Debt at the end of your 13

[flower04]

Last night we added up the amount of debt we would have after our 13. We have about 9-10K in legal fees, and our student loans which are about $45k. Total, we will have about $55K when we are out of our 13.

I hate that our attorney didn't advise us that we that we coudl continue to rack up legal fees during our bk. I hate that we can't 'start fresh' and have a clean slate. I"m trying really hard to have a positive spin on this. Our 13 has been a great thing for us. We had to move, forced to live more simply and have really strengthened our relationships, knowing that at the end of this, that is what has gotten us through.

I'm posting this because I did not realize that you oculd continue to accure debt (other that student loan debt) during a bk.

[newbie2]

How did you rack up that much in legal fees that aren't being addressed in your plan?? I've never heard of that happening.

[Flamingo]

Are these legal fees of approximately $10,000 all related to your Chapter 13? Or did something else occur during your Plan? Your retention agreement which you signed when you retained your attorney would have spelled out what is and is not covered during your Plan as to any extra work that needs to be done, fees, filing fees, etc. Additional Motions and other court filings are usually not covered under a Chapter 13 fee.

[flower04]

Nothing has happened (no motions filed, etc) that would cause these fees. At the time we filed, we were current on our mortgage. Our attorney knew we had to move because of job change (husband was doing a really long commute) and we tried to save and live in the house, but it became too difficult for many reasons. Wear on his car, extra gas $, etc. It was figured into the plan that we would have RENT payment, not a mortgage payment. It was like our attorney didn't take into account that we wouldn't be getting a tax return for that mortgage credit. So, instead of getting a $3k tax return, and turning it over to the attorney/trustee, we had to pay $970 this past year. They were counting on that to pay our plan. We paid $1800 already before we filed. Then she tried to pull this crap that we neede to extend our plan from 3yr to 5 yr because we weren't meeting our payments. My husband got really upset and she said that we can pay for this outside of the plan once we are discharged.

It annoys me to no end. We have racked up over $6000 in medical bills since the start of the plan (we did have budget for it--but it doesn't cover enough). We feel like we are almost back to where we were before, just without credit cards to fall back on. Thankfully, we seem to usually have a $500-700 buffer from saving and scrimping, but it always seems to go to dr.'s. Our daughter had surgery this year and although we have decent insurance, it was still over $1500 to meet her deductible....and that resets for each family member every year to the tune of $3000. AND, that is NOT including co-pay dr. visits or ER/urgent care visits. I would say that 80% of our bk was a result of us having extensive medical debt. It just really sucks to go through all of it only to come out not really out of debt.

Just sharing my story in hopes that some other person will be more careful about catching that in the budget if they are planning to walk away (and leave) their property.

[newbie2]

Nothing has happened (no motions filed, etc) that would cause these fees. At the time we filed, we were current on our mortgage. Our attorney knew we had to move because of job change (husband was doing a really long commute) and we tried to save and live in the house, but it became too difficult for many reasons. Wear on his car, extra gas $, etc. It was figured into the plan that we would have RENT payment, not a mortgage payment. It was like our attorney didn't take into account that we wouldn't be getting a tax return for that mortgage credit. So, instead of getting a $3k tax return, and turning it over to the attorney/trustee, we had to pay $970 this past year. They were counting on that to pay our plan. We paid $1800 already before we filed. Then she tried to pull this crap that we neede to extend our plan from 3yr to 5 yr because we weren't meeting our payments. My husband got really upset and she said that we can pay for this outside of the plan once we are discharged.

It annoys me to no end. We have racked up over $6000 in medical bills since the start of the plan (we did have budget for it--but it doesn't cover enough). We feel like we are almost back to where we were before, just without credit cards to fall back on. Thankfully, we seem to usually have a $500-700 buffer from saving and scrimping, but it always seems to go to dr.'s. Our daughter had surgery this year and although we have decent insurance, it was still over $1500 to meet her deductible....and that resets for each family member every year to the tune of $3000. AND, that is NOT including co-pay dr. visits or ER/urgent care visits. I would say that 80% of our bk was a result of us having extensive medical debt. It just really sucks to go through all of it only to come out not really out of debt.

Just sharing my story in hopes that some other person will be more careful about catching that in the budget if they are planning to walk away (and leave) their property.

It makes more sense now...your plan had an estimated amount of income tax refund that would be going in to the plan to pay creditors, and that amount never happened. I'm sorry you're having such a rough time in the plan, have you considered a Chapter 7 instead? If the disposable income doesn't even cover attorney fees then perhaps you qualify now for a 7?

[lrprn]

Flower, you have new extensive medical bills that sound like they may continue coming in for some time with your daughter's health problems. Is there some reason your lawyer hasn't filed an amended Ch 13 plan that incorporates these costs that must be paid back even though they occurred after filing? They exist "outside" the plan (there's nothing being discharged) but the doctors and hospitals still have to be paid out of your post-filing income.

[LadyInTheRed]

flower, I don't understand how you have incurred $9,000-$10,000 in attorney fees since you filed. What fee schedule was checked on your Form 1305? If schedule 2 or 3, has your attorney filed Form 1307 to request additional fees? If not, she will have to if she is going to get more attorney fees.

ETA: I saw in other posts that you moved from one state to another during your BK. Is Oregon the state you filed in or the one you live in now?

[HHM]

The attorney fees for the chapter 13 should be paid IN THE PLAN ahead of other creditors. But yes, the student loans will survive as will any debt incurred after the filing of the case (except for the legal fees of your attorney). The attorney will factor in his anticipated legal fees as part of the chapter 13 plan and will modify the plan later on to address additional fees if it become necessary.

[flower04]

If I had a crystal ball....

OK, our fees are twofold. We filed in OR, moved to WA. No state income tax in WA. We had to consult our attorney regarding our home....some short sale/foreclosure advice. We also had to consult about the dr. fee's etc. Husband has one more semester left in graduate school when we filed and we were told we could combine that with our bk, but there was a serious problem and we can't and so we had to consult about that. I also went from being part time employed to not employed to self employed and that happened after we filed. Every time, we had to contact our office, but my income didn't put it within the range of needing to ammend our plan. OUr first year of tax return, we negotiated with our attorney/trustee to keep our tax return for car repairs since my husband's commute was so long. All in all, we have just had some "unfortunate" things happen to us and neede to consult our $350/hr+ attorney. She is a very good attorney but I don't think she really has time to process the nuts and bolts of real life.