Advice badly needed/in a panic!!!

[sheilaE]

I haven't posted here for awhile. We've been waiting our pending Chapter 13 out until hubby retired. That has now happened, so we are ready to file. The panic part came today after meeting with our atty to get our plan payment. It came as a shock to learn that we are needing to pay back $1662.00. I'm going to post the budget-this is what we are being allowed. We are a family of 5. Our oldest is 21 and a full time student. We live in California. We are keeping 3 older vehicles...we have 4 drivers.

RETIREMENT INCOME:$6000.00

BUDGET:
BK Payback: $1662.00
Mortgage: $2095.00
Electricity: $525.00
Water/garbage: $100.00
Groceries: $700.00 (was cut from $900.00)
Meds/Dr copays: $60.00
Auto insurance: $208.00
Auto pymt: $100.00
Cable/internet: $150.00 (cut from 250.00, told that's not allowed)
Gas: $400.00 (3 cars)
TOTAL: $6000.00

Not being allowed in our budget:
5 cell phones $250.00
School lunches for 1 child $40.00
Life Insurance: $165.00 (was told to cancel due to if husband died, I would get his retirement. This sounds bad to me. We are in our 50's.
Clothing for 5:$100.00
Bday/Christmas gifts for 3 kids: $20.00 per month
Auto maintenance:
House Maintenance:
Auto registration x3 autos.

My question is...is this really a livable plan? I don't feel like we can do it. There is nothing for emergencies at all. Attorney says we have $1662.00 to pay into the plan and that husbands retirement of $6000.00 a quite a lot of money. He also says the trustee will not allow for any extra's.
He told that we do not qualify for a 7. Suggested we give up the house and rent for $1500.00, but the difference will be put into the plan. So why do it? We are in our 50..not only would we loose our home, but it wouldn't even put more money in our pockets. He also told us maybe one of us should look into getting a part time job...but...the funds we made would be paid into the plan..WTH? why do it then???
I'm sick to my stomach...looking for support...or should we buckle up and settle with this strict plan for the next 5 years?

[Floridagail]

You have my support, and i would not take that ride. I assume your retirement income is protected, so you maybe judgement proof, I would not file. You have a large family and lots of mouths to feed. If you have to file for some other reason. I would seek advice from a couple more attorneys. Have you done the online means test yourself?
We were told my husband payback in 2010 if he filed would be high, we did not file, the attorney told us to buy a couple news cars, lower our deductables on insurance , and file later.

[katztoo]

I agree with floridagail consult with another attorney. Ours fought for us and we were allowed cell phones (200), life ins. (167), clothes (120), food (600 for a family of 4), school expenses (120) auto & house maintenance. Make sure the attorney specializes in BK. They know how to get the best payback for you.

[Pjmax]

I'm not a 13 filer, but the advice about giving up your home and a part-time job, for a few hundred extra to go into your plan, would not sit right with me. I would consult with a few more attorneys.

[kjrmom911]

Definitely consult with another attorney, but what are you paying back in your bankruptcy? Is it secured debt, or taxes? If so and that is the amount you owe you may be in trouble. If that is the not the case, and it is unsecured debt, then look for another attorney because the trustee is of course going to allow you money for clothes, school expenses and life insurance (up to a certain amount). 6,000 is not reallly all that much money in california.

[sheilaE]

Thank you for the responses. The atty says we have too much DMI. He has us paying back 37% of unsecured. We stopped paying our bills 2 years ago and waited this out until husband retired. We now have $222,000.00 of debt, we are stripping our 2nd which is $60,000.00. He has us paying back 37% of the debt. Total payback is $83, 096.00.

His argument is that the kids are older (21,18,14) and that they will be moving out sometime during the plan and the trustee will not allow their full expenses. The youngest has autism and will never move out. The other 2 are full time college students. He also said because husband is retired, we can't claim our gas ($400) because since he's retired, he's not using gas to get to work so we shouldn't have that expense. I take 2 kids to school and back every day....our youngest son's school is over 10 miles from home.

We understand that a chapter 13 is NOT suppose to be a walk in the park and that when all is said and done, we will be debt free, but I just feel like we need a plan we can survive on. I don't see this plan as being livable. We could do it, but don't think there would be enough for the 3 car registrations, meds, dr office co-pays, clothing, school lunches, school supplies....

[kjrmom911]

Get another opinion. I don't even see taxes in your budget and trust me the trustee does not care about the ages of your kids (up to a point), if they are your dependants then you are supporting them and you can claim the allowed exemptions (700 dollars is not enough for a family of 5 for food). There is nothing in the bankruptcy code that says you have to pay a certain percentage back to your creditors. Something is not right with your plan.

[keepsmiling]

Your attorney sucks and your plan is ridiculous.
Doesn't sound like he's willing to go to bat for you. Find another.

[keepsmiling]

In fact, I'd be willing to bet you are under the median.
Is this a 3-yr plan?

[keepsmiling]

In NJ there would be very few places for a family of 5 to live for 1500$, plus you lose all of your homeowner deductions. Unless you are somewhere in the boonies of CA, I can't believe it would be much different there.
This is all so outlandish that it seems there is something you aren't telling us. Are you trying to save something? Is this partially due to the stripping of the second?

[sheilaE]

I don't think I missed anything. Yes, we are stripping a 2nd for $60,000.00, but I don't think that would be why the payment is high. He kept saying the trustee will fight you on all DMI and when we take away everything, the DMI is $1662.00 and when I say everything--I mean everything...clothing, life insurance, home maintenance, cell phones, cable/internet...he says the only thing the trustee will only allow for very basic needs.

I seriously left his office in tears. It was a long drive home. We're still in shock. Made an appt to see another atty, but I'm worried he'll be like this one. After 2 years of waiting, we wanted to file by year end. Already have 2 summons that came a few weeks ago...I feel like the clock is ticking.

[keepsmiling]

I just wonder if it's customary to pay something towards a stripped mortgage in your district. I definitely am no expert in this. But... yeesh. Not even sure a tt would go for this since they need plans to succeed.
Is this 3 or 5 years?
Keep talking to people and keep us posted. Hopefully it will start to look better soon.

[zeezee]

Dang...that is a horrible plan. I'm in VA and back in 09 when I filed I was allowed $350 a month for food, $250 for home maint, $100 for auto maint, I was able to keep my cell, cable, internet and home phone which total about $200 a month! And it's just me! I can't imagine that you would get that little especially being in CA. Although I didn't try to claim money for clothing, gifts, etc., the savings come from food and other maint costs. Yeah, you need another attorney quick!

[zeezee]

And also, is the $6k gross retirement pay or net after taxes? This is baffling to me...I would go buy a new car. If you have three old one's they may not last through 3 or 5 years of a bk.

[sheilaE]

I agree! Our atty told us awhile back that he likes to go in to court with everything set and get confirmed. Maybe that should have been a sign that he wasn't going to fight for us? Also, the plan payment is for 5 yrs.