Where can you safely save money in a chapter 13 plan

[magic13]

I notice quite a few people on here say they are saving money in their Chapter 13. If you are fortunate to be able to save $500 to $1000 per month. Can you trust that creditors/ trustee are not interested in seeing your bank account. Also in the bank wouldn't it draw interest thus you have to show it on your tax returns. What are some alternative places to save? Thanks

[frogger]

Mr. Pickle Jar?

[Sammie]

I have a shoe box. Seriously, I do. sammie

[SMinGA2]

There is nothing wrong with saving in a 13, and the interest generated is not going to be significant enough to make a difference on taxes IMO.

Most savings in a 13 come from careful budgeting. Say you plan $100/mo for clothing, $100/mo for vehicle maintenance, and $600/mo for groceries. In August you might not have any clothing or maintenance needs, and perhaps you shop sales and such and only spend $550 on groceries. You'd set aside the $200 (for clothing, maintenance) for when you do need to spend it. And $50 for 'what if' money, should something unexpected come up.

Save it where you feel is appropriate. Assuming you reported accurate income in your paperwork/plan preparation, and you report changes to income as required (or not) then you'll be fine.

[LadyInTheRed]

Interest?????! LOL. I think I got a penny in interest last month.

SMinGA2 is right. No need to hide your savings at all during a Chap 13. Save what you can wherever you want. But I suggest not hiding it under any lily pad.

[frogger]

I But I suggest not hiding it under any lily pad.

Hey! Watch out now.............

[kornellred]

If you are able to save 500 to 1000 dollars a month in a Chapter 13 you better hope the trustee stays asleep.

[jange]

I am able to save money every month, depending on what surprises come up. I had $1500 saved and then a big car expense happened and now I am starting again. I put mine in the bank and have never had an issue. I doubt anyone could save $1000 a month and be in a ch 13.

[justbroke]

If you are able to save 500 to 1000 dollars a month in a Chapter 13 you better hope the trustee stays asleep.

This is not the case for any Trustee that I have read. If you are able to take, for example, the $1,450/month for a family of four for food, clothing, and necessities, and get it to $900/month, that $550/month is yours . Nothing the Trustee can do about it.

The supermajority of Chapter 13 Trustees will tell you that they seldom bother any debtor paying on time and staying in plan. I've read one Trustee's report that indicated that they requested changes to the payment (due to increased DMI) in only 5% of cases and that was based on income tax returns (due to large increase in salary... I suppose > 10% increase).

I too doubt that anyone can save $1000/month in a Chapter 13... unless they did a sneaky thing by paying mortgage outside plan, and then stopped paying it! I was able to save about $400/month while in my Chapter 13. Some of this just came from the fact that I had 2 cars in plan, received the $489/month allowance, yet the payments were only $208 and $250/month each! That alone saved my bacon when I needed tires 2 weeks after filing.

[magic13]

This is not the case for any Trustee that I have read. If you are able to take, for example, the $1,450/month for a family of four for food, clothing, and necessities, and get it to $900/month, that $550/month is yours . Nothing the Trustee can do about it.

The supermajority of Chapter 13 Trustees will tell you that they seldom bother any debtor paying on time and staying in plan. I've read one Trustee's report that indicated that they requested changes to the payment (due to increased DMI) in only 5% of cases and that was based on income tax returns (due to large increase in salary... I suppose > 10% increase).

I too doubt that anyone can save $1000/month in a Chapter 13... unless they did a sneaky thing by paying mortgage outside plan, and then stopped paying it! I was able to save about $400/month while in my Chapter 13. Some of this just came from the fact that I had 2 cars in plan, received the $489/month allowance, yet the payments were only $208 and $250/month each! That alone saved my bacon when I needed tires 2 weeks after filing.

It is funny looking at the responses regarding saving money when a certain person on here reassured me about filing a chapter 13 by stating they save $500.00 per month and since that time they have mentioned they have received raises that the trustee doesn't care about. But you guys are the ones who taught me, along with my lawyer that every case is different. Believe me $500 is easy, pushing it will give me a thousand, I will spell out my case at a later date, I am still afraid about who is lurking around here.

[LadyInTheRed]

It is funny looking at the responses regarding saving money when a certain person on here reassured me about filing a chapter 13 by stating they save $500.00 per month and since that time they have mentioned they have received raises that the trustee doesn't care about. But you guys are the ones who taught me, along with my lawyer that every case is different. Believe me $500 is easy, pushing it will give me a thousand, I will spell out my case at a later date, I am still afraid about who is lurking around here.

Remember that the $500 a month may include occassional expenses that were part of the original budget (car maintenance, repairs and registration, home maintenance and repair, out of pocket medical expenses, insurance if not paid monthly, etc). You have to save each month in order to pay those expenses when they come up. After I filed BK, I began setting $200 aside for those kinds of expenses. When I get a raise that my attorney says does not have to be reported to the trustee, it increases my ability to save.

Yes, every case is different and the practices of each trustee are different. Some trustee's review tax returns every year to look for raises. Some plans specify that you must report raises of a certain amount to the trustee. Some trustees only care that you make your payment every month. If you received a raise, let your attorney know so he can advise you whether the raise needs to be reported to the trustee. If you haven't had an increase in income and are able to save by spending less than budgeted amounts, it's not a problem.

[LadyInTheRed]

If you are able to save 500 to 1000 dollars a month in a Chapter 13 you better hope the trustee stays asleep.

My understanding is that a plan can't be retroactively amended. But, even if that isn't true and a trustee does awaken and find out you haven't been paying all of your disposible income into the plan, then in a worse case scenario, you have it in savings and can hand it over to the trustee if necessary. As long as you only spend money on necessities, which you should be doing anyway in a Chap 13, building a savings shouldn't cause any problem that can't be resolved by handing over cash or showing that you have an increase in expenses to offset any increase in income.

I've read of many people on BKforum being able to save during Chap 13, but I have never heard of a trustee coming after the savings.

[pamkev]

I have a fire safe box

[pamkev]

Mr. Pickle Jar?

Hey I didn't know frogs liked pickles

[magic13]

My understanding is that a plan can't be retroactively amended. But, even if that isn't true and a trustee does awaken and find out you haven't been paying all of your disposible income into the plan, then in a worse case scenario, you have it in savings and can hand it over to the trustee if necessary. As long as you only spend money on necessities, which you should be doing anyway in a Chap 13, building a savings shouldn't cause any problem that can't be resolved by handing over cash or showing that you have an increase in expenses to offset any increase in income.

I've read of many people on BKforum being able to save during Chap 13, but I have never heard of a trustee coming after the savings.

It is funny Kornelred said what he said because he on this forum talking about how easy his Chapter 13 plan is, matter of fact on August 12,2012 he said it was laughingly easy.Maybe he can explain what he did with his "not disposable" cash