New To Chap 13 Questions

[eltaur2000]

Do they take every single left over penny?

Can you set aside like a recreation budget on the plan?

Will they take my tax refund?

I have expensive bills like Ipad, Gym, cable can I include all these as needed expenses?

Do you get to keep anything over the "Disposable Income" for an emergency fund?

Should I run up my cards and stop using them 6 months before I file?

I travel allot and that's part of my problem I just cant even think of a life without traveling.

[jcj112562]

Do they take every single left over penny?

You will contribute all disposable income to the Plan. Whether that means every last penny is a function of how well the plan is written, and what expenses you *actually* have.
Can you set aside like a recreation budget on the plan?

Not really, this is bankruptcy, not a walk in the park. Generally you can find money from somewhere for limited recreation.

Will they take my tax refund?

If the trustee wants to take it, then the trustee will insist on that being in the plan. I suggest making it so you do not get a tax refund, therefore nothing to worry about.

I have expensive bills like Ipad, Gym, cable can I include all these as needed expenses?

Ipads and gyms are luxuries, and you will have a difficult time justifying them at all. Limited cable TV should not be a problem, but prepare for a shock if you are accustomed to having a huge cable plan.

Do you get to keep anything over the "Disposable Income" for an emergency fund?

Nope. you get to actually live within a budget and *find* places in that budget where you can save, to establish your emergency fund.


Should I run up my cards and stop using them 6 months before I file?

This would be called bankruptcy fraud, and not exactly what you want to be doing. Hell hath no fury like a Trustee that smells fraudulent activity.

I travel allot and that's part of my problem I just cant even think of a life without traveling

Sure you can travel. Surrender your dwelling, and hit the road like a hobo. Wintering in Cabo, and spring in Cannes are not going to be happening when in a Chapter 13..

Just a first pass at answers, but you need to wake up and smell the coffee.

John

[LadyInTheRed]

Do they take every single left over penny? You pay all of your disposible income to the plan. Disposible income is calculated based on your income, minus reasonable expenses. Your plan should be liveable and a good attorney will make sure it is. But, you very well may have to make some changes in the lifestyle you are used to.

Can you set aside like a recreation budget on the plan? Usually. How much is allowed will depend on what is customary in your district.

Will they take my tax refund? Maybe. Your reasonable expenses will include the taxes withheld from your paycheck. If you overwithheld, then the resulting refund is disposible income. Some trustees require Chap 13 debtors to send copies of the tax returns each year and require refunds be turned over. Others don't. It will depend on your trustee and how your plan is drafted. Any refund you are entitled to as of your date of filing is an asset that must be reported in your BK petition. If you can't exempt it, you can keep it as long as your plan pays to unsecured creditors at least the amount of the refund.

I have expensive bills like Ipad, Gym, cable can I include all these as needed expenses? Those are entertainment and recreation expenses. How much is allowed will depend on customs in your district. Be prepared to cut down on things that really aren't necessary. For instance, you don't need a Gym membership in order to get exercise.

Do you get to keep anything over the "Disposable Income" for an emergency fund? You build an emergency fund by working with your attorney to come up with the most genereous buget you can. Then you scrimp and save where you can to start building up an emergency fund.

Should I run up my cards and stop using them 6 months before I file? Asolutely not! That would be fraud. You should stop using your credit cards NOW. If you know you will be filing BK, most attorneys will advise you to stop paying them now too. Save the money you would use to make payments to pay your attorney fees and to build a cash cushion if your state's exemptions allow you to exempt cash. If you can't exempt cash, spend money on exempt items, necessary repairs to your home and auto, dental work you have been putting off and other necessary living expenses.

I travel allot and that's part of my problem I just cant even think of a life without traveling. You need to learn to live within your means. You may be able to travel some during a Chap 13, but it will require you saving in other areas of your budget. You can't declare bankruptcy and then go travel for pleasure at the expense of your unsecured creditors who are taking pennies on the dollar.

Welcome to the board! There is a wealth of information here. Spend some time reading the stickies and other threads and you will find much more information on these questions and how Chap 13 works in general. Also, schedule some free consultations with a few bankruptcy attorneys. Finding a good attorney is a very important keey to getting a livable plan.

Many people come here under the mistaken impression that Chap 7 is not an option for them. Are you certain you can't file a 7?

[lillymarlene]

Hi eltaur2000, welcome. On one of my schedules, I claimed $100 per month for recreation. I also have the least expensive cable plan, use dial up internet and my cell phone is prepaid (phone averaging about $20 per month.) jcj is right, it's doable, but no walk in the park. If I want to save, for example, I might forget the limited recreation, and/or take $$ out of the food budget.

[LadyInTheRed]

Sure you can travel. Surrender your dwelling, and hit the road like a hobo.

LOL! Sometimes I wish I had it in me to do that. But, as my horoscope said a long time ago, I tend to grow roots.

Can you set aside like a recreation budget on the plan?

Not really

The differences in our answers to that question is an illustration of how things will vary by local custom and each individual plan. My schedule J had a line item for recreation and entertainment. I think it was $50 for a two person household. But, not enough for a gym membership and Ipad!

[Guest123]

I will just say that all of the answers here are the norm but they are NOT the absolute answer to all cases.

All but one question depends on your case.

When we first started looking into a CH13 BK I found all of these answers here, but when speaking to others around us, family and friends there were a whole bunch of different answers that made me feel a lot better. And after talking to a referred BK lawyer we were even more relieved.

It all depends on the case, lawyer and trustee.

For some CH13 BK is a walk in the park. It is not a Hell Hole that some make it out to be...again depending on the case.

[IamOld]

LadyintheRed is very correct - it depends on many factors, local custom, etc - we have a regular cellphone plan - my work requires me to have a phone plus high speed internet access - that's not optional if I wish to stay employed, for example.

And yes, we have a "recreation" budget...mostly goes to kids :-) Well, all of it.

[AZNoName]

If you look around on the web, you'll find some attorney blogs on the ins and outs of a Chapter 13 that might give you the basic information you're looking for. My attorney has several very informative videos on his website that you might be interested in. Message me if you're interested and I will send you the info.