Is Chapter 13 really a fresh start?

[Kam]

Ya, what Gen said, up your medical expenses. Surely you purchase aspirin, ibuprofen, tylenol, cold medicine, rubbing alcohol, ben gay, cough drops, neosporin, band-aids, etc. You mentioned you had a health club membership -- seems to me that you would have all kind of meds for aches and pains, muscle sprains, etc. Right?

You pay almost 1 K a month for child support. Do you ever have to purchase extra socks, hair ties, brushes, combs, toothbrushes, undies, maybe a night gown or bathrobe on occasion?

What about money for school functions like birthdays or parties? My youngest had to bring $2.00 for a pizza party AND bake cookie bars. I estimate I spend probably $5.00 a month for "stuff" for school activities.

[Lightning]

You pay 36% in income taxes without receiving any refund? I find that very hard to believe. Stop giving the government a free loan, and up your exemptions.

I can't imagine a trustee falling for your definition of "poverty". You make $75k a year and have only 1 dependent and you claim to be unable to pay your debts? You chose to borrow a boatload of money. Pay it back. Show your daughter what it means to be a responsible adult.

[MRDEBTSTER]

Look what crawled out from under a rock!

[robivi3]

Jay:

Bankruptcy is only called a "fresh start" in advertising done by Attorneys. It is in no way a fresh start. As far as a "debt consolidation plan" (Ch. 13) it isn't that either, nor is a 13 run by the Government. Here it is ina nutshell... a really tiny nutshell...

When you declare Bankruptcy you are admitting that you cannot pay your debts and are asking the Court for relief. An automatic stay goes into effect stopping the listed creditors from contacting you except through the Court.

The Court has an appointed Trustee who is NOT a Government Employee. He is usually an accountant or lawyer. He is always well to do and likely has his name on his own building as mine did. I believe that there is a US Trustees Office that he also answers to, but you will not be involved in that. The Trustee is there to determine if you have sufficient assets to repay all or any part of your debt. 95% of the cases are no asset and he agrees to take thise cases pro-bono. For the 5% that are asset cases he gets fees on a sliding scale up to the very large cases which can net millions of dollars.

Because you have admitted guilt by filing BK the Court leans heavily toward the Trustee and the creditors in all considerations. The Trustees first concern is for the creditors but he has to use cost of living guidelines set state by state, county by county, city by city.

I hope that this has sorted out any beginning question as to how the system works. there are many more details, but that is basically it. It is probably the best BK system in the world as it is prone to protect creditors and the people alike even though we don't think so while we are in the midst of it. I know alot about the history of BK in ancient times and have a smattering of knowledge of the system in some Countries. BELIEVE ME, WE HAVE IT REAL EASY!!!

[StaciMM]

My thoughts on the budget you listed, JayGZ-

Utilities does seem low. Call your utilty company and ask them what the average is for the past 12 months. I'm guessing it is low at this time of the year but goes up in summer?

You need to consider personal care items & household needs. For personal care, things like soap, shampoo, toothpaste, etc. may only be $2 here, $3 there-but it adds up when you think long term. For household, cleaning supplies, garbage bags, toilet paper/paper towels.

Getting renters insurance is a good idea if you don't have it. I'd suggest check with your auto insurance, see if they offer it. It isn't a huge expense-maybe $25-35 per month. I've seen too many people lose EVERYTHING, and the Red Cross can only help in the interim. Its not always something that starts in your home-your next door neighbor-I believe you said you are in an apartment-can have a fire and you can lose alot due to water/smoke damage.

Your student loan payment will probably not be extreme-my payment on what started as $10,500 in loans is $123. You probably won't be able to list that unless you file closer to the time when they would be due.

For your grocery expenses-be prepared to defend yourself at a 341 to the trustee. What I mean is, you have high grocery for a household of 1, but there probably isn't a way to show on your petition that you are feeding, etc. a child ~50% of the time. A simple explanation should handle that.

One other thought-$50 for alcohol may not be a good idea to list. First, you mentioned that you just included that because you saw it on another. Second, your petition becomes public record. You've already indicated that your EX might use your BK against you. Do you really want to give her amunition? To a good custody lawyer, that could turn into a drinking problem.

[StaciMM]

You can click on the ID of a person, and choose to ignore them, if you don't want to see their posts.

Look what crawled out from under a rock!

[JayGZ]

I certainly did not need to hear from Lightning. Doesn't improve things at all for me. Why he feels the need to point the finger at everyone as a deadbeat freeloader is beyond me. I am now "ignoring" him.

I was using the term "fresh start" probably to an extreme--that is true. I have yet to see any case where bankruptcy seemed to make things really, really better. I suppose it depends on the case.

I currently pay a buttload in child support, day care and overall care for my daughter. Without that expense, I would be able to narrow my debt down on a monthly basis. As it is right now, I am not able to make all of my monthly expenses and cover credit card debt and loans, medical bill.

I did not want this to happen. I did not ask for this to happen. And, in many ways, I am paying for it right now (in guilt, in stress, anxiety) and so forth. I realize that doesn't have a monetary value or any impact on my case, but it's a cost just the same. I take responsibility for my debt.

If I was able to get a chapter 7, however, I would see the opportunity to start somewhat over again. I would have added income and an opportunity to save/build a life.

And yes, considering my salary, I would in time as I would hope make more money which would create a bigger gap between my child support/expenses and my overall income, which would be spent in constructive ways that would benefit banks, lenders, the community, etc.

That's part of why I think bankruptcy is available. By helping people get back on their feet, they become more intelligent consumers who will improve their own standing through smarter financial management as well as extend that knowledge to their children for benefit of the next generation.

[AAAArt]

Ignore Lightning! He's a "one note opera" and that note is sour. He is like a vulture who smells blood. Whenever he senses doubt, sincere questioning, vulnerability and niceness in a person, he tries to pick the flesh off of the carcass.
Lightning, You should really get an avatar of a Grinch to put in your profile. Art

[FDNYLadder124]

You pay 36% in income taxes without receiving any refund? I find that very hard to believe. Stop giving the government a free loan, and up your exemptions.

I can't imagine a trustee falling for your definition of "poverty". You make $75k a year and have only 1 dependent and you claim to be unable to pay your debts? You chose to borrow a boatload of money. Pay it back. Show your daughter what it means to be a responsible adult.

Hey Scumbag, I thought you and I were gonna have a little lesson in being nice? Climb out from your Cespool hole so I can shove your keyboard up your arss. I'll be following your every degrading, insulting post until I break u down touch-hole, so be nice, or I'll tell your mommie, and she'll take away your AOL and your Ipod..
Your friend,
Tonka Truck

[Pinktiger]

Jay, you don't say how old you are or what type of work you are in, but I think you might be able to save yourself bankruptcy by getting some true credit counseling. What you are dealing with here is some realities - a divorce can do that for a person. You are depressed and unhappy, and starting to feel very alone.
I have no idea what part of the US you live in; but unless you live in a large city, your rent is high; and your grocery bill is very high. There are ways to cut down.
Student loans and child support payments are not dischargeable. You will still have those. The credit card debt and the two loans will go, but I assume you will want to keep your car, so you will reaffirm that, correct?
I think if you scaled back your day to day expenses and moved to a cheaper place, you could pay back your debts in three to five years and save yourself the grief of bankruptcy. If you were facing $100,000 of debt I would say file; but under the circumstances and the new guidelines, you will be forced into a chapter 13 and it will be a long, costly and very depressing process. Right now I feel you need to not become more depressed than you already are. Maybe before you do this you need some grief counseling and family counseling. And stay away from the alcohol (Sorry - this is your mother speaking, LOL).

[JayGZ]

What luxuries should I do away with? Medicine for my daughter when she has a cold. Can I do that for 3-5 years? How do I put new tires on my car?

I'm already in a relatively cheap 2BR apartment. It has to be 2BR in order for me to have my daughter stay with me. Any cheaper and I would have questions about safety.

I am not drinking, so that's not a problem.

I am 35 and I work in the health care field. I live in a big city in Texas.

I have gotten "true" credit counseling and it was awful. It was through CCCS and she did little to realize my true monthly costs and even incorrectly figured out my monthly expenses. She said I could do their program but it would be tight. She was merely trying to get me in the program, I believe, rather than stating the obvious.

I've also received some conflicting information on this site in regards to chapter 13, which is bothersome. Considering that I have little to no disposable income after all my expenses are paid, chapter 7 is still in the cards. Others have mentioned that any bonus or pay increase that I receive will automatically be subject to payment to the trustee instead of to me in chapter 13. I've received legal counsel that this is false.

If I were to get into a chapter 13 and pay a small monthly amount and still be able to build a savings of some kind, I think that would far from depressing.
And how is chapter 13 costly? I would be paying what I could over the course of 5 years. Much less than the true balance of my debt.

Depressing is seeing your daughter coughing and thinking about taking her to the doctor and then wondering about the cost involved.

If anyone wants to take shots at me for what I've stated above, please go ahead.

Pinktiger--thank you for your advice. I do appreciate your thoughts and opinion, and I hope my post doesn't come across curt.

I've just exhausted my options.

[StaciMM]

JayGZ-
One reason I've assumed (not good, I know) that you'll end up in a 13 is your higher than average income, AND you have posted several times that if you could do 7 and wipe out all the old, you'd have money to save since you wouldn't be paying your creditors anymore. If you have money to save, you have money for a ch. 13 unless its just extra money from a month here & there where you have less expenses. After seeing where you posted your expenses, I'm not sure where the money to save is coming from...

Medical care, car maintenance, etc. are NOT luxuries. You should account for those in your expenses. If you spend $200 on tires a year, and $20 on an oil change every 3 months, and $200 for other items (filter replacement, headlight bulb occasionally, brakes) then that would be $480/year or $40/mo you would list on your schedule of expenses.

One last thought-regardless of if/how you decide to file, and whether you use an attorney, a legal aid, or something else, you should research as if you were doing it solo. My reasoning is this: if you trust someone else to do it right, and they make a mistake or miscalculate something, YOU are on the line more than them. Review your petition, make sure EVERYTHING is correct before you sign it and allow it to be filed. Also, when you calculate your income, make sure to account correctly for your payroll period. If you take home pay every 2 weeks is $2000, you actually bring home $4333/mo.
($2000X26 pay periods / 12 months) Something as minor as that can be significant in the end.

[FoolAndHisMoney]

JayGZ, the reason why you are getting conflicting answers is that most of us don't know with the new laws. The only real answer would be form B22. If you do that form it will tell you it you qualify.

Median income is only part of the answer. I know people below the median with $500 a month in savings and people way over that are struggling and not living a good life.

I'd do the form and get an answer.

Good luck!