Chapter 13 Blues...

[nsupanda]

I've got the bankruptcy blues... We filed on Friday and I went to our meeting with the attorney with my budget. If I didn't have to cut anything from our budget I could afford a $575 payment. Well, he presented us with our 60 month payment plan of $1430 per month. Of course I went in with the realistic idea that I would definitely have to cut a lot of things from my budget, but not $855!!!

I went home, refigured my budget and after cutting out cable, internet, cell phones, reducing our grocery bill to $50 per week, no eating out, about $20 per week in general spending money, I was able to cut out $605 of the $855. I'm still coming up short $250 per month and I just don't know what I'm going to do for 5 years...

My attorney assured me all the numbers were correct and they even double checked everything. The only thing I can think of is that my husband and I both received pretty large Christmas bonuses this past year (we do not expect to get them ever again though). So that was figured in with our 6 month average salary.

Anyway, I'm just really depressed right now because the next five years seem like hell to me. I feel really sad for my daughter becuase she did nothing to deserve to live this way. I promised to take her to Disney World when she turns 13 (in 5 years).

I know that we got ourselves into this mess, and I'm so glad we decided to do it. I have no regrets because in 5 years we will be free. This prison sentence will just have to happen.

[IamOld]

I'm so sorry - we've filed and we SO FAR have a payment that's not great but we can live with SO FAR - 341 isn't for a few weeks yet...

How on earth did your atty go from 600 to 1400??? $50/week for groceries? Where I live even in a discount store, for four people, that's not enough to spit on...(or some such expression.) Are things that much cheaper in OK?

Do you have "fixed" costs in the 13 payment like secured and back taxes???? That is why ours is pretty much the same amount as yours...

if it's just he xmas bonus, perhaps you may want to ask atty RIGHT AWAY what would happen if you waited another two months to let that drop off??????

My best wishes to you my friend. For whatever it's worth, I'm right there with you.

[nsupanda]

I don't know, I looked at all the numbers they presented and everything looked right. I just don't know... The only good thing is my mom is my landlord and hopefully she can help me out with that. That is my only hope.

We don't have any fixed costs... and yes, $50 per week for my little family of 3? We'll be eating raman noodles and beans. What really makes me mad, and I'm sure I'll get over it soon, is that if I didn't work we could file Chapter 7 and get away with paying nothing back. Instead, we are going to be paying over $65k in five years (83% of out total debt). I know a lot of people who don't work, who have racked up tons of money on credit cards like I have, and they really have no punishment at all for it. Alternatively, my family will have to suffer through the next 5 years, all because we work for a living. It's like we're being punished for having a job. I know I shouldn't think this way, but right now, I am.

[IamOld]

nsupanda - I feel the same way - when I was laid off last year, I got a bit of severance - like an idiot, I asked for it in installments so that I'd have health ins continued - had I got it in a lump sum, Ch 7 no problem - because, then I really buckled down until I found a new job (Dec 2010) and increased my P/T gigs through the roof. STUPID idea - hence no Ch 7.

BUT - if you DO NOT have fixed costs - that is - NO SECURED/NO BACK TAXES in the plan THEN - at least my atty - would have been able to find expenses for you - in other words, groceries at $50/week are NOT reasonable no REAL - perhaps Des here could chime in...isn't median income around $56K for OK? I know you've already filed BUT...it just seems to me that just the IRS allowed figures for groceries are more than that...I found out that sometimes you have push a bit...even if he filed for you, he may not yet have submitted the schedules...can you get a face to face with atty beforehand???

And if Mom can help afterwards, that may after all, be the saving grace...but I still don't understand how with a family of three you're stuck with such high payments unless you have really high income...do you have car(s) with payments??

[nsupanda]

No, he allowed the average cost for food and everything else for that matter. It just leaves us with absolutely no spending money left over (even though I allowed $20 per week). I forgot to mention that my husband and I do the "envelope system" with some of our expenses. We put $350 into envelopes each month for things such as car repairs, popup expenses, propane (we live out in the country and we get REALLY unexpected propane bills that we have to figure in some way or another), and just misc. things like animal care expenses, household upkeep, etc. Most of the things in our envelopes are accounted for in the bankruptcy, but at average levels (and we seem to consume above average levels). Also, my husband smokes like a freight train and asking him to quit would just make things worse for me and everyone else around him. I blame NO ONE but ourselves. I just wanted to get on here and bawl a little bit. We are going to have to learn to deal with it and live with our choices.

[IamOld]

Well, I'm so sorry to hear that...maybe once the plan starts, you can work with atty to lower it...my best wishes to you. For whatever it's worth, my acct bal in the bank is -$24! :-)

[nsupanda]

I'm sorry for you too... My 341 is in June, when is yours? Will yours be for 5 years?

[IamOld]

Well, (this is my favorite cliche phrase of all time) - it is what it is, and we are where we are. Well, my case is complicated, because of stupid student loans spouse and I are over the 13 limit, so only spouse filed 13. Date is...third week of May sometime I think.

Atty's plan is to do me as a Ch 7 - somehow - that's his grand plan...because of MY 2010 taxes, there's NO WAY I can do another 13 - which would be miniscule (as spouse's plan pays IRS and secured arrears at 100%) - overall it's not "much" - around $120K of which about $50K is to IRS (rest are stupid student loans...)

Yep, five years!!!!!! Now...if I change jobs which I MAY to teaching, (I've no idea whether that'll come through) believe me, by late Fall she can easily convert to a 7! :-)

However, I'm prepared for five years....just can't do much more than the 1,400.

Hope and pray - that's all I can do...and try to not live under a desk curled up into a ball. My spouse told me, by the way, to get "help" or else. So that's what I'm doing...but you know my thing is this "help" can help with feelings, so to speak, but it won't make the finances better! Oh well. It'll increase my med costs! :-)

[nsupanda]

Hope and pray - that's all I can do...and try to not live under a desk curled up into a ball. My spouse told me, by the way, to get "help" or else. So that's what I'm doing...but you know my thing is this "help" can help with feelings, so to speak, but it won't make the finances better! Oh well. It'll increase my med costs! :-)

Hope and pray, that's what I'm doing! Get help or else??? Really? I'm so sorry... I hope everything works out for you... I'll pray for you too.

[IamOld]

:-) THANKS!!!!! As a wise man once said: "we're all in this together."

Best of good luck to you and let us know how things go...!

[buffetbuster]

Hello! I read your initial post and have a question for you. I'm new on here too and am meeting with my attorney on Friday to do credit counselling and I think that's when we'll figure out if we are Ch7 or Ch13. Please don't feel obligated to answer this, but I was wondering if you could tell me your income and if when you filled out your monthly budget if you were close to being over your monthly income.

Again, please don't feel obligated to answer, I know it's personal. I'm just trying to get a feel for what and how my Ch13 payment will be determined.

Dennis

[irishonyx33]

Nolo has a means test you can take online that I think you'll find helpful. I don't remember the website off the top of my head but it may be legal consumer or something like that. Search for legal consumer means test. You enter zip code and family size and all your income/expense information and it populates the IRS standards for some of the expenses for you, like food, clothing, and transportation.

[olivies]

I've got the bankruptcy blues... We filed on Friday and I went to our meeting with the attorney with my budget. If I didn't have to cut anything from our budget I could afford a $575 payment. Well, he presented us with our 60 month payment plan of $1430 per month. Of course I went in with the realistic idea that I would definitely have to cut a lot of things from my budget, but not $855!!!

I went home, refigured my budget and after cutting out cable, internet, cell phones, reducing our grocery bill to $50 per week, no eating out, about $20 per week in general spending money, I was able to cut out $605 of the $855. I'm still coming up short $250 per month and I just don't know what I'm going to do for 5 years...

My attorney assured me all the numbers were correct and they even double checked everything. The only thing I can think of is that my husband and I both received pretty large Christmas bonuses this past year (we do not expect to get them ever again though). So that was figured in with our 6 month average salary.

Anyway, I'm just really depressed right now because the next five years seem like hell to me. I feel really sad for my daughter becuase she did nothing to deserve to live this way. I promised to take her to Disney World when she turns 13 (in 5 years).

I know that we got ourselves into this mess, and I'm so glad we decided to do it. I have no regrets because in 5 years we will be free. This prison sentence will just have to happen.

You filed without knowing the monthly payment? A chapter 13 is supposed to get you on a budget, not put you at living on the poverty level. The Christmas bonuses- someone can correct me if I'm wrong, but I believe there have been court decisions decided where annual bonuses should be prorated over 12 months. And one time lump sum payments from sources where you don't expect to receive them again can be excluded. Again- I may be wrong- hopefully someone here can jump in and give you some direction. BUT it definitely sounds like your attorney has your income calculated incorrectly. Truth be told, if he's insisting it's all correct, I wouldn't hesitate to bring it up at the 341 with the trustee. Perhaps your attorney isn't terribly experienced. I've been in a 13 with an impossible payment. It doesn't just "work out" because it leaves you no way to account for car repairs, emergencies, increases in expenses that are beyond your control, etc. Somehow, you need to get a handle on this and fix it.

[keepsmiling]

OP, other posters have posted their income and their expenses here and received help in "fixing" the numbers. You might want to do the same.
No point in going into a 13 that's doomed from the start. That doesn't work out well for anyone.

[Flamingo]

I don't know, I looked at all the numbers they presented and everything looked right. I just don't know... The only good thing is my mom is my landlord and hopefully she can help me out with that. That is my only hope.

We don't have any fixed costs... and yes, $50 per week for my little family of 3? We'll be eating raman noodles and beans. What really makes me mad, and I'm sure I'll get over it soon, is that if I didn't work we could file Chapter 7 and get away with paying nothing back. Instead, we are going to be paying over $65k in five years (83% of out total debt). I know a lot of people who don't work, who have racked up tons of money on credit cards like I have, and they really have no punishment at all for it. Alternatively, my family will have to suffer through the next 5 years, all because we work for a living. It's like we're being punished for having a job. I know I shouldn't think this way, but right now, I am.

What you are feeling is the aftershock of living beyond your means prior to filing and learning to have to let that former lifestyle go and budget to the bone. It's a shock; it's a shock that hits most people when they realize they just cannot do what they did before while in a Chapter 13. Chapter 13 is the best budget teacher in the world and after a few years in it, you will never want to look at a credit card again and realize what I am saying. There are pros and cons to filing both a Chapter 7 and a Chapter 13, if you have to file a Chapter 13 due to your financial situation and your income, it is not the end of the world - you have your jobs, probably health insurance through one of your employers, a house or other assets, just to name a few pluses.

I kniow how you feel because I was once there trying to figure out how we were going to do it and get through the next 5 years. We did it, kept our house and 10 years later (we filed in 2/01), it's like nothing happened and we have learned to control our money and financial situation. You need to try not to focus too much on the right now and look long-term. And learn to become a budget master of your finances, shop bulk, shop discount and make that goal of Disney World in 5 years...