Questions about Chapter 13

[Gadmus126]

My husband and I are filing Chap 13 the lawyer said we make too much money to file Chap 7 in our inital meeting with the lawyer he told us that we needed more debt and we should buy another car so we did that. A friend of mine told me that we should have never done that and they will dismiss our case based on fact we bought a used car. Our other car is paid off he told use we had to put a lien on it. The lawyer is also going to cram down our second mortgage. Right now we receive a big tax refund will the court want to take it?

I really don't understand chap 13 I was reading some threads on here and do you have come up with a budget and and give that to your trustee? Do you have to ask your trustee when you make big purchases? How does this work. Thanks

[lrprn]

[B]My husband and I are filing Chap 13 the lawyer said we make too much money to file Chap 7...

This may indeed be the case, but whether you can file Ch 7 does *NOT* depend solely on the amount of money you make. If you've only talked to one bk lawyer, you should talk to 2-3 more before retaining one to make sure you truly cannot file Ch 7.

.....in our inital meeting with the lawyer he told us that we needed more debt and we should buy another car so we did that. A friend of mine told me that we should have never done that and they will dismiss our case based on fact we bought a used car.

Your friend is 100% wrong. It's very common to purchase a new or used car right before filing Ch 13. Your case will *NOT* be dismissed.

Right now we receive a big tax refund will the court want to take it?

It depends completely on your trustee. Some take all tax refunds, some take anything over a certain level, and others don't care about refunds. Your lawyer will know how your trustee deals with tax refunds during your active Ch 13 plan.

It's very important to ask this question *NOW* so that if your trustee is one that takes all or some of your refund, you can make adjustments to avoid big refunds during your 13 *BEFORE* you file. Some Ch 13 trustees will not allow you to make withholdings changes after filing. Again, your lawyer will know whether the Ch 13 trustee in your local court will allow withholding changes after filing or not.

I really don't understand chap 13 I was reading some threads on here and do you have come up with a budget and and give that to your trustee?

No. You figure out *reasonable* expenses for each of your family members given your local community, what your expenses actually have been for the prior six months to filing, your income from all sources for the six full calendar months prior to your filing date, and your secured asset costs and give all of those figures to your lawyer. It's your lawyer's job to create a solid Ch 13 plan that's liveable for five very long years and file it with the local bankruptcy court and trustee.

Here are links to two reliable websites that do a very good job of explaining how Ch 13 works in plain language. Understanding how Ch 13 works and what to expect before you file is very important!

http://moranlaw.net/13workings.htm#Chapter%2013%20practice

http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter13.aspx

Do you have to ask your trustee when you make big purchases? How does this work.

After filing, by law you are required to notify your trustee if you plan to purchase something that adds to your debt. If you can pay for a big purchase in cash, you don't have to tell your trustee about it.

Reading the websites I provided above will help you understand the ins and outs of Ch 13 a lot better. After you've reviewed the websites, if you still have questions post them here and we'll help you sort things out as best we can. Good luck!

[Gadmus126]

Thank you so much lrprn for clearing that up for me I feel better now