I thought chapter 7 ......looking more like 13

[FullOfIt]

We went through our finances and make quite a bit more than I thought (what an eye opener to how truly irresponsible we have been).....It's looking like a pretty sure deal for the 13. I have an appointment with an attorney on Thursday and another one on Monday. But I have some questions.

1. Can we choose a 100% payback or will the court force less if they think we can't swing it? 2. If in 100% payback are we free to spend our DMI as we choose? Savings, electronic, home repairs etc? 3. In 100% do you have to account for every penny? I do believe we can handle a 100%. We are current on all debt and we live nicely. We just won't ever get ahead at this rate. If we do 100% plus attorney fees, trustee, court, divided x 60 we would come out paying almost 1K less a month than we do right now paying min payments. 4. If paying 100% do they look as closely at how you lived in the months prior to bankruptcy? For example, we have a trip planned next month (it was planned in January after my husband had a particularly good month- it's with another family. If we could cancel I would). Nothing horribly expensive but a trip none the less. We are paying cash and yes, again, all credit payments are being paid. 5. If paying 100% how much money can you have in your bank accounts? Does it matter? 6. Can you make too much money for Chapter 13 ? Thanks anyone that can help. I know most of my questions will be answered on Thursday but, today and tomorrow.......my wheels can't seem to stop turning!!

[LadyInTheRed]

You should only get into a 100% plan if your DMI, after taking into account all of your allowable and reasonable expenses, is high enough to pay 100%. Let your attorney figure that out. There is no reason you should start out with the goal of paying 100% of your debt.

2. If in 100% payback are we free to spend our DMI as we choose? Savings, electronic, home repairs etc?

Whether you are in a 100% plan or a 0% plan, you will be able to spend your money however you want. Once your plan is confirmed, nobody is going to check to make sure you are sticking to the budget in your petition.

4. If paying 100% do they look as closely at how you lived in the months prior to bankruptcy?

Regardless of the % payback, nobody is going to look closely at how you have lived. The trustee might look at bank statements to make sure you aren't hiding any income and that you didn't make any large transfers to hide cash. If any of your expenses seem out of line, you may have to prove those expenses. But, nobody is going to compare every past expenses with every expense listed on your petition.

As for the vacation, airline tickets and any deposit on a vacation rental should probably be listed as an asset. If you can't exempt them, then the Chapter 7 liquidation test applies. See explanation below. If you charged any part of the vacation to credit cards, it won't be an issue as long as 90 days pass between the charges and your bk filing.

5. If paying 100% how much money can you have in your bank accounts? Does it matter?

It won't matter if you are paying 100%. It also probably won't matter if you pay less than 100%. If you have cash or any other assets that you cant exempt, your plan has to pay to unsecured creditors at least what they would receive if those assets were liquidated in a Chap 7 (this is the Chapter 7 liquidation test). So, if you have $5,000 cash and unsecured creditors get at least $5,000 over the life of your plan, there's no problem.

You can't make too much money to file a Chap 13.

You have some fears about Chap 13 that you will find are baseless. I gave my attorney 6 months of paystubs and my most recent account statements for all debt and asset accounts. The only documents that went to the trustee were the paystubs and a screen shot of my online checking account register showing the balance on the date I filed. I am paying less than 1% to unsecured creditors. My plan was easily confirmed. My BK does not really influence my day-to-day life except that I budget in a way that allows me to save a little money and send a check to the trustee every month. Nobody knows or cares whether I buy a bag of rice, an expensive steak or a huge TV or if I hire somebody to paint my house.

[FullOfIt]

Thanks again Lady for your response. I guess I am just setting myself up for worst case possible. I am a worrier by nature and this has just got my mind going crazy!!!

[Pjmax]

Thanks again Lady for your response. I guess I am just setting myself up for worst case possible. I am a worrier by nature and this has just got my mind going crazy!!!

You are not alone, most of us here started out as OCD worriers! It will get easier and make a little more sense as you go along. Just take your time selecting the right attorney, make sure he/she specializes in BK.

[FullOfIt]

Thanks Pjmax. The attorney I am seeing on Thursday does nothing but bankruptcy.....I hope that turns out to be a really good thing. He also only has good reviews (anywhere I can find them). Haven't read anything negative......yet.

[angel7821]

Just wanted to pop in and wish you the best of luck with your upcoming plan.