How to estimate what my Ch 13 play payments would be???

[seanp951]

Hi everone.

I've been contemplating Chap 13 for a while now. I have looked into ch 7 and do not believe I qualify. I earn about 140k/year. My credit card debts are at about 80k. I have two vehicles, total debt on those is about 40k combined. i have a 120k student loan that I pay about $1000/month on. car payments are 450/month on one and 550/month on the other. both have about 3 years until paid off.

I have a spreadsheet with all my credit cards and monthly bills / minimum payments, etc. I am paying about 3500/month in credit card minimum payments. OMFG... I don't know how I got so deep in debt.. it's scary.

between my housing expenses. Mortgage is about 2000/month. student loan is 1000/month. credit cards are 3500/month. I bring home about 7500-7800/month in net income.

so just the house/cars/studen loans/credit cards =
2000
1000
1000
3500
total = 7500. that does not include stuff like food, power, utilities..

basically my life style was exceeding my income.. or at one point was at or near it. over the past couple years I took several pay cuts at work.. so I was basically living at or near my means.. then took a pay cut of almost 20-25k/year... but didn't cut down on lifestyle.. and the credit cards just ballooned to support my lifestyle... my mistake.

i am married. three kids. i have a stable job and do not expect a layoff or anything like that. i could get additional cuts in pay down the road, but should not become unemployed.

my house is also upside down. i owe 380. a 300 first and an 80k second. the market value is now about 250k. i believe a 13 would allow me to wipe out the 80k second..and while the end result would be that my house is still upside down.. it would knock out a 650/month payment on the second....

here is my big questions... I have found online means calculators.. ways that I can figure out that I do NOT qualify for a ch 7.. but how do I figure out what my chapter 13 play payment.

i found one website that asked for my total debt amounts, income, and gave me an estimate of about 1100/month.. but the calculator seemed way too basic to give me a real solid number.

I"m basically living check to check right now.. i Have ZERO spare money and if anything I am going negative on a monthly basis. I don't eat out.. we maybe take the kids to islands for a burger once a month... i took my wife out for a nice dinner / weekend out for our anniversary.. but aside from that we are eating in, and not doing anything that costs money.

if I go onto a chapter 13, am I going to be spending thousands per month on a plan payment and basically be living like this.. broke off my a$$ for 5 years.. or will there be surplus each month to try and save some, be able to take the kids on a trip to Disneyland, stuff like that?

i'm basically wondering if my life under a ch 13 will have more cushion than I have now.. because right now we have NO money. we are at the point where by the time I get to the end of the week and i'm a few days from a paycheck i have no money in my account to even buy gas for the car.. it's sick to make the kind of money I do and be this deep in debt.. it's disgusting... in many ways i'm ashamed i"ve wound up in this situation.. but it needs to be fixed.

[IamOld]

Don't feel ashamed!!!!!!!!!!!!!!...many of us have been there :-) As the 13 gurus will tell you here that a "well designed" 13 may not be easy, but will be BETTER than what you have now.

Did you try the Nolo calculator? http://www.legalconsumer.com/bankruptcy/nolo/ When you've completed it, it will give you an approximation. BUT!!!!!!! there is NO!!!! substitute to a good bk atty doing the calculation. As others will also tell you, have a free consult with more than one!!! (By the way, during the 13 the student loan will go into "remission" (for a lack of a better term)...of course it survives BK and will accrue interest) BUT once your plan is confirmed if you want to send them $$ you can...

And don't necessarily assume you cannot do a 7...maybe not likely but don't assume...

anyway, the attys will tell you what is and is not possible.

Here is the other thing - we didn't have a chance to do this...IF!! you will be doing a 13, you may want to build up some cash/exempt assets - so you talk to atty, retain atty, and say file in a few months - meanwhile you STOP!!! paying all credit cards (yes they'll call a gazillion times per day - so you get a google voice # and change your "home" phone to that before you stop paying) SAVE that $$ - finish paying atty, and then file in a few months....

ALSO - sounds like you're in a standard 10 year student loan repayment - you can get an up to 30 year period - if you want - BUT FOR NOW do NOTHING until you talk to BK atty!

[As the Liverpool Football Club song says "You'll never walk alone!"]

[forgotten]

First of all, do you qualify for a Chapter 13? The unsecured debt limit in a Chatper 13 is $360,475. Your student loan is considered unsecured, as well as your second mortgage (based on your stated market value), and of course all of the credit cards.
At last check courts were somewhat divided on if the unsecured portion of the 1st lein should be considered unsecured as well for the purposes of the debt limit.

[LadyInTheRed]

a "well designed" 13 may not be easy, but will be BETTER than what you have now.

That's almost verbatim what I was going to say. Things are much easier for me than they were before I filed. I'm stripping my 2nd and my plan payment (which includes a car payment) is less than half of what I was paying to CCs and the 2nd. It's a little scary at first not having a credit card I can pull out for an unexpected expense (like the rock through my car window), but I've made it through 16 months and am starting to build a cash cushion for the first time in a long time. California's wildcard exemption helps a lot because, as IamOld suggests, you can build a cash cushion before you file.

Make appointments for consultations with at least 3 attorneys. Add your last 6 month's income and the value of your cars, your home and any other significant assets to your spreadsheet and email it to the attorneys before your appointments. They won't ask you to do that, but I did and all 3 attorneys ran the means test before I got there. It helped make the meetings very productive.

Please don't be ashamed. You are in good company. The important thing is that you recognize the problem, fix it and learn from it.

[seanp951]

Iamold-

That is the means test calc. I've used it and don't qualify for a 7. It says I have about 1500 extra per month. Is the result from the means test very close to what i wouldpay in a 13?

If that is the case, 1500 per month is TONS less than I pay on unsecured debt now!

[IamOld]

Hello sean - yes I would say that's probably the "worst" case scenario - a good atty could get that down a bit, IF you filled out the Nolo test conservatively :-) And, as Lady said, for many many people the 13 payment is a lot less than before!!!!

[mountanddo]

Everyone must be using that calculator because I've tried to use it numerous times and it either times out or crashes. Are there any other ones out there I might try?

[seanp951]

If I am able to pay 1500 -ish per momth instead of 3000-3500 on credit cards and another 650 or so on my second... WOW.

I'd feel amazing. I'd be way better off than I am now. I'd be able to save something, and not feel like a slave to my debts.

I'd have thousands more per month than I do now!

I'm gonna start talking to some lawyers in my area that do BK.

But. M going to try and be strategic about it. I'll stop paying for a bit and amass that money for an emergency fund.

As to changing my phone number so the bill collectors don't annoy me constantly...how did you put goggle voice to use.

I actually have a google voice number already gut don't use it for my credit cards. Do you setup your "Home" phone number with the credit cards as the google number or do you switch over to google voice and let them just call your old numbers??

I know with google voice you can try to block certain numbers... Although I've never been successful in setting that up yet.

Any guidance on how to avoid the nonstop calls while I'm not paying but not yet in the BK? Thx!

[mountanddo]

I actually just had any calls from those numbers sent directly to my voicemail on my cellphone. Most the time they didn't leave a message. As for my home phone I normally use my cell so I just turned the ringer off.

As for having thousands left over for the month...I don't think you are actually allowed to have thousands left over. For instance just because you say you spend xx amount on entertainment or groceries doesn't mean they will "allow" that much. It may be some of that will be incorporated into your DMI. But then again, as I said in another thread, I'm not very good at math.

[seanp951]

For this of you who did a chapter 13... Did you have enough money to pay for necessities, gas, food, and save a bit... Or are you living check to check struggling like you were when you were pre-BK?

Right now, if I pay my minimum credit card payments, the mortgage, and the cars, there is barely enough to afford the necessities like food and gas forvthe car. I have zero to save.... I'm hoping life in a 13 is better than it is now!

[jange]

seanp951, yes, things are better post bk. When you do you plan your entire budget like necessities, gas, food, etc are built into a good plan. Are you able to save, yes, but it comes from not spending all your budgeted money. Savings is not a line that is built into your plan. I still feel like I live paycheck to paycheck, difference is everything is paid, I put away about $200 a month. Sometimes more, sometimes less. I am putting money into my 401K. So yes, things are much better.


20 payments made!

[mountanddo]

For this of you who did a chapter 13... Did you have enough money to pay for necessities, gas, food, and save a bit... Or are you living check to check struggling like you were when you were pre-BK?

Right now, if I pay my minimum credit card payments, the mortgage, and the cars, there is barely enough to afford the necessities like food and gas forvthe car. I have zero to save.... I'm hoping life in a 13 is better than it is now!

The trick I think is finding the money to save just like anyone else on a budget. Take away your credit card payments and factor in what you would spend on things like groceries, gas, toiletries, laundry etc. Then research what is allowed in your state. If you typically only spend $200 month on groceries but you are allowed $400 then that is where you are going to find the money to save. The opposite is true as well, if you spend $400 on food but are only allowed $200 then you are going to have to find a way to live within the allowed amount. That's why I said that you won't have thousands "left over". It may seem like you are living better as you have budgeted in the necessaties that you wern't able to before. I think it's a good idea to get all your ducks in a row before you see the attorney. You don't want to lowball your expenses and end up with a payment that you are struggling to pay each month. A good attorney will help you budget that.

The problem that I have is that I don't make a lot of money so I did have to actually lowball some of my expenses and leave some out so that there was DMI left. The alternative is wage garnishment at 3 times as much so I'm ok with that!

[seanp951]

thanks for the info.

here is a good question - are there certain expenses that they *allow* for but ONLY if you actually have them? like say my home/auto/life insurance. I have all those policies. I have $500 deductibles on my auto policy. Would I be advised to go and just get ZERO deductible policies... if they let me have credit or money for my insurance costs.... then why have a deductible during the chapter 13 period? if I am only allowed a certain amount for insurance.. then it's ideal to only have as much insurance as I need, but not too much.

it sounds like with things like cars - there are set limits. about $500/month per car, two car max. but what about other things like insurance? i do NOT have disability insurance... or long term care insurance. can I go buy those things now and get credit for them in the plan?

I also noticed in the means test calculator, costs for child care. My wife currently does all the child care at home.... are we allowed to deduct child care expenses even if we aren't using them? what if we decide we need child care during out plan?

i'm confused if you get to deduct these expenses even if you don't use them - or not? if you can't deduct them unless you utilize them, it would almost make sense to start using them... start getting a lot of babysitting / daycare costs between now and when I file so I can show a history of the expense.. then legitimately show that I "paid" for those services..then file a 13.. and then if I opt to "not" use the daycare services.. i'd be able to keep that money???

thanks.

[newbie2]

thanks for the info.


I also noticed in the means test calculator, costs for child care. My wife currently does all the child care at home.... are we allowed to deduct child care expenses even if we aren't using them? what if we decide we need child care during out plan?

i'm confused if you get to deduct these expenses even if you don't use them - or not? if you can't deduct them unless you utilize them, it would almost make sense to start using them... start getting a lot of babysitting / daycare costs between now and when I file so I can show a history of the expense.. then legitimately show that I "paid" for those services..then file a 13.. and then if I opt to "not" use the daycare services.. i'd be able to keep that money???

thanks.

Sean, I'm an advocate for pre-planning as much as a person can for a successful Chapter 13. However, you are proposing making quite a few changes (insurance deductibles being lowered to -0-, adding more insurance, daycare that you don't currently pay for, etc) If you go line item by line item trying to find ways to add expenses only to reduce them after you file, that could be considered "bad faith". I know this is stressful, we lived it for 5+ years, but don't keep trying to find ways to beat the system if your expenses are not legitimate. It could all very well come back to bite you in the rear end.

[momofthree]

If your wife is not working, childcare expenses will not be allowed, even if you can show proof of them. If your wife is working, and you've been struggling working alternating schedules to avoid childcare costs, then getting childcare may be a good idea.

Honestly, it sounds like you are looking for ways to game the system, which is going to end up getting you into trouble. Be honest and play by the rules. It's time to get realistic and learn to live within a budget.