How bad is the budget you have to live on in 13?

[Moneypenny]

As I remember ch13, you get a strict budget allowance for your family, and if you make any extra money it goes straight into creditors. What about gifts from family, can you keep that?

So, how bad is it living on such a regimen?

This really scares me. I live in a very expensive environment, plus the schools are gutted and useless-- I spend a lot on educational curriculum materials (not cheap at all!) and extracurricular activities for my kids. I can't just let them develop for 3-5 in these daycare/detention centers we have.

Let me know your feelings or experiences, please

thanks,

Mr. Moneypenny

ch7 2010 discharge. Underwater 95K. No other debts.

[justbroke]

Yes, you can keep gifts from family Generally speaking, your attorney will make sure you get all the "budget" (expenses) that you are allowed to have. You should actually be able to save money if you stay within your budget categories! You actually NEED to save money to deal with life's challenges and emergency situations.

Whether your "extra-curricular" educational expenses are allowed, you will need to work with your attorney. If you can't live within the budget, by doing things outside the allowances, or refuse to budget, then your Chapter 13 Plan will fail.

[momofthree]

Here is a link to the IRS standards allowed for monthly living expenses: http://www.justice.gov/ust/eo/bapcpa..._standards.htm

[Moneypenny]

Looking at the IRS standards I would have to live on 1300 living expenses per month. 15,600 per year. No way we could do that, although I realize the figure is probably a bit higher in my court district in practice (Nor CA).

Wow, that sucks.

[justbroke]

You are probably misreading since that doesn't include housing (rent/mortgage) and "utility" housing "non-rent/non-mortgage" expense. Also, there are in fact expenses that are not typically allowable. You need to take the means test and plug in your numbers.

[papie]

Our budget was pretty tight at the beginning. Right now it's pretty loose, because we have both come a long way professionally in the last few years, and our trustee hasn't modified our payments. Apparently not all trustees are so lenient, according to these boards.

I think the best thing for you to do would be to sit down and list all of your expenses and income, and sit down with a lawyer. They should be able to run some numbers and give you a rough figure.

[Moneypenny]

yes i realize that doesnt include rent and carpayments and such. Still, food is about 1000 a month.
I too will have a way of making more money, but if it just goes to the trustee, what's the point of working harder?

and... there is a means test for ch13?

my problem is we are living just fine now without any credit cards or debt, except my house is way underwater and my 2nd HELOC is due in full in a couple years-- and we definitely can't pay it.

[justbroke]

A Chapter 13 is not about living in luxury. Trust me... an over-the-median income filer in a Chapter 13 will DEFINITELY have a lifestyle change. You will not be able to go out all the time, and you will not be able to stock your freezer with dozens of 16oz ribeye steaks. A Chapter 13 is designed so that your creditors don't suffer at your expense and lifestyle choice. It's as simple as that.

However, a good attorney can make sure you have the right items. if you are a family of four, you should be able to eat for $700/month unless you're shopping at Whole Paycheck -- err, Whole Foods. If you ARE shopping at Whole Foods, you need to stop... unless you have a documented ailment which you can prove to the Trustee.

I know it's tough since I was earning significantly into 6 figures when I entered Chapter 13. It was a major change in lifestyle.

[Moneypenny]

Wow, 600 in food for a family of four!!! Are you sure? No wonder so many ch13's fail!

I think only the most poorest people around can do that in CA, and middle class people definitely do not. We have never dined out all the time or even sometimes, hardly ever. Who could afford that. We have stopped eating a lot of healthy foods since before the ch7, but there are a few items in the health food aisle of the regular supermarket we still buy. We spend about $1000 a month. I think the IRS says like 1300 for food, apparel, and cleaning supplies, etc. We don't spend 300 on that stuff. My wife and I haven't had new clothes in years.

Unfortunately as it stands now I am a couple thousand over the median, with modest salary increase and I guess falling wages in CA since the 2010 ch7, when I was below. Five years on $600 a month in food!! Wow.

[justbroke]

You have to actually read the US Trustee's BAPCPA allowances and the breakdown at http://www.justice.gov/ust/eo/bapcpa..._standards.htm.

$1,450/month For a family of four (4)...

• Food $765
• Housekeeping supplies $74
• Apparel & services $244
• Personal care products & services $67
• Miscellaneous $300

As you can see, Food is $765/month (up from $700 about 4 years ago when the total amount was $1,300/month for a family of four (4) for Food, Clothing and Other Items). I was able to feed my family very well for about $960/month by using money from other categories (like apparel). Yes, you can mix and match.

So, there is one thing to talk about the standards and another how you manage to "manage" your actual budget.

As I said before, a Chapter 13 is not designed to keep up a middle class lifestyle... although you can keep your home and toys. You end up using the monthly allowance for Food, Clothing and Other Items as you would any other time in your home. You take things from one budget area to pay for another.

If you can't or refuse to budget... a Chapter 13 will never work and will end in dismissal.

[4theboys]

If you go in with a negative attitude, it will never work out. If you are truly dedicated to making it work and budgeting, it won't be bad at all. Granted, I'm not in CA, but $1,000 a month for food sounds like an awful lot. We get paid weekly so I set a weekly budget for groceries and don't go over that. I even have my own spreadsheet where I List my grocery items, and the price of that item, so I can make sure I won't go over. If you are committed to it, you will be just fine. I thought it was going to be awful, but almost a year into it and it has flown by.

[jcsawyer]

Wow feeding a family for $1k a month? boy would we be living high on the hog!!!! We would have the best cuts of meat every meal! I feed my family of 4 for $400 per month and we haven't filed yet! We shop sales, price match, go to a farmers market and coupon. Its not hard to adjust your lifestyle to cut down where you need to. I just cut our cell service down by $100 a month just by bundling everyone on the same plan thanks to verizons new share plan plus cut out the home phone so that was another $45 I dont have to pay.

[hmsmith]

I personally didn't do a Ch 13, but even with a 7 we had to make financial cuts. We too cut down our cell phone bill by around $50, and we cut our cable out completely for several months. We have a family of four and we spend about $800 a month on groceries.....I'd say we are not the norm spending that much, but with the costs in food continuing to rise, I find that typically that is what we spend. If you think if you can't spend under $1000 a month on groceries then you might need to take a good, long, HARD look at what it is your buying. (or maybe you have 4 or 5 kids---I'm not sure if you mentioned that). I would suggest couponing, as my family has started this and I love it! I'm not a coupon crazy person like on t.v but it feels good to save a minimum of $10-$20 at the store for things that I would already buy anyways.

I have to say that even with our $800 grocery budget for a family of 4, we DO buy a higher quality of meat. No, we are not dining on filet mignon nightly, or weekly, or actually ever..........but I do buy fresh chicken, lean burgers and pork----my meat is always fresh and not frozen and this is our choice. I know we could even cut back more spending at the store if we went with cheaper meat or frozen---so what I'm saying is a family of 4 (in my honest opinion), can do very very well on groceries for $800 a month.

I agree with the above poster ( 4theboys), in that if you already have a negative attitude or believe that you're being set up to fail, then that will make things much harder. Why not think positive, make some spending changes as we ALL have to do when filing BK 7 or 13 and realize that you are not alone.

[Pjmax]

OP, I agree with the others, that if you are going to succeed, you will have to learn to be positive about the changes that will occur. Remember, this is for the long-term, your future as well as that of your children. Yes, it will be an adjustment, but why not take some baby steps now, before the budget limitations are imposed.

I'm curious, how old are your children? Old enough to get them involved in coupon-clipping from the Sunday paper, maybe? On your next trip shopping, try not to buy anything that is not on sale, see how it goes. If you keep track of what you are spending as you go through the store, you might be surprised how your buying decisions might change. Just throwin' out some ideas here, there are lots of them on this site and others. You can do this. Yes, it does take more time to shop carefully, think about what you are spending and use coupons whenever possible, but you can adjust to a lower food budget.

Yes, there will probably be other budget cuts to get used to also, but why not start somewhere and get creative and involve the kids. They might not feel deprived if they must eat one brand of cereal over another if they are a part of things.

[katztoo]

We just made our last payment of 874- in our chapter 13. It's been a loooong tough 5 years! After bills and food we had about $300.00 left. Have not been able to save anything because things came up...tires, car repairs, home repairs, Dr. bills, eye glasses, medicine etc. that used up the $300. Have not taken vacations either, can't wait to start living normal again!
By gifts if you mean small amounts on birthdays etc. the trustee doesn't check for that. Anything big like inheritances have to be reported.