Budgeting before and after BK

[AngelinaCat]

When we did our pre-filing counseling class--with a real. live person talking with us and crunching the numbers--we were trying for a Ch13. The counselor told us that we were better suited to a Ch7, as we had more outgo than income. When I lost my FT job, then we had no choice but to do the Ch7.

[TheBajan]

We are hoping to be file a 7 but we might have to much equity in our home and might have to do a 13 although when we went and did credit counseling they said we would pass the chapter 7 means test but advise we talk to a lawyer. We have talked to lawyers and waiting to choose from 2 waiting to see what they said when we get the CMA of our home.

Pam

We met the means test for a 7 but we have two vehicles and a rental property that are paid for so we were advised to do a 13 to protect those assets. We were also told not to have too much cash in our accounts or on hand because it would be considered an asset that would have to be payed back. We stopped paying CC in Oct/Nov and in Dec we were hit with property taxes on both properties. We also had to pay annual premiums for two of our insurance policies so all of that, along with Christmas, pretty well wiped us out by the time we filed. Since filing, we are actually starting to have a little cushion in our accounts for the first time in FOREVER (it seems) and it's actually uncomfortable for me. I'm so afraid the trustee will come in and take it away. Can anyone relate to those fears?

[LadyInTheRed]

TheBajan, you have nothing to worry about. Assuming you haven't had a significant increase in income since filing that would require you to modify your plan, you can keep whatever you can save during your Chap 13. After all, you need that cash cushion for next year's insurance premiums.

[pamkev]

We met the means test for a 7 but we have two vehicles and a rental property that are paid for so we were advised to do a 13 to protect those assets. We were also told not to have too much cash in our accounts or on hand because it would be considered an asset that would have to be payed back. We stopped paying CC in Oct/Nov and in Dec we were hit with property taxes on both properties. We also had to pay annual premiums for two of our insurance policies so all of that, along with Christmas, pretty well wiped us out by the time we filed. Since filing, we are actually starting to have a little cushion in our accounts for the first time in FOREVER (it seems) and it's actually uncomfortable for me. I'm so afraid the trustee will come in and take it away. Can anyone relate to those fears?

Both of our cars are paid for also although we have more outgoing then coming in Pam

[TheBajan]

Lady,
Thanks for that... no increase as of yet. I did interview the day before yesterday for a job but still don't know if I will get it and it turns out to only mean about a $120 a week. After the additional gas and related expenses... it's hardly worth it. It doesn't even offset the decrease my husband has had in his pay over the past two months. Still... if it's offered to me I will take it. There is hope it could turn into something more significant. Ironically, the position involves daily auditing of the finances. I am guessing that when they see the BK on my credit report they will reject me as an applicant. They didn't ask me about my credit so I didn't tell. We'll see what happens.

[pamkev]

Lady,
Thanks for that... no increase as of yet. I did interview the day before yesterday for a job but still don't know if I will get it and it turns out to only mean about a $120 a week. After the additional gas and related expenses... it's hardly worth it. It doesn't even offset the decrease my husband has had in his pay over the past two months. Still... if it's offered to me I will take it. There is hope it could turn into something more significant. Ironically, the position involves daily auditing of the finances. I am guessing that when they see the BK on my credit report they will reject me as an applicant. They didn't ask me about my credit so I didn't tell. We'll see what happens.

Wishing you the best for this job

[fileda13]

1. Before filing for bankruptcy, did you keep any sort of written budget? Please explain.

I have used Quicken for what seems forever, before that Andrew Tobias Managing Your Money. The use of these was for historical and reconciliation purposes. I knew to the penny (almost) what I had and what I spent. I reconciled my bank accounts and credit cards. It has a budget feature, but I kept my budget on excel. It was easier to see a year ahead with organized columns. I could tweak and adjust the budget easily.

2. If so, did you use a popular software (such as Quicken)?

See answer to #1

3. How has your budgeting habits changed since filing?

After being humbled by Chapter 13, I use my budget as a budget, not as a way to decide what I want and what I can spend. Before, the budget included minumum payments to credit cards. It didn't matter if the charges continued to pile up, as long as the minimum payment stayed within budget. It's not that I was purely frivolous, but it was easier to go out and buy better quality things at a quicker pace. Now, since there is no wiggle room, the budget is a 100% spending budget. Every penny spent is accounted for, as there isn't any minimum payment stuff in my budget (because it doesn't exist anymore).

4. What would you say is the most important lesson you have taken to heart through this process?

Spending control - living within your means. I'm a CPA, and I knew where every penny was spent and what was happening. But credit cards created such a flase comfort zone, that I viewed the stuff I wanted to and bought as more important than the savings it was coming from. I never tried to change the way I lived - always had an excuse. I never considered my self a wasted spender, meaning if I needed a TV I had to get the absolute top of the line. But I am a believer in you get what you pay for, so I always know where to look for quality. But the cost of quality never aligned itself with the cost of living until after the Chapter 13 process. This has nothing to do wityh me being a CPA and understanding finances. This is something that happened for a variety of reasons, none of which really matter. My life took this path, and Chapter 13 has shown me a light others don't see. I wish I made enough money to stay in Wally World. But like the movie The Matrix I was awakened to see the world as it really is, and I am now learning how to live in it.

[TheBajan]

1. Before filing for bankruptcy, did you keep any sort of written budget? Please explain.

I have used Quicken for what seems forever, before that Andrew Tobias Managing Your Money. The use of these was for historical and reconciliation purposes. I knew to the penny (almost) what I had and what I spent. I reconciled my bank accounts and credit cards. It has a budget feature, but I kept my budget on excel. It was easier to see a year ahead with organized columns. I could tweak and adjust the budget easily.

2. If so, did you use a popular software (such as Quicken)?

See answer to #1

3. How has your budgeting habits changed since filing?

After being humbled by Chapter 13, I use my budget as a budget, not as a way to decide what I want and what I can spend. Before, the budget included minumum payments to credit cards. It didn't matter if the charges continued to pile up, as long as the minimum payment stayed within budget. It's not that I was purely frivolous, but it was easier to go out and buy better quality things at a quicker pace. Now, since there is no wiggle room, the budget is a 100% spending budget. Every penny spent is accounted for, as there isn't any minimum payment stuff in my budget (because it doesn't exist anymore).

4. What would you say is the most important lesson you have taken to heart through this process?

Spending control - living within your means. I'm a CPA, and I knew where every penny was spent and what was happening. But credit cards created such a flase comfort zone, that I viewed the stuff I wanted to and bought as more important than the savings it was coming from. I never tried to change the way I lived - always had an excuse. I never considered my self a wasted spender, meaning if I needed a TV I had to get the absolute top of the line. But I am a believer in you get what you pay for, so I always know where to look for quality. But the cost of quality never aligned itself with the cost of living until after the Chapter 13 process. This has nothing to do wityh me being a CPA and understanding finances. This is something that happened for a variety of reasons, none of which really matter. My life took this path, and Chapter 13 has shown me a light others don't see. I wish I made enough money to stay in Wally World. But like the movie The Matrix I was awakened to see the world as it really is, and I am now learning how to live in it.

Thank you. Very well said. I appreciate your answers... particularly to question number four. I relate so much to what you are saying. Best wishes to you.

[pamkev]

1. Before filing for bankruptcy, did you keep any sort of written budget? Please explain.

I have used Quicken for what seems forever, before that Andrew Tobias Managing Your Money. The use of these was for historical and reconciliation purposes. I knew to the penny (almost) what I had and what I spent. I reconciled my bank accounts and credit cards. It has a budget feature, but I kept my budget on excel. It was easier to see a year ahead with organized columns. I could tweak and adjust the budget easily.

2. If so, did you use a popular software (such as Quicken)?

See answer to #1

3. How has your budgeting habits changed since filing?

After being humbled by Chapter 13, I use my budget as a budget, not as a way to decide what I want and what I can spend. Before, the budget included minumum payments to credit cards. It didn't matter if the charges continued to pile up, as long as the minimum payment stayed within budget. It's not that I was purely frivolous, but it was easier to go out and buy better quality things at a quicker pace. Now, since there is no wiggle room, the budget is a 100% spending budget. Every penny spent is accounted for, as there isn't any minimum payment stuff in my budget (because it doesn't exist anymore).

4. What would you say is the most important lesson you have taken to heart through this process?

Spending control - living within your means. I'm a CPA, and I knew where every penny was spent and what was happening. But credit cards created such a flase comfort zone, that I viewed the stuff I wanted to and bought as more important than the savings it was coming from. I never tried to change the way I lived - always had an excuse. I never considered my self a wasted spender, meaning if I needed a TV I had to get the absolute top of the line. But I am a believer in you get what you pay for, so I always know where to look for quality. But the cost of quality never aligned itself with the cost of living until after the Chapter 13 process. This has nothing to do wityh me being a CPA and understanding finances. This is something that happened for a variety of reasons, none of which really matter. My life took this path, and Chapter 13 has shown me a light others don't see. I wish I made enough money to stay in Wally World. But like the movie The Matrix I was awakened to see the world as it really is, and I am now learning how to live in it.

I can relate to number 4 very well. Thank you for your insight

[TheBajan]

Wishing you the best for this job

Pam,
Keep sending those best wishes.... I have a second interview tomorrow at 3:30! Anyone have thoughts regarding whether I should tell them we just filed?

The Bajan

[magic13]

Bajan you are from Michigan, were you in the downtown Detroit courts. If so, did the trustee change your payments from the payments that was set up by your Lawyer. How was the 341 meeting

[TheBajan]

Magic,
I'm in the Eastern District, Bay City area. Just about 2 and a half hours north of Detroit. The 341 meeting went very uneventful. It took about 3 minutes and all the worrying and fretting I had been doing was for nothing. The trustee did not make any changes to the proposed plan. However, our lawyer needs to amend the plan because a couple of number on different pages didn't match up. It may cause our payment to go from $250 to $315 but we still don't know yet. The confirmation hearing is on April 5th. I'm hoping it goes as smoothly as the 341.

[TheBajan]

Wishing you the best for this job

I just found out I got the job!

What it means to us?? It's only part time but it's a foot in the door and most of all it means my husband doesn't have to work his second job! He's been working himself to death and it's soooo good to be able to do something that will relieve some of the load from him! Thanks for those best wishes... and thanks to God for His goodness! Three years of searching! The timing is so ironic. Not that this job would have saved us from bankruptcy.... just that it's now instead of during the means test!

Cheers!
The Bajan

[pamkev]

I just found out I got the job!

What it means to us?? It's only part time but it's a foot in the door and most of all it means my husband doesn't have to work his second job! He's been working himself to death and it's soooo good to be able to do something that will relieve some of the load from him! Thanks for those best wishes... and thanks to God for His goodness! Three years of searching! The timing is so ironic. Not that this job would have saved us from bankruptcy.... just that it's now instead of during the means test!

Cheers!
The Bajan

I'm so happy for you