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

[witeout]

It's really hard to explain 13 life to someone not living it. Plus things can go very well to very bad in a blinking of an eye. The most important things to do is plan BEFORE you file. We filed the day we took a huge pay cut. That was a big mistake because our 13 was then based on 6 months of good pre-pay cut pay. Also our cars were 16 years old and 8 years old. Another big mistake. I also wished I had addressed my health issues that I had ignored for years for $$$ reasons. All the things you were too poor to do before 13 will still be there after 13.

Because of the above, new health issues, cars and house starting falling apart, it's been a real struggle. I am super frugal and was before the pay cut. Now we are getting another huge pay cut. This is the realities of 13 life. I wish this stuff was told to people before they file.

We still would have filed but we would have gone about it WAY differently. Transportation and Health have to be looked at and timing. Timing is everything on 13.

When it's tough I just remind myself of the main reason we filed. It was a scam artists after us. They kept mailing us threatening letters and after we filed, we never heard from them again. Also our car company was adding late fees when we were on time! They can't get away with that now. In a backwards way, our 13 made others behave. I like that. We don't regret filing and feel it's a blessing and will get us ahead in life. However, again we would have totally done it differently had we known the ins and outs of it.

[dolphindan1]

I questioned the same things before we filed...Can I go out to eat once in a while? Can my sons continue sports, like travel baseball? Will I have any extra money for anything after I file...Well the relief I felt saving my home, getting creditors off my back, worrying about who is calling my family and job to collect, far out weighed the worries I had about filing...When I filed I felt a huge stress relief....My payments are very affordable only 200 more than my normal car payment...So I think our quality of life will be the same and the future will be better...We have not made our first payment yet as the process has just started BUT I am sleeping better and life is so much easier already...I know our annual trips to Disney are off the table but hey plenty of beaches near us we can enjoy for a few years....of 4 1/2 years to go...

[Sammie]

We are filing this coming Wed. Aug. 1st. I realize that with our payment which starts Sept. 1st for 36 mos., mortgage, utilities, etc. we will be left with approximately $900- $1,000 a mo. for everything else. Our biggest expense, aside from food, we were averaging $600 mo. for the 2 of us, has been our pet. She has had very high Vet bills, due to a Tumor which was removed a couple of mos. ago. Living within our means is a top priority now & a necessity for the future. Getting our food bill down is going to be my first goal, & I am researching everything I can. We eat very well, I cook every night & nothing is processed. I called our Utility Co. yesterday and put us on a monthly budget, this way we know exactly what the bill will be. I put my Nook away and went to the Library this week.

The only thing I am nervous about is the Trustee meeting, I just don't like confrontation & the unknown.

We lived by spending money and did this to ourselves. Now is the time to say, "do we need this or do we want this"? A positive approach is the only way to win. Getting used to being without a cc will not be as difficult as I first thought because my dh and I realize the amt. of interest we have paid out over the years was quite substantial. Now is the time to use cash & try to put as much away as possible. Christmas is a little over 4 1/2 mos. & this year the g'kids will not be getting the electronics and amt. of money we have always given them in the past, we have to look at our future and first.

As others have said, budgeting is crucial now & getting the whole family involved is the key. You can do it with the right attitudesammie

[Pjmax]

Sammie, just wanted to tell you...we joined here about the same time and I've been following all your posts. Your attitude has been such an inspiration for me. I hope you keep posting.

I'm sorry about your pet.

[ValleYum]

We are filing this coming Wed. Aug. 1st. I realize that with our payment which starts Sept. 1st for 36 mos., mortgage, utilities, etc. we will be left with approximately $900- $1,000 a mo. for everything else. Our biggest expense, aside from food, we were averaging $600 mo. for the 2 of us, has been our pet. She has had very high Vet bills, due to a Tumor which was removed a couple of mos. ago. Living within our means is a top priority now & a necessity for the future. Getting our food bill down is going to be my first goal, & I am researching everything I can. We eat very well, I cook every night & nothing is processed. I called our Utility Co. yesterday and put us on a monthly budget, this way we know exactly what the bill will be. I put my Nook away and went to the Library this week.

The only thing I am nervous about is the Trustee meeting, I just don't like confrontation & the unknown.

We lived by spending money and did this to ourselves. Now is the time to say, "do we need this or do we want this"? A positive approach is the only way to win. Getting used to being without a cc will not be as difficult as I first thought because my dh and I realize the amt. of interest we have paid out over the years was quite substantial. Now is the time to use cash & try to put as much away as possible. Christmas is a little over 4 1/2 mos. & this year the g'kids will not be getting the electronics and amt. of money we have always given them in the past, we have to look at our future and first.

As others have said, budgeting is crucial now & getting the whole family involved is the key. You can do it with the right attitudesammie

Sammie?

If you want to PM me, I will happily add you to my Nook list and you can use any of my LendMe books you like. Reading is my huge guilty pleasure and I am glad to share it. If you aren't comfy with that now, I understand that too and my invite remains open.

Hubby and I started buying savings bonds for gifts for our grands. We like the fact that it is a gift that grows (albeit slowly) with them.

341 was scary - but over fast!! Just remember the Trustee's tape can't hear you nod. LOL Hubby kept elbowing me so I would speak!!

[LadyInTheRed]

MoneyPenny, why are you considering a 13? Your only debt is your underwater mortgage? Is there a 2nd you want to strip? Did you reaffirm your mortgage in your Chap 7? Are you trying to keep a house you can't afford? Have you tried mortgage modification?

In what division of Northern CA would you file?

[LadyInTheRed]

MoneyPenny, I have now read your other posts and see that you are considering a Chap 13 to strip the 2nd. It looks like you are already thinking of the relevant issues.

[Moneypenny]

I'm in Sacramento.
I'm hearing that in the Southern District judges are allowing lien strips of underwater 2nds with no distribution or discharge or 3-5 year wait, if the debt is discharged in a 7 previously the 13 is not filed in bad faith. But can't get a hold on the Eastern District yet.

Re: Sammie-- wow, sounds great. If I could have 600 in food for 2, plus another 600 for 2 growing kids, that would be enough. But most people here are saying I have to really tighten my belt and live on far less, unless we "eat" all extra curricular activities, entertainment, and emergencies and contingencies.

I am still shocked at the shock some people, including lawyers, judges, and trustees, have that ch 13's fail so often. Ah... did ya ever think it could be the plans are too tight and too much is given back to the creditors?

[LadyInTheRed]

I found an article that mentions a recent ruling in favor of a "Chapter 20" in the Eastern District. It's near the end of the article: http://cclawyer.cccba.org/2012/06/li...r-20%E2%80%9D/

Since you have no equity in your home, you would have a wildcard exemption of over $23K. If you have no other assets to exempt, you could stop paying the 2nd and file BK after you save the cash that you've been paying to the 2nd. That will give you a cushion for extra curricular activities, entertainment, and emergencies and contingencies.

The statistics about Chap 13s failing usually include any Chap 13 that is not completed. Many of those are 13s that convert to 7s because of decreases in income. People who do not experience a decrease in income and cannot complete their Chap 13 either didn't belong in a 13 in the first place because they were trying to keep assets they couldn't afford or were unwilling to make necessary changes to their lifestyle.

Because your mortgages were already discharged, you have a choice of walking away and never looking back or staying and making the adjustments necessary to make a Chap 13 plan work. It's a tough decision. But, it seems fair to me that if you are going to strip the 2nd and keep the home, you need to make some sacrifices if the creditor is going to take less than originally bargained for.

A good Chap 13 attorney with experience with the local trustee should be able to get you into a plan with breathing room, especially if you are able to exempt a nice chunk of cash. If you decide to go that route, interview several attorneys and make sure you get one that will fight for the best plan you can get.

[momofthree]

I am in the Eastern District of CA. My attorney was adamant that the trustee would fight any filing that attempted to pay less than $200/mo. With a negative dmi, this was difficult, so we opted to pay our car payment through the bk and 0 to unsecureds (our total monthly pyt is $610, $511 is car payment, $99 is tt and atny fees). I don't know how many trustees there are in our district, but if you end up with mine, expect some backlash at the 341 if all you're doing is a lien strip. We were basically accused of filing a "disguised ch.7" in order to get a lien strip. Since we are paying nothing to unsecureds, the tt basically said we should be a ch.7, but are getting the benefit of the lien strip and he wasn't too happy about that. He did say that since it was our first and only bk filing and upon reviewing our case (huge pay cuts, special needs child, etc.), he felt that the totality of circumstances didn't indicate bad faith, so he confirmed our case. We were sweating bullets for a good 5 minutes while the tt and attny argued for a bit. Just an FYI, and this was 30 months ago, and I know the law can change...

[justbroke]

I think the key is what you're paying through the Trustee (through the Plan). What is a Chapter 13 if nothing is being paid through the plan (and through the Trustee)? It is nothing but a cost to the Trustee at that point. There are courts that don't like "back door" Chapter 7s and that don't look favorably to confirming plans where you pay absolutely nothing through the Trustee. That is probably why there is a minimum to pay through the Trustee, otherwise the Chapter 13 makes no sense unless you're trying to do a lien strip.

I was a 0% Chapter 13, but my arrears and vehicles (crammed down) were paid through the Trustee. Unfortunately, the reason why the unsecured creditors received nothing, was that the Trustee was earning over $700/month in fees (just before conversion).