Does this sound right?

[psirasmom]

We are in the very early stages of 13 (all documents filed on Friday, along with proposed payment plan).

Our credit cards total about $30,000.00, and our medical debt totals roughly $6,000.00. We are current on our car loans (which are $21,500 and $10,200 at this point), and are 4 payments behind on our mortgage (so about $5500). We are also attempting to strip our second mortgage (HSBC....no payments for three years, and we have not heard from them - we were charged off last year, but no collections companies have called).

My attorney calculated that our disposable income is $1,245.00, which will be our plan payment. I'm confused though, since we aren't trying to "get out" of the car payments. If the second mortgage is stripped, our total debt load would then be about $35,500 (give or take). Why am I paying $1245/month over 5 years - where does that extra $39,200.00 go??????

[mountanddo]

30k in credit card debt and 6k in medical bills is more than 35.5k right there. Are you paying your cars outside of the plan?

[momofthree]

First off, what does your payment include? It may include your auto loans.

Secondly, once your mortgage is stripped it is included in your unsecured debt list, so your debt will be $30k credit cards + $6k medical + $5500 mortgage arrears + balance of 2nd mortgage being stripped. Plus, you will also be paying your attorney and trustee fees through your plan payment. After all is said and done, if you pay off 100% of your debt before the 60 months is up, then your plan will end early and you will get an earlier discharge.

Keep us posted on your progress...

[psirasmom]

Morning all!

I have an email in to my attorney - he didn't mention that my car loans were going to be included in the plan, but maybe that is the situation.

Now, if we are successful in having the second mortgage stripped, will the monthly payment amount to the Trustee change?

Sorry for all of the questions - I'm nervous, mainly because of the monthly payment amount vs. our actual expenses. I've calculated what we've spent each month on items such as groceries, out of pocket medical payments, etc., and my attorney said they were too high and that he needed to show a reduced amount - I'm paying $200 in co-pays/month at this point for prescriptions because of a condition I have, and that doesn't even touch the amounts that aren't covered for my doctor visits by our insurance.....this is SCARY.

[momofthree]

Your attorney stating that you need to lower your out-of-pocket medical expenses is a huge red flag to me that you need a different attorney. You should not be skimping on your necessary healthcare so that you can pay more to your unsecured creditors. I'm not sure what you were spending on groceries and such, but here is a link to the IRS national standards that are okayed by the courts: http://www.justice.gov/ust/eo/bapcpa..._standards.htm

Your monthly payment to the trustee shouldn't change based on your debt-load. It is based off of your dmi.

[psirasmom]

Thanks for the advice. I have emailed him three times since your post, and I've gotten one fairly vague response. He made a point to let me know that the debt load includes the second mortgage that we are going to attempt to strip. So what happens if the mortgage is stripped? Will our monthly payment, or length of payments being made be lowered? I've told him three times that we need to increase the medical expenses, but he hasn't responded. I've also asked if we are including the car payments in the BK, and if I should stop making them. No answer. I have an ACH set up for each car payment, so I need to get an answer of out him asap.

So, another question (I'm a pain - sorry - freaking out a little). If we pay $1245 a month for 5 years, there will definitely be an overpayment (even after interest and late fees) - what happens with that money?

He also told me that he's putting down that our groceries per month are $800. There is NO way that we pay that little, and I cut everything down to bare bones and store brands!

I'm starting to lose faith in this guy -it sucks, because I've already paid him a good chunk.

[momofthree]

Did you look at the link I provided for IRS standards? How big is your household? If you are a household of 4 or less, then you should be able to eat for $800 a month without problems. IRS standards provide $757/mo for food for a family of 4, plus $74/mo housekeeping supplies, and $67/mo for personal care items and services.

[psirasmom]

There are 5 of us - my oldest lives here 3 full days, and at college 4 full days, so I'm not sure how we'd "count" her.

[mountanddo]

Wow, what kind of food do you buy that costs more than $800 a month? When I was married and had two grown children at home full-time and a stepson every other weekend I think I spent about $160 every two weeks and probably $50 in-between for extra milk, bread, eggs, etc. This was 8 years ago and now I live alone but have grocery prices really gone up that much? I bought lots of meat and never bought store brands ever. It just seems like a lot. Maybe it's where you live that the prices are so much higher. If I had bought over $800 of food each month I probably would of thrown half of it away.

[psirasmom]

I'm starting to wonder myself about the food prices. We live in Massachusetts. We're down to a menu plan each week of one "beef" dish (usually the cheapest hamburg there is), a pasta night, a chicken night (I buy boneless, skinless thighs - I can't stomach the price of chicken breast!!!), a "breakfast" night, and then some form of casserole or a rice and bean dish so we have something through the weekend. There's nothing that we splurge on, and generally eat leftovers or sandwiches for work lunches.

[ValleYum]

I think I spent about $160 every two weeks and probably $50 in-between for extra milk, bread, eggs, etc. This was 8 years ago and now I live alone but have grocery prices really gone up that much?

Yes.

[LadyInTheRed]

(I buy boneless, skinless thighs - I can't stomach the price of chicken breast!!!), There's nothing that we splurge on, and generally eat leftovers or sandwiches for work lunches.

Boneless chicken thighs sound like a splurge. Buy them with the bones in*. That one little thing may not make a lot of difference. But, if there are other little things like that, they can add up. The fact that this one little thing came up in your post suggests there may be other little things you are overlooking. Food is one of my passions and the allowance seemed stingy to me too. But, it really is workable. Chap 13 is the great school of budgeting. Some of the lessons are harder than others.

have grocery prices really gone up that much?

Yes.

Absolutely. It's not always obvious because they reduce package sizes but keep the price per package the same.

*LadyInTheRed's favorite chicken recipe:

A very simple and yummy one dish meal!

Toss bone-in chicken thighs and/or legs, chunks of potatoes, quartered bell peppers, and quartered onions in canola or vegetable oil (I used to use olive oil, but cut that expense), add lots of finely chopped fresh rosemary (very easy to grow and in many yards and public rights of way, at least in CA), salt and pepper. Arrange in large roasting pan or on a cookie sheet without crowding. Roast in a 425 degree oven until the skin of the thighs is golden brown and crispy. (about 45 minutes). Try throwing in a handful of oiled garlic cloves during the last 20 minutes. Instead of rosemary, you could use thyme, sage or oregano, or some combination. Dried herbs will work too. Fresh herbs are very worthwhile to grow! Experiment with different vegis. Try turnips instead of potatoes. I used to use chicken breasts, but started using thighs to cut costs. I now prefer them because they don't dry out before the skin crisps.

[mountanddo]

I have to disagree here. If you are spending more than $800 a month and you are only spending 2-3 nights having meat you are spending WAY too much. Even $800 a month sounds like a lot. That is $200 a week. Even if you didn't use coupons this is still a lot of food. CUB foods recently did a series on making a weeks worth of food for $20. Now that was for 2 people and I have to admit that some of the stuff I wouldn't eat but it all was nutricious and eatable. The government might allocate $757 but do a google search and see how other people are spending around $400 for a family of five for a month.

[LadyInTheRed]

$200 a week for a family of five is $5.71 a day per person. I don't think that is generous. Just because people can live on half that if necessary doesn't mean they should be forced to in order to get a Chap 13 plan approved.

[ValleYum]

I have to disagree here. If you are spending more than $800 a month and you are only spending 2-3 nights having meat you are spending WAY too much. Even $800 a month sounds like a lot. That is $200 a week. Even if you didn't use coupons this is still a lot of food. CUB foods recently did a series on making a weeks worth of food for $20. Now that was for 2 people and I have to admit that some of the stuff I wouldn't eat but it all was nutricious and eatable. The government might allocate $757 but do a google search and see how other people are spending around $400 for a family of five for a month.

I don't see $200 buying a *lot* of food for five people, though.

I shop for veggies/fruit at the local produce market so we get more bang for our buck but but we still spend over $100 per week for just the 2 of us. When 3 pounds of ground beef is around $12 (in the extreme value pack - no less), a container of yogurt is .75 and cereal and apple juice are $3 each it doesn't take long at all for a cart full of groceries for 2 to add up to $100+.

Side Note: I am pleasantly surprised at how Walmart's Great Value store brand stacks up against brand name products.

My idea of extreme couponing is remembering to take the coupons with me to the store - but I am trying to be better about it.

$200 a week for a family of five is $5.71 a day per person. I don't think that is generous. Just because people can live on half that if necessary doesn't mean they should be forced to in order to get a Chap 13 plan approved.

I agree. I don't think there are any brownie points awarded by any Trustee for living below the national standards. You shouldn't have to eat a PBJ every day to be considered a success in your Chapter 13.