Considering a CH 13. Filed CH 7 May 2011 w/ discharge in Sept 2011.

[brokeincmch]

Hello-

I am considering a CH 13 and I have a few questions. As stated in the title, I filed a CH 7 in May 2011 which was discharged in September 2011.

Since then I have purchased a new home, purchased and leased a car, and I have now approx. $40,000 in unsecured debt.

My monthly income is below the median for a household of my size in my state.

I computed monthly disposable income using gross income and net income along with IRS allowed deductions and the deductions on the US TTEE website. Wasn't sure which to use for income (gross or net) and expenses (IRS or US TTEE). My actual expenses are about $150 higher than the expenses allowed by the US TTEE.

I also computed everything with a 36 month plan and with a 60 month plan. Needless to say, the payback % varies dramatically depending on which combinations are used. The range is a low of 32% (actually 0% but I figure that wouldn't be allowed) to 100%. Given my BK history, I am not sure what if anything would be approved. I only know that one may file a 13 four years after one files a 7. (Or four years after a discharge in 7 - not sure which.) I tried pasting eveything below at the end of the post for those interested in seeing my "analysis."

Things to note:
- Settled on my current home in January 2014. It was a forclosed home owned by Fannie Mae. Purchased with a VA mortgage - nothing down. ($1105 / mo)
- Did a 100% cash-out re-fi in Dec 2014 in order to renovate the kitchen. It was completely unserviceable. (Brought mortgage to $1255 / mo)
- Did a streamline re-fi in Feb 2014 at the lender's behest (Brought mortgage down to $1175 / mo)
- Renovated kitchen last month but had to borrow additional unsecured funds to do it. (~$2,000)
- Opened a number of very small store credit accts between Dec and Feb. (Total debt with these accts is ~$3,000)
- Currently banking at a Credit Union that owns my car note. Aware of possibly of having to switch.
- As of today (4/7/2015), I am current on all of my bills / accounts.
- Rated 70% disabled by the VA
- Son is on the autism spectrum and has a ton of treatment for it.

Income consists of the following:
$58,900 salary (1.75% increase in Oct 2015)
$19,000 VA Disability
~$3,600 expense reimbursement from employer (my job involves heavy travel in and around the area where I live. I am reimbursed $0.31 / mile travelled.)

My payroll deductions to get to net income are as follows:

Federal Withholding
State Withholding
FICA - Social Security
FICA - Medicare
State Disability
State Unemployment
Health Insurance
Dental Insurance
Life Insurance (above $50,000 in coverage)
Pension (MANDATORY PARTICIPATION AND CONTRIBUTION)
Union Dues (MANDATORY)

This site was tremendously helpful when I filed my CH 7. Just looking for additional advice if possible. Thank you in advance.

Here is my "analysis;" hopefully it is readable.


MEDIAN FAMILY INCOME 107,452
HOUSEHOLD SIZE: 4
STATE: NJ BELOW MEDIAN

MY INCOME 81,532


MONTHLY INCOME (GROSS) 6,794
MONTHLY INCOME (NET) 5,266

EXP IRS US TTEE ACTUAL
HOUSEHOLD 1,513 1,038 1,083
OOP HEALTH 240 240 240
HOUSE & UTIL 2,539 1,837 1,931
CAR OWNERSHIP 1,034 1,034 1,055
CAR OPERATING 598 598 600
TOTAL 5,924 4,747 4,909

GROSS DISP INCOME 870 2,047 1,885
NET DISP INCOME (658) 519 357

36 MOS GROSS 31,332 73,704 67,860
36 MOS NET - 18,684 12,840
APPROX % - GROSS 78% 184% 170%
APPROX % - NET 0% 47% 32%

60 MOS GROSS 52,220 122,840 113,100
60 MOS NET - 31,140 21,400
APPROX % - GROSS 131% 307% 283%
APPROX % - NET 0% 78% 54%

[klandsb]

I am confused. If you are current on all your bills what is it that you want from the bankruptcy filing ???? You have 40,000 in unsecured debt in 4yrs since your Chapter 7. I am not judging you but I really hope I have learned my lesson and gained financial wisdom by going thru this process. I promise myself all the time that I will never let myself get into the financial mess I was in that forced me into a Chapter 13.. Yes, sometimes things beyond our control happen. Loss of job, divorce, health problems ect . but living above your means & using credit cards for everyday things is a recipe for financial troubles. just my thoughts

[LadyInTheRed]

I believe you will be able to get a Chap 13 discharge if you file 4 years after the filing date of your Chap 7.

You shouldn't focus on the percentage of debt that will be paid. Assuming you have no arrears on secured debt and no non-exempt assets, your plan payment will be equal to your disposible income based on your actual income and your actual reasonable living expenses. If your actual expenses are above the standards listed on the US Trustee website, you should be prepared to justify them. If your income is below median, your plan will be for 36 months. The only reason you would extend it beyond 36 months is if you need more than 36 months to pay for non-exempt assets, arrears on secured debt or attorneys fees included in the plan. Plans that pay 0% to unsecured creditors are approved all the time. But, it looks like you do have enough disposible income to pay some of the unsesecured debt.

Have you considered tightening your belt and trying to pay down the debt? Do you have a car lease AND a car loan? Can you do without one car or downgrade to less expensive cars? Whether you file Chap 13 or not, it's time to start living within your means.

[brokeincmch]

Acknowledge that it's time to live within my means. LITR - I do have a lease and a loan (for cars), but I will be able to get rid of the loan and drive a beater. I was doing well until about one year ago. Looking at a new job with about a 25% salary cut and I am just weighing my options in order to deal with it.

Thank you for the advice.

[LadyInTheRed]

Bankruptcy should be a last resort when there are no other viable options. Perhaps I misunderstand the situation, but it sounds like you are considering voluntarily changing jobs. Considering BK as a way to allow you to voluntarily change jobs and take a salary cut is foolish unless things are so bad at your current job that your health is seriously at risk and a pay cut is the only way to get out of a horrible situation. Keep your current job, create a budget that includes paying down that debt and stick too it. Once you get your debt paid down and are in the habit of living within your means, you will have the luxury of taking a pay cut to move to a preferred job.

Keep a second BK as an option for later in case you have an involuntary decrease in income and no other options.

[dmc-2008]

It rough! I would def start downsizing and budgeting a bit. In BK there is very little wiggle room. If you needed to borrow 10k a year to make it, then it would be a really good idea to see how you can do on way less for a couple of months. If that works then maybe you can work it out without filing? I wish you all the luck! Tough decision!