-brainer, you should get the 2 operating expenses. However, if there's only 1 driver, it's more of a gray area....

[Pandora]

...He says that I'll basically end up paying all of my second mortage off in the plan if it's stripped. If I continue to pay my second mortgage outside of the plan, it will reduce my plan payment by about $500.00. (Which I'd have to catch up on since I stopped paying two months ago thinking it would be stripped)

Confused here - was your 2nd approved for strip or not? You're stating your lawyer says you'll be paying more due to your 2nd being stripped; if its been approved for the strip - you shouldnt have to pay more to the 2nd than what the other unsecured creditors are receiving.

what was your total percentage in payback to unsecureds?

[lolly78]

I'm married, and we have two cars. I mentioned that to him and he said he picked the wrong box. Union dues were missing, telecommunications was missing, 401k loans, public trans allowance all missing, so he updated the plan and it's still over $600 more than what I was originally quoted. With this plan I won't be able to afford a land line, internet (required for my job) satellite, school lunches for my son, nor cell phone. No spending money, no entertainment only $500 left over after bare essentials!

He indicated that the means test determines the plan payment and Sometimes, but not often, the actual budget cannot actually cover the plan payments. This seems to be what's happening in my case.

[lolly78]

Hi Pandora,

We haven't petitioned the court yet for a lien strip, so I guess the short answer is no. I believe he initially said that my payback was approximately 50%. I don't have any secured debt in the plan, just unsecured debt (about $126k) and about $6000 in tax debt.

[Pandora]

you need to find out if your lawyer is planning on doing the strip or not; it will either have to be done by Motion or by AP depending on what your area requires. This is usually done with the initial filing prior to your 341 or at your 341 the Trustee will want an amendment done to include the Motion/AP. To strip it, the value of your house must not be more than what it owed to the 1st mortgage - you can get a ballpark figure based on your county property tax assessment but only if your area does 100% of Fair Market Value. That should give you some general idea until you can get either a BPO, CMA or full certified appraisal; of the three, the full cert. appraisal is the best.

As to filing Ch. 13 vs. filing Ch. 7 - just because you are over median does not automatically disqualify you from filing Ch. 7; the means test is only part of the issue. If it was discovered you do not have the money to fund a Ch. 13, then your lawyer should be discussing a Ch. 7 based on negative DMI. You have to be able to fund the plan fully or the trustee will not confirm.

You say nothing secured is in your plan - so your car payment is outside the plan as well as your 1st mortgage? Taxes are considered priority so those should be paid in full during your plan. For your 401K - not sure how your attorney listed it but here is a great post with how it should work in a BK filing:

http://www.bkforum.com/showthread.php?58703-401k-Loan-payments-paid-through-trustee&highlight=401K+loan+included+ch.+13

Was this the 1st lawyer you interviewed? It sounds like he may not be very experienced with Ch. 13's.

ETA: just went back and read this post http://www.bkforum.com/showthread.ph...ing-Chapter-13 by you and you really need to look over your paperwork very carefully. As noted, student loans generally cannot be included in a Ch. 13 - they get deferred until your plan is done.

[Pandora]

Here is a great post by Despirtfreya and HHM regarding Student loans and how they work in a Ch. 13

http://www.bkforum.com/showthread.php?65069-Student-Loans-under-Chapter-13&highlight=student+loans

also here: http://www.bkforum.com/showthread.ph...=student+loans

as with anything YMMV

[lolly78]

Hi Pandora,

Thanks so much for all the info!

I provided the attorney with a CMA, value is between 180-190, I owe 196 on the first, 45 on the second, so I should be ok with the strip. I do have DMI, but 1600 at the most, according to the schedule J. (I think my expenses are very conservative) The means test however, indicates now that my plan payment should be over $2000, and as I said I just can't do this without giving up some basic stuff. I have to pay my mortgage, car note, and before/after care expenses, which are my largest expenses. I've got my light bill down to $70 and gas down to $63. There is just no room to left to cut anywhere else. I just don't understand why there would be such a difference between the two tests, and who determines which one we are able to pay.

Yes, both my mortgage and my car payment would be paid outside the plan, they are both current.

The 401K loan is listed on the plan under qualified retirement deductions, so it seems like the deduction reduced my DMI a bit.

How'd you guess he was the first and only attorney I interviewed! A good friend of mine recommended him and he's been in business for 38 years, so I figured he knew it all. I've been giving him more info than he's giving me, to the point where he said I could work for him thanks to all the great info on this board!

I just want a fair payment we can afford and all these phone calls to stop!

[Pandora]

lolly

as HHM stated, do not sign the forms. You are entitled to the IRS standard amounts at a minimum - and you should NOT be cutting down on your bills to bare minimums if you have no secured creditors being paid in your plan. The object is to give the unsecured creditors as little as possible in your plan. If your electric bill is normally $200 a month, then you should not have to get it down to an unrealistic number - you're entitled to electric LOL!

If you feel comfortable doing so - why dont you post what your expenses and figures are that you have on your schedules? That way we can all take a look at everything to ensure you arent missing something you're entitled to claim, and whether or not your allowances are high / low / just right.

The more eyes - the better

[Pandora]

How'd you guess he was the first and only attorney I interviewed! A good friend of mine recommended him and he's been in business for 38 years, so I figured he knew it all. I've been giving him more info than he's giving me, to the point where he said I could work for him thanks to all the great info on this board!

How did I guess? Thats easy... because it sounds like he doesnt know what he's doing from what you've posted.

"I've been giving him more info than he's giving me, to the point where he said I could work for him.." while a nice gesture/thought - that would be a huge red flag in my book that he doesnt know enough about what he's supposed to be providing as a service.

[BKParalegal]

lolly

and you should NOT be cutting down on your bills to bare minimums if you have no secured creditors being paid in your plan. The object is to give the unsecured creditors as little as possible in your plan. If your electric bill is normally $200 a month, then you should not have to get it down to an unrealistic number - you're entitled to electric LOL!

Adjusting expenses on Schedule J does not affect the Means test regarding utilities since that amount is pre-determined by household size. What you have to do is adjust the allowable expenses in the Means Test. These are things like Medical/Dental expenses, you get dollar for dollar reduction for that. Life Insurance policies, max out your 401k contribution, add every supplemental insurance your company offers, find God and start tithing (need at least 3 to 6 month track record), calculate all your children's school expenses (max $147.50 per child and they can ask for documentation). Do you or husband have non-reimbursable expenses for work? if so you can add them. You said you have a tax liability? Will you owe for last year as well? if so then you need to adjust your deductions at work and that will reduce your net income.

Good Luck

[Pandora]

What you have to do is adjust the allowable expenses...

*scratches head*...isnt that what I said/inferred?

Who's on 1st? What's on 2nd?