Started receiving Child Support after paying plan payments but before the 341 meeting

[kathlee29]

Question and TIA;

I have not received child support in 8 months and all of a sudden weekly payments came in last month, 4 weeks in a row. We filed in November and were to have our 341 last month but it was rescheduled to late this month. We have made two payments to our plan so far, before the 341. We are high income filers and are paying almost 100% as it is, with the child support that will put our payments each month at $3,775. All our debt is unsecured CC debt, no assets.

I guess my question is if Child support is exempt in our state why did our new lawyer say we have to disclose it? Also, when my son's father stopped paying over the summer our previous Chapt 13 was dismissed with out prejudice before confirmation and we found a new lawyer and refiled in November.

With our old case, we were new to BK, didn't do our homework and our old lawyer said we were paying at 100% and that was the end of it. The payments were too high even with the child support, let alone with out it, but the old lawyer included the Child support in our income even though I made it clear it was never on time or regular and due to end in 2 years. We literally had to borrow to make the 6 payments we made to the chapter 13 trustee bc our plan was so poorly crafted. BK mill, bad lawyer, semi complicated case.

We have the same trustee this case as last time and she was not fond of us to say the least and when our old lawyer alerted her that the CS had stopped and we asked to modify she said "we had plenty DMI to pay the $3,500 a month without it."

We did not.

Any advise, I am still pretty new to all of this. This is an amazing forum and I know that somehow someway, this will be over....(I hope)!

[lrprn]

Sounds like you are in a tough situation with an ex who pays support sometimes but is not reliable

I guess my question is if Child support is exempt in our state why did our new lawyer say we have to disclose it?

Your new lawyer is right. You have to declare the child support because the bk law clearly states you have to declare all sources of income, even if they are exempt. I'm not sure if child support is considered exempt in MA or not, but assuming it is then exempt income sources are added in the first Means Test income section and then taken out later on in the Means Test in another section.

How much extra is the child support adding to your monthly total income compared to what it was declared to be at filing?

[kathlee29]

My son's father is to pay $1675 a month, but I always have to take him back to court to get him to pay. Most recently we were back in Court in December hence the 4 payments in a row. He usually pays for a few months then stops for a year or so, I take him back to court for contempt, incurring legal fees and it goes around and around. He has never paid child support without being hauled back into court for contempt. He is garnished thru the State, but quit all legal regular jobs in order to 'work for himself' and be off the books. His wages have been garnished and he is to submit to the court yearly his employer but..he is now self employed in order to not pay the child support. The only reason he is paying currently, is because he was facing incarceration as this was his 10th contempt charge. The child support stops in January of 2014, 2 years into our plan.

If we tack on the $1,675 a month income for Child support, we are looking at an almost $4,000 a month plan payment, and if I am going to be paying the plan $4,000 I would rather save that up and settle some debts on my own and my husband can file his own 13 and he will have to pay back at 100%. This is all CC debt due to my husband losing his job and taking a new job at 1/6th of his old salary and credit limits dropped, APR's went up and we got caught up in that jam. I live in CT. Lawyer has said we will include the CS as income as it is coming back in, but yes the CS is exempt and my only hope is; I will have to explain to the trustee the unreliability of receiving it which she will see based on my bank account. I was just wondering out loud on the BK board if paying such a high amount to the plan which we cannot afford - if I would be better off taking my chances with the creditors, (I personally have 8 CC's, 100k debt, never paid a card late, went right into BK after deciding to file - on my credit report all CC's have been charged off). I called all the owners of my new debt (collection agencies, etc) after our first case was dismissed and have gotten .35 to .70 as #'s for a settlement, but obviously do not have a lump sum and cannot hope my son's father pays so I can use that to help settle.

Thank you so much for your reply.

[justbroke]

Yes, it must be disclosed, but you also get to deduct the "reasonable" amount for the support of the child(ren). That deduction is on line 54 on Form B22C (Means Test).

Generally speaking, never get too excited over the Trustee not liking your Plan. While it is a negotiation at some point, you can actually have a plan confirmed over the objection of the Trustee (or a creditor). So long as you (your attorney) has the law right. It is clearly in the Means Test what you do with support payments and they are deducted from "current monthly income" before the disposable monthly income (DMI) is determined!

[kathlee29]

Thank you JB!

My son whom I am receiving (sometimes) the CS for has severe ADHD and requires therapy, tutoring and other bills for (that were deducted on the schedules). I am just worried that the trustee is going to do what she did in our last plan which is literally up the payments way too high. That said our last lawyer didn't include ANY expenses on our schedule except rent and utilities, nothing else, which is why the plan failed, then the CS stopped coming in just like I told him it would and we had to have our case dismissed for failure to make payments.

We started out our last case as a Chapter 7 which the Chapt 7 trustee said was 'abuse' so we converted to the 13. My husband receives a few monetary gifts from his family now and again and our first lawyer didn't disclose that because he said the 'gifts' were not regular. So, at the Chapter 7 341 the trustee almost flipped her lid when we answered her honestly about the gifts and the credits to our bank account. Thus, we went into the Chapter 13 in a bad light, and then our last lawyer totally messed up our case from there...

ETA: we are a chapter 7 case without the monetary gift from my husbands family. But, we cannot refuse the gift as they would wonder why and we can never let anyone know we are in this financial mess.

I would like to continue with the payments as we have the past two months, its high but do-able; $2,250. We were able to have a nice Christmas (our second without any CC's!) and no we didn't have anything extravagant but that is ok, that is what got us into this mess. I guess my fears are the trustee will remember us from the last case and up the payments due to the CS coming in again.

Our new lawyer did say he could argue our case to the judge over the trustee not agreeing to our plan. At one point in our last case the Trustee said we had enough DMI to pay in 36 months at over 5k a month. Even after going over our last case page by page I cannot see where she got a DMI of over $5,000 a month, but I guess she would have as our last lawyer did not put a single expense on our schedule but rent and utilities, he didn't even ask us about medical bills (which are sky high bc of my son's therapies) or travel to get to work (train, subways, cabs, parking at train) or gas for the cars, nothing but rent and utilities were on our expense list. I have to say I was pg at the time of our last case and was high risk so had other things on my mind besides CC bills that were discharged/charged off and the BK stuff, thus I had no idea about schedules or expense lists and just went with what our old lawyer said.

Sorry for rambling! This forum is amazing, and I want to keep our BK case and pay the 2250 and move on with our lives. I hope the trustee goes along with that plan but if not our lawyer will have to take it up with the judge. The thought of 8 creditors coming after me demanding money and calling my family scares me to death.

Thank you for replying!

[lrprn]

You deserve to have a realistic Ch 13 plan filed this time that includes EVERYTHING, including your legitimate expenses for food, medical care for all of you, etc. It's a crime that your first lawyer messed things up so badly and you were screwed as a result.

YOU DESERVE TO HAVE A REASONABLE PLAN THAT YOU CAN LIVE ON SUCCESSFULLY FOR THE DURATION OF YOUR 13. Settling for any payment that's higher than it has to be is wrong. Allow your second lawyer to give you everything the law allows. Don't settle for anything less.

You've already filed once and failed because of an unrealistic plan crafted by an incompetent bk lawyer. Be patient. Get the plan you deserve within the constraints of the law, or you could be risking failing again. That's something to avoid at all costs. Let your new lawyer do his/her job that you've paid for them to do. Hang in there and keep us posted, ok?

[kathlee29]

THANK YOU Lrprn!

I agree that the plan can work when you factor everything in.

Our old lawyer told us after the Chapt 13 341 and we had made one 3500 payment at that point, he said that the 3500 payment "comes before baby food (I had a 6 week old at the time); said that the payment gets paid before you pay your electric bill." I told him we had literally ZERO dollars in our bank account b/c we made the payment and it was too high and he said "the trustee knows where your father in law lives, and knows he is wealthy she doesn't feel sorry for you, MAKE THAT 3500 payment every month until I tell you to stop."

We were only able to scape together 5 more payments before we ran out of borrowing privileges from our family members. After 3 months of non payment the trustee dismissed our case without even allowing us to explain that the payments were too high, I was no longer receiving CS and the only contact we had with out lawyer was about PAY MY FEE via his paralegal, we never spoke to our lawyer again after the 341. If we sent him an email his paralegal would get back to us in 48 hours -- muddying the waters even more. I thought, how is this a fresh start? It was very bad indeed.

My new lawyer, explained to me what went wrong in our first case; the expense list. He told me to make a list of every single penny I spend, groceries, gas, even a manicure, it might not be 'allowed' but I had to add everything up, exterminator bills, medical/dental. I have an incredibility thorough list at this point. New lawyer said trustee might fight me on $1200 grocery bill a month for a family of 4 but the negotiating will take place non-the-less. Thank you for the get the plan I deserve, that is so true.

My new lawyer gets back to us personally via email quickly and always has answers to our questions. The total opposite of our last lawyer. He said he expects the trustee to argue the plan but he will do what he can and we can always take it to the judge.

Our new lawyer advised we not accept the gifting and file a 7 but we can not do that, and this is the situation we are in and we just want to get thru it. We have no assets, we rent and we have nothing to show for all the cc debt, literally nothing to show for it, needed it for medical bills, oil heat bills, etc when my husband lost his job.

Lawyer told me today that our plan payments WILL go up b/c I have gotten the CS 4 weeks in a row, but he is putting a note on that portion of our schedule stating the CS has never come in regularly. I do not want the next 5 years of my plan ruined by the ex paying all of the sudden when a month from now I will get one payment of $325 then the next month no payment and .... another plan down the drain.

I will keep you posted for sure!

[kathlee29]

Update...

The Child support stopped as soon as it started; so the Chapter 13 TT said we would average out the CS paid in the past year and divide it by 12 mos and use that as our extra income, and it amounted to $138 a month, so she didn't increase our payment.

Not that any of that matters now anyway, my husband was laid off in January and we were to have our 13 confirmation last week but we unable to be confirmed due to his job loss. We converted to a 7 and have our 341 for the 7 next month. Discharge *God* willing in July. It has been a 2 year 'journey' but we learned new spending habits, the credit cards are gone and we only buy what we NEED, not what we want. We will have to give up a car in the 7 but my FIL is going to give us an old car he doesn't use anymore (not worth 5k); and we rent don't own and have no assets of any value left to keep. Most watches, and jewelry were sold 4 years ago to keep making the min payments on CC's hoping my DH's line of work would pick up. It didn't.

Thanks to everyone here, this forum has been invaluable to me during this process.

[AngelinaCat]

Thank you for the update. Congratulations on your Ch7. Please let us know how your 341 goes! Good luck1

[kathlee29]

Thanks AngelinaCat! We have our 341 for the 7 with the US TT in 3 weeks, I am a nervous wreck. Why the US TT and not a regular TT?! UGH!!!

[kathlee29]

Update ...

Our 341 with the Chapter 7 TT for the conversion went well; TT asked us the standard questions, then said no asset, no distribution, and our lawyer said we should expect the discharge on July 16th. The TT even made a joke with us as he looked at his calendar and said that the 180 days since filing is up this Friday and should anyone die by Friday and we inherit any money we need to alert our lawyer...everyone got a chuckle even tho that is a grim thought!

It feels surreal to have this almost over.

It has been almost 2 years since a Chase judgement against my husband wiped out MY bank account when our newborn was just 6 days old and left us with ZERO dollars in our bank account with two kids to take care of for two days until we filed bk and got the lawyer to help us take care of it. We now have a tiny stash of cash out of sheer terror of anything like that ever happening again.

I cannot wait to check Pacer and see "discharged."

Thank you to all of you here on this forum!

[justbroke]

I am glad to read that your fresh start is now closer.

[kathlee29]

Pacer update...

Chapter 7 Trustee's Report of No Distribution: I, xxx xxx, having been appointed trustee of the estate of the above-named debtor(s), report that I have neither received any property nor paid any money on account of this estate; that I have made a diligent inquiry into the financial affairs of the debtor(s) and the location of the property belonging to the estate; and that there is no property available for distribution from the estate over and above that exempted by law. Pursuant to Fed R Bank P 5009, I hereby certify that the estate of the above-named debtor(s) has been fully administered. I request that I be discharged from any further duties as trustee. The 341 meeting was held. Key information about this case as reported in schedules filed by the debtor(s) or otherwise found in the case record: This case was pending for 1 months. Assets Abandoned(without deducting any secured claims): $ 38255.00, Assets Exempt: Not Available, Claims Scheduled: $ xxx-xxx, Claims Asserted: Not Applicable, Claims
scheduled to be discharged without payment(withoutdeducting the value of collateral or debts excepted from discharge): $ xxx-xxx. (Coan, Richard) (Entered: 05/16/2012)

I hope the next 60 days goes nice and easy...

Thank you JB your posts have helped me more than I could ever say

[AngelinaCat]

Hi kathlee: your Hamster troupe is being trained even as we write.....

[kathlee29]

Hi kathlee: your Hamster troupe is being trained even as we write.....

I don't know what this means! But, I hope its something good!