Chapter 13 payments

[mom2crazies]

When I was looking through case files for more information on how to proceed with my case, I noticed that in the documents they would frequently say "The debtor proposed a payback plan of X amount".

Does that mean you get to submit what you think is fair and then you have to work that out with the judge or trustee?

My case is very complicated due to SS for both myself and my children. So, I have no idea what is going to happen.

I am also wondering for those that are already on the payback plan, if you feel that your payment amount was doable and that your payments were less than you thought based on DI, or if you feel like you are barely scraping by. One of my biggest concerns is that we won't be able to save for an emergency fund, or a new car. Our cars are old and since we can't use credit, I am worried about what would happen in an emergency. I don't understand why they can't allocate a certain amount for savings.

We are still going for the 7, but who knows what will happen in this state?

[chicagoed195]

I believe that is standard language to describe the amount of the payment that you or your attorney arrives at based on the calcualtion of your disposable monthly income as computed in accordance with the schedules you filed.

Every one in a Chapter 13 plan has a differing situation and perhaps a different outlook on the merits of the payback plan. I am in the 13th month of a 60 month plan. Some months are better than others. There have been and will be bumps in the road that will test you. I have what I would consider a reasonably competent attorney who was able to get me the best possible payment based on my circumstances. It is incumbent upon you to make sure that the numbers used in the schedules that are actual expenses are really accurate and that you get the best possible use of the allowable expenses that are based on the IRS tables. I have found that the funds that I am able to put aside for my emergency fund since filing have come from areas in which I have been allowed to claim an expense, but haven't had to actually incur that expense. Things like clothing, haircuts, charitable contributions, entertainment, lunch expenses etc. I am stretching these types of expenses as far out in the future as I can, or reducing them or eliminating them. I find that every day, before I spend a dime, I ask myself if I really need to do so. Girl Scout cookies are nice, but the Girl Scouts are going to have to make it without me for at least another 47 months.

Good luck with the Chapter 7.

[busby]

I'm about 37-months into my 60-month plan and in my experience - the first two-years were the most difficult. But I agree with the earlier poster that feeling comfortable with the plan before it's confirmed is best.

There have been months that I had very little left-over which felt scary but it also felt like the plan was "right on" when it came to income and expenses. I've been able to pay the larger, annual bills like property taxes. But that meant I was seeing money accumulating over the year that I couldn't spend. Was tempting, but I saved it. So when those bills came due, the money was there.

Do I feel like I'm barely scraping by? Absolutely. But I feel much better knowing that I can get by without worrying about spending most of my income paying only the minimums to service credit card debt and then MAYBE only scraping by paying everything else.

It is a completely different set of rules for me in regards to managing my money. But for the first-time in a long time, I feel like I'm managing it and it's not managing me.

The Girl Scouts called and said they understand.

[HHM]

mom2crazies...my sense is you are very much in the denial, I have followed some of your posts and it is nothing but constant worry and excuses for not taking action. You need to sit back and ask yourself, what happens if I do nothing? You appear to be in a position where you believe (mistakenly so) that the cure is worse than the disease.

[LadyInTheRed]

Our cars are old and since we can't use credit, I am worried about what would happen in an emergency.

Many people buy cars before filing BK. Incurring secured debt is not the same as incurring unsecured debt. Ask an attorney what the consequences would be if you bought a car before filing? Don't ask if you can buy one, because many attorneys won't directly answer that question.

My plan is liveable. I have more cash after paying monthly bills than I did before filing. Even so, it is an adjustment to get in the habit of not spending everything you have and putting something away every month for annual and unexpected expenses. I stop myself often in a store and ask my self "do I really need this?" The $250 car registration bill sitting next to me is going to put a dent in my savings, but that is what the savings is for. I used to pull out the credit card for that. The 13 is helping me develop habits that I wish I had developed over 20 years ago when I got my first credit card.

Being in a Chap 13 is not the end of the world. It's the beginning of a new financial life with a structure for the first few years that you don't get with a Chap 7. Not that I wouldn't prefer a 7, but a 13 has its advantages.

[Megatron]

Good stuff in this thread!

[mom2crazies]

I absolutely will NEVER put anything on credit again (nope, not even a car or a house). So, if we buy cars it will have to be cash. Which is a little more $ than a down payment (not that I want a Lexus. I would just want something reliable. I've learned NOT to keep up the Jones's). I think I worry because we have lived on the edge for so long and I have finally started making good decisions (thanks to Dave Ramsey). The thought of not having an emergency fund makes me sick (not that we've ever had one because the minute we got one...we got sued and had to pay for a bankruptcy.)

HHM - I'm not understanding what you are saying. Please elaborate.

[RunningMan]

I think HHM meant to stop second guessing yourself and just do it. It won't be as bad as you think. We will make our third payment in a couple of weeks. Before we filed we were struggling to make an IRS payment on back taxes that we couldn't afford, we had fallen behind on our mortgage and had arranged payments to catch up (that we couldn't afford), and had a creditor from a business line of credit calling us back to court to tell them where all our assets were. Life is much better since we filed. I can't go out and buy the latest gadget like I love to do, but we have what we need and we have been able to save money towards annual bills like property taxes and unexpected things like car repairs.

[shark66]

My case is very complicated due to SS for both myself and my children. So, I have no idea what is going to happen.

I am also wondering for those that are already on the payback plan, if you feel that your payment amount was doable and that your payments were less than you thought based on DI, or if you feel like you are barely scraping by. One of my biggest concerns is that we won't be able to save for an emergency fund, or a new car. Our cars are old and since we can't use credit, I am worried about what would happen in an emergency. I don't understand why they can't allocate a certain amount for savings.

We are still going for the 7, but who knows what will happen in this state?

Having read some of your posts, my understanding is that your situation is both complex and fairly unusual. I'm also under the impression that your attorney's handling of the entire situation leaves something to be desired, but that's just my opinion and I'm not a legal expert of any kind.

Having said that, my advice to you would be to fight to keep your Ch. 7 filing alive. Considering Ch. 13 might be muddling your ability to properly respond to obstacles that you're currently facing. All of your aforementioned concerns would be a non-entity in Ch. 7, but they become real issues in Ch. 13. That's exactly why you have to put up one heck of a fight and remain on your present course if at all possible.

As I've said in one of my previous posts - no one can force you into Ch. 13...if the battle for your current case is lost, you'll need to regroup, find a different attorney and plan very well for what lies ahead. Being a Ch. 13 debtor is no fun for the most part, although it most certainly is a HUGE learning experience.

My $0.02 only...

Good luck.

[mom2crazies]

Thank you. I am definitely holding onto the 7. Once we made the decision to stay with the joint 7, I feel like I will be able to handle things better. I figured even if it doesn't work out for me, it just might help someone in the future and that would be worth it.

The good part is that we have learned our lesson, I wish we didn't have to learn it the hard way, but I think when all of this is over, we will rebuild and we will change the rest of our lives. That is what keeps me going.