Chapter 13 Experience Please

[georgiagin]

challenges:

feel like life is on hold. All our planning is for "when the BK is over"....god i hate the waiting. Not being able to contribute to 401K....

[13inOR]

Georgia, I totally know what you mean, it is like somebody hit "pause" on your life. Thats one of the reasons we had to find a way to pay ours off early (thats not always possible or advisable, but in our case was ok to do as our plan was 100% anyway) because my husband could just not mentally handle it. I could more easily put it aside and take it one day at a time but all he could see is the black cloud of bankruptcy over is head, holding him back and interrupting his life...HE DROVE ME CRAZY!!!! So, I know what you mean. Thats why its important to find a way to take it a step at a time, find something encouraging in it, reframe the way you look at the payment, etc.
Paying off early is not usually a viable option, but many, many people make it to the end of their scheduled payments and have a great sense of accomplishment to show for it. Good luck in your plan!!!

[aa06a47]

Well, I just mailed my first payment, 1 down 59 to go.... I think the analogy of being put on pause is a good one. Truth was, I was on pause the last 5 years, just didn't know it. After these 5 years, pause should move to play and it's back to living. As long as my payment doesn't change, it will be the lowest payments I've made in a long time. Only problem, I don't have the cards months I'm over extended so to speak. Mac & Cheese until I get a little saved.

[bankr]

For anyone considering filing just remember this.... do not wear jewelry to court!!! I've heard the horror stories of people having jewelry confiscated at the request of the trustee.

Personally, my experience has been fantastic. Of course, its a humbling experience but I wish I had filed sooner! The secret to my success however is BUDGETING! I have a budget and I stick to it - something I never did before. I know what I'm spending this week and I know what I'll be spending next year. I have total control over it. I was one of those people that got my checking acct balance from the ATM slip. No wonder I went bankrupt!

After 2 years of going without new things, without having a lot of money in my pocket, and 2 years of telling the kids, no you can't have this or that - I'm finally on my feet. 12 months to go & I'll be done!

[aa06a47]

Yeah, ATM slips are good sources for balances, howver, as you said, best to know before you go to ATM what is in the bank. In my case, keeping track of that amount has been easy. I am sure if you can get liberal exclusions, you do have an opportunity to make this a true learning experience on money management.

[anncraf]

chapter 13 experiences

We are 4 years into a 5 year plan It hasnt been to bad they take the trustee payment right out of his check so we dont have to worry about that. The only thing I would say is to make sure you keep current on other bills that are outside of the plan. I am going through this right now with our mortgage company. It is so much easier to be current and I have learned the lesson the hard way

[aa06a47]

We are 4 years into a 5 year plan It hasnt been to bad they take the trustee payment right out of his check so we dont have to worry about that. The only thing I would say is to make sure you keep current on other bills that are outside of the plan. I am going through this right now with our mortgage company. It is so much easier to be current and I have learned the lesson the hard way

Once my payment plan is "solidified" or approved by the trustee, I will sign up for the automatice payment plan. Having it taken directly out seems like a good idea. I have heard that sometimes, at the end of the plan, it takes awhile to get the automatic payments stopped.

My question is though, if they take it directly out of my check, and the fact that my payment will always be due on the 3rd, and I only get paid once per month on the last day, there is a good chance it won't get to them on time. My trustee doesn't allow banks to "transfer" the money to him, so I assume they will mail a paper check to him. Are they going to say anything about being late.

[13inOR]

Aa, I had my payments taken from my check twice a month, and never had any instance where the trustee said they were late. They just accumulated funds over the month, and disbursed every month on the last business day of that month. It looked like it routinely took a week to 10 days after my payday for them to get the money from my employer, but they never seemed concerned with it.
I think they are a little more flexible when its auto deduction.
Also, when you are close to being done paying into the plan have your lawyer submit the request to stop the wage order, this will in turn stop the employer from deducting and that way you wont have that overlap of your plan being done but your employer still deducting because they didnt get the wage order stop notice in time. You will still need to mail in whatever payments are due by then of course, to the end of the plan. This will just stop the deduction part of it.
They will refund it, but in my experience they take their sweet time,
and since you will have been paying for 5 years, I know you will look forward to having a "whole" paycheck again!
PS, I am still waiting for my refund from
the trustee, its now been 2 full months. My wage order was stopped in March
so thats done,but he owes me almost 2 grand of overpayment because the wage order didnt get stopped quite in time. Anyhoo, thats my thoughts on the matter.

[aa06a47]

Thanks 13inOr, some more good advice for us Chapter 13's to take from someone who has been there, done that!!!

[Goldie]

Chapter 13 Experience

Hello.. we filed Chapter 13 last September. So far, so good. We are in much better financial condition than before we filed. I had lost my job and was unable to find another for 6 months; that put us in dire financial straits, as we had moved in to a fixer-upper house, and it turned into a major money pit.

We are finding ways to cut expenses. We have five rescued dogs, so that is always a concern, as two of them have health conditions and require medications daily.

All in all, we are committed to make this work. We are on a five year plan, and will stay with it at least for 3 years, and then maybe look into refinancing our house.

We try to keep a positive attitude, and so far, we are feeling very optimistic.
I was surprised to hear that a lot of people who file Chapter 13 never complete it. I know there are always extenuating circumstances or life happenings for some people...but for the life of me, I can't see how someone would go through all the trouble of filing a Chapter 13, and then just stop making payments.

Keep smiling...it makes everyone wonder what you have been up to!

[SinkingFast]

Sometimes, it's the attny the filer chose to work with, Goldie.

The first attny we Consulted with was going to put us in a Ch 13. No question at all about considering Ch 7. We had to be a 13 in his mind.

He never even did a Means Test. He just took Hubby's net and started deducting expenses. For the most part, the expenses were HIS expenses. Not what we really spent to live. Other attnys we Consulted with later said we were borderline 7/13 and they'd have to run the Means Test to see where we fell. We fell on the 7 side, but it didn't matter to that first attny.

We spent too much for auto insurance to suit him so he dinged us $50/mo there. Our cell phone bill and phone bill added up to too much so he knocked off $50/mo there. We spent too much on food, so he knocked off $200/mo there. He did add a bit for cleaning expenses, so we picked up $15/mo there. And he added in some for entertainment, which we hadn't written down. Then we spent too much on vehicle maintenance and gasoline, so he knocked off $200/mo there.

The whole time he kept saying, "The Court won't allow......" or "We can't submit this much. The Court is used to seeing......."

And,...... Excuse me, but I can't do a thing about the fact that our kids are teenaged drivers and our auto insurance company charges us $3K+/year.

We've already cut back on the food expense. Should we all eat a meal less each day to reduce the food bill further??!!

We haven't bought hardly any clothes in over 2 years. We're gonna have to start buying some new things soon. All of us have clothes with holes in them. Hubby, son, and I all need new shoes.

If you have an attny like that set up your budget and your payment plan, it's no wonder that Ch 13 plans fail.

[aa06a47]

Why do Chapter 13's fail. I've done a little research:

1) The filer only filed to buy themselves some time. Never any intention of making it work. Most articals point this as the #1 reason they fail by the way.
2) Unforeseen events, job loss, natural disaster, health reasons, major home repairs.
3) Budget not realistic.
4) Debtor fails to live within the budget and continues to spend like they did pre-bk. Chapter 13 is a belt tightening. When you enter in it you must accept that you will have to spend within what you make.

Like SF said, some budgets are made unrealistic. I doubt the judge or trustee has been in a grocery store in awhile so they don't understand it cost more than 200/month for groceries.

In my own chapter 13 plan, I have places where they didn't give enough, but enough other places where I got too much so it should balance out. As long as #1 and #2 above don't happen, my plan should be the way it was intended to be...won't be in poverty, but will have to make sacrifices in my lifestyle choices. I can enjoy life, but just can't go to the Plaza to do it.

[13inOR]

I agree, AA, ours balanced out as well. Thats how we were able to manage,
and even save a few dollars here and there. Its definitely not a cakewalk, but its really quiet a good learning experience. I would assume people might
be less apt to get in financial straits (if they can help it of course) after completing a chapter 13 than a chapter 7, because it does teach you a lot.
Not that everyone qualifies for a chapter 13 of course, sometimes a 7 is
inevitable.

[aa06a47]

Before the law changed, I beleive you had a choice between a chapter 7 or a chapter 13. I am not sure what the actual guidelines were. I do know I read about judges throwing cases out for abuse and making the client convert to a chapter 13.

I do not know why in the grand scheme of things, that the congress has mandated "all" disposable income. If my plan gets approved as is, I should be able to make it barring any unforseen circumstances. But 5 years is alot of time to not expect some sort of unforseen circumstances. I doubt I'll be able to save much if any money during this time.

What I'm trying to say, a Chapter 13 person is at least paying some of the money back. Why make it so damn hard on them? In reality, in 5 years (most chapter 13's will be 5 years now) the person will emerge from bankruptcy, for all practical purposes, with nothing but a good lesson.

At least the Chaper 7 person will start immediatly rebuilding...rebuilding equity in there home, putting money in a 401K plan, saving for the future or however they chose to spend there money, not worrying about if they get a raise if the trustee is going to get it all. Not worrying what happens if someone dies and leaves you some money.

There is really no difference in a chapter 13 person and a chapter 7 person other than income. Why punish someone more for making more money? Off my soap box and back to regular scheduled programming.

[thirdtimer]

47th month of 60 month or 5 year plan

Glad you started this thread. Today makes our second complete month of our Chapter 13 payments. My husband gets paid every other Friday and works for a larger company so it's easier to get a wage order done there. So far we are doing okay; actually we are doing much better. We are really trying hard to stick with the envelope system and stash away any extra money that we save. The hardest part for me is handling those pesky little things that seem to come up. I am learning to say "no", mean it, and not feel guilty about it. My kids will thank me in the long run.

I guess I'm a little concerned about my husband's surgery coming up this summer. We couldn't wait any longer to file and had to do it in February. He has an account we're including in the BK at the hospital where he will be. I don't know if they will be cooperative or not. Thankfully, his attending physician knows our situation is so understanding. My husband did not ask to have a chronic illness, nor is it stress related like everyone wants us to believe!! (Sorry--pet peeve of mine!)

Sorry so long. Again, thanks for starting this thread and good luck to you!