Chapter 13 Struggles... Barely able to make payments... may divorce...

[dbr]

Living the dream --- not. Maybe some body can help me. We filed ch 13 two years ago, payments are 2,700 per month. We expected to receive raises as we do every year, but they were lowere due to bad economy. Point is the payments are stifling, no money left over. Four kids, three teenagers and one in college. We fight constantly over spending ten dollars on something. We are receiving a tax refund of 2,000 this year. We are requesting to keep it to pay for everything we cannot afford, you know food, tires, brakes etc.
Question 1 is..... if we divorce what happens to the ch 13/? I will move out get an apartment. Do they amend the ch 13 to reflect new expenses? KIds will complicate the divorce a little, this is not about fighting for custody and every last thing, this is about being able to survive, we both agree. Can we/she keep the house, with lower ch 13 paymwnts we can swing it with my support most likely.
Question 2 is ..... is it possible to for one of us to file ch 7 if the numbers work? Our attorney has explained that if we file for divorce they will not represent us and we m,ust fing a new attorney, understand, but how in the he** can we afford new attorneys, do we stop paying the ch 13?
If we stop paying, we get dismissed and then we are back where we started. Conundrum big time!
I have spoken to another attorney, he advised very little saying we must fire our attorney and then hire him, wtf?
How about I just jump off a bridge and settle the matter that way ----- ahhh, not my style.

We went into this wanting to pay what we owed. We had a construction business that went under forcing us into this, not from credit cards and massive consumer debt. I did not sign up for not being to take my wife & kids to a movie every once in awhile or out for a pizza. This is insane.

Our attorney is one of the factory mass produced bk's, never talk to attorney always the same paralegal, never get answers just more questions, which I understand it can be complicated, but no end in sight.

Please help!!!!

[dbr]

Barely able to make payments... may divorce...

I am new here and have many many questions. I agree that bk should be used for honest purposes, ours was and is. The problem is we were devastated by the amount of our payments (2,700). We have sucked it up mostly by wife working ot, I am salary, but ot is less now. We are afraid that once we request, our taxes are front and center and they will raise our payment because of the ot.
We are simply not able to afford any extra added to the payment. We need that money and we need lowr payments. No one in the system, (attorney, trustee, court, etc) cares wether we can afford the plan to begin with, we objected when we started bt had no choice, the walls were closing in.

We are now considering a divorce simply because we cannot continue. Everything cost more, no raises, no relief.

Chapter 13 is a living hell for us. We have cut to the bone, shop only with coupons, if it aint on sale we aint buyin.

What a shame - I have to destroy my family to be able to afford gasoline to get to work and to buy food.

I could go on and on but there is no relief. Thank the insurance compan ies for raising our home owners from 900 to 2,400 per year (soley because we filed ch 13). Just one of the things we have to deal with.

I know we can petition for modification, but my wifes ot will cancle that and now she gets none.

Four daughters, two teens and one in college, see where I am going. Expenses continue to rise but not pay, or very little.

Just a quick snapshot:

Net pay - 8,000 month

BK - 2,700
Mortg 2,500
Fuel - 650
Insurance - 275 (waiting for that to go up because of ch 13)

Now figure all the little (not so little) expenses for evrything else and you see where we are. We might have 3-400 left over of nothing unexpected comes up.

I drink alone. But not much cuz I cannot afford to.

[AngelinaCatHub]

Wow dbr you are having it tough. Is there a way that you can go 7? Would a divorce be a tactical maneuver or a real divorce. We once started a tactical divorce on order of our attorney (a jerk) in a lawsuit with my enemy. We never went through it.

I don't know what your insurance company is thinking when they raise your rate due to bk. It has nothing to do with your house. Certainly if you are bk, they taking more money from you is just plain mean. 'Hub

[AngelinaCat]

Hi dbr: Welcome to the forum. I moved your post and its response into a thread of its own so that it would be better seen and responded to by the members.

If you have an attorney, you and your wife need to get with that person immediately and explain all of this and see if you can lower the payments. I know you said that the attorney and trustee doesn't care, but please try again. No one wants to see a Ch13 fail.

Also know that you and your wife are not alone in this...

[momofthree]

How was your payment arrived at? Did you have to pay in a minimum due to mortgage arrears, IRS, or non-exempt assets (ch.7 liquidation test)? Or were you a simple non-asset case with "too much" income and therefore failed the means test?

IF there is no minimum plan base, then what I see from what you've posted is that you went to a BK mill who wanted to just rush you thru and didn't give a rat's ass about creating a workable plan for you.

I'm going to use figures for a family of 5 since it is up-in-the-air as to whether or not a college-aged kid will be allowed to be provided for in your plan.

IRS monthly standards for family of 5:

food, clothing, personal care items, household supplies, & misc: $1639
medical: $300
utilities: $500 (average IRS standard for Missouri, actual depends on your county)

Then add in your other expenses:

$2500 mortgage
$650 fuel (this is way above IRS standard, but it should be allowed when the expense can be proven)
$275 insurance
$100 car tags & maintenance
$100 home maintenance
$75 recreation, subscriptions, memberships, etc.

=$6139 + car payment(s)

If you have $0 car payments, then your payment shouldn't be more than $1860ish/mo based on an $8000/mo net income. Car payments should lower that number even more.

Does that $8000/mo include your wife's overtime?

How long have you been in your ch.13? If not long, then it might be worth dismissing it and hiring a competent attorney to file a new case for you with reasonable expenses. It would also give you a chance to purchase new vehicles if needed. If you've been in it for a couple of years, then it's time for an amendment to your plan. Again, this all hinges on the idea that there is no min. amount needed to pay in.

[Pandora]

I agree with Momofthree - something doesnt sound right with your plan / lawyer. You shouldnt have to file for divorce in order to make your plan work or to file separate 7's. It sounds like your lawyer based your Ch. 13 on income alone on the means test vs. doing it the correct way (means test + DMI). You can be -DMI and still qualify for a Ch. 7 - there are many on here that have done so successfully that were well over median.

And...just read your other post.... no jumping off bridges Mr! Family is everything and nothing in life is worth taking that way out. As my son likes to say when things get tough/stressful for him or for us "Just keep swimming..just keep swimming..." Finding Nemo... great movie!

Hang in there... it will get better. Just sit down and really go over everything. If you must fire your attorney to hire another, then see what you can work out with the other attorney for fees. There is also speaking with the trustee option....

[dbr]

WOw! I had no idea how powerful this site was, wish I would found it before we filed. People you don't even know willing to help, and give encouragement. Thanks to all!

We are definately at a bk factory, powerful marketing made us feel the opposite.

No bridges close enough, I would have to drive and I can't afford the gas. LOL Not my style, we will survive, just not sure of the path yet.

A diviorce would be more of a tacticle move, although we have both suffered and now the kids too. We have to take whatever steps needed (legal) to overcome this. If a divorce will accomplish that, so be it. We are still there for each other and no court can take that away.

OK to answer the questions: I will try my best.

Mortgage arrears not included, we were two payments behind, now only one.
No taxes or any of that.
Failed 7 means test, way too much income
Oldest daughter in college, full time, still at home
Medical and utitlies are about right,
Food is probably around 1,000, but does not include school lunches, three kids 4.00 each perday, yes they take lunches sometimes, wife works midnights and I leave by 6am, sometimes very difficult to prep box luch.
remaining 639 sounds like a lot but is most used up for added fuel expenses
Medical costs are expected to increase next year by about 100 per month, yes we already have been told, company no longer absorbing increases, all up to the employees now.
Mortgage went to about 2,700 after insurnance increase, just notified increase of only 100 per month, not 200 -- yea
Car tags and upkeep, more like 150 per month, older car 2004, needs work and my truck has been crashed for two years, can't fix it, need 3000 for that. Kids love being driven around in that. Keeps getting better eh?
Home maintenance, just spent 1,500 for carpet after basement flooded, daughter bedrooms. That came from a child support check my wife received after five years of nothing. Luck timing, but spent the whole thing getting kids back in their bedrooms. Air condintioner motor also fried, 500 for that, insurance agent (friend) paid for that, could not cover it. So now we need to do the regular maintenance, mulch, paint, weed control, gas for mower, we live on an acre, takes a lot maintenance for that. Is the pool getting opened? Nope, needs new liner, neighbors get to ask why the pool is falling down. Just a cheap above ground had it for years, not really living the high life. Can't afford to tear it out and can't afford to take care of it.
I don't understand the minimum amount to pay in, is that listed in my bk papers. I have looked, just cannot find it?
All property from business (personal gaurranty) was foreclosed on, bank bought (back) all property at sale. Probably about 125,000. All appraised for over 350,000 before armegeddon. We had some property and two houses under construction when the tank went to empty.

I know this is long and maybe not explained the best, but I certianly appriceate all the help, so does my family.

Thanks a trillion

[dbr]

By the way, also: Angelina cat thanks for the help!

[momofthree]

I would use the flooding expense and air conditioning repair as reasoning to keep the tax refund. Those are more "unexpected" expenses that will seem necessary and reasonable. When you ask to keep a refund for daily living expenses, they're more likely to turn you down.

It really sounds like you need an amended plan filed. I would also submit a request to take on new debt and buy a new vehicle. If you don't have a car payment now, then I'd bet you'll get approved.

Wait until your wife's OT drops off the look-back and then make an appointment for a face-to-face meeting with your attorney to file an amended plan. If they are unwilling to help you, then it would be worth the money to hire a new attorney. The fees would most likely just be added into your plan anyway, which means your unsecured creditors would just get less, it shouldn't increase your payment at all. In fact, with a competent new attorney, your payment should drop substantially.

Good luck and keep us posted!

[IamOld]

Hello DBR - please listen to the wonderful folks here - I would add a few more things:

re homeowners insurance - it is POSSIBLE that the rate went up because your area was re-rated because of the horrific changes to the weather...(I'm sort of in the business) - may I recommend - PLEASE PLEASE PLEASE contact SEVERAL insurance agents - go to Liberty Mutual (they work for the company) and try all the "name brands" plus Independent Insurance agents - keep trying - you can usually get a discount if you place car (and no you do NOT have to wait until your policy expires)ins and house ins with the same co - ALSO - see if ANY organization you belong to, alumni assoc, etc., has discount affinity deals with any ins co - some employers also have the same deal. TRY this - may just be suprised and can get a better deal.

Now - if your mort went up, and your HEALTH INS thru work goes up that..."should' reduce your trustee payment as those are direct offsets.....have you run that by your atty???

BEst wishes and let us know how this turns out....

[lrprn]

@dbr - I moved your post here into its own thread from the Feb 2011 thread you originally posted to. You'll get more views and typically more answers this way. I also merged the thread you did start with the this one as well.

It's crystal clear you are very frustrated and very stressed. We want to help. However, please do not post the same questions in more than one forum location. It splits up the answers members are trying to give you, and in the long run you will get less information than you could have if everything was kept in one place. (It's also against the forum rules as well and this is why.) Thanks!

Question 1 is..... if we divorce what happens to the ch 13/? I will move out get an apartment. Do they amend the ch 13 to reflect new expenses?

If by "they" you mean your bk attorney, yes. Your plan can be modified to reflect your new circumstances if divorce does enter the picture. Depending on the retainer agreement you signed with your lawyer, it may cost extra to do this so be prepared.

Can we/she keep the house, with lower ch 13 payments we can swing it with my support most likely.

It depends on how the amended financial figures for both of you and the divorce agreement terms work out.

Question 2 is ..... is it possible to for one of us to file ch 7 if the numbers work?

First, one of you has to be able to support an amended Ch 13 plan alone. Second, the other of you has to qualify to file Ch 7 by having no disposable income on the Means Test alone. Is this the case in your situation?

Our attorney has explained that if we file for divorce they will not represent us and we must find a new attorney, understand, but how in the he** can we afford new attorneys, do we stop paying the ch 13?

You can't stop paying the Ch 13 plan just because you plan to get a divorce. You can dismiss the Ch 13 case to save up enough to retain divorce lawyers (chances are you both will need one) and one of you refile the Ch 13 after the divorce, but that opens the door for your creditors to swoop in again until one of you can refile. If your debts are shared between the two of you, then you'll have to figure out what is possible to wipe out both of your debts after divorcing.

I have spoken to another attorney, he advised very little saying we must fire our attorney and then hire him, wtf?

Once you have retained an attorney, other attorneys cannot represent you. Attorney #2 is right - you have to fire attorney #1 first. Then you can sign a retainer with attorney #2 to represent you.

We went into this wanting to pay what we owed. We had a construction business that went under forcing us into this, not from credit cards and massive consumer debt. I did not sign up for not being to take my wife & kids to a movie every once in awhile or out for a pizza. This is insane.

We don't know the details of your case, but it sounds like your problems could be stemming from a badly crafted Ch 13 plan by an indifferent or lazy bk mill lawyer.

A question for you - did you sign your bk forms knowing that you very likely couldn't survive financially after making the monthly payment required?

Our attorney is one of the factory mass produced bk's, never talk to attorney always the same paralegal, never get answers just more questions, which I understand it can be complicated, but no end in sight.

Given that you have a business involved in your 13, hiring a mill bk attorney was likely not a good decision. Generally bk mills do not do a good job representing filers with complex cases (mortgage stripping, business debts, etc.)

You can fire your current attorney to find better representation, but understand that your new better bk attorney may charge more to clean up a messed up case filed by your first lawyer.

You are in a tough spot, but there are always options. It's time to decide (1) if you are going to go back to your first attorney, make an appointment for a face-to-face meeting, and hash through where you are falling short; or (2) if you are going to fire attorney #1 and try to find better representation. Both have consequences that you need to take into consideration before deciding what's going to be the best option for your family's unique financial situation.

Keep asking questions - we'll help you sort things out as best we can. But at the end of the road, you and your wife will have to decide which path to take. Good luck to you both, and I hope that divorce will not be in your futures.

[WillBucko]

dbr,

I don't have any specific advice for you but, if misery loves company, then you're in good company. We are in a similar situation - four kids, oldest going to college in the fall, struggling to work with our budget. All I can say is "hang in there" and find an attorney who will work for you. I'm learning that our attorney's job is to serve as legal counsel, but we are the ones who need to keep finding ways to make things work. Exhaust all options, then think of some more.

Will

[ValleYum]

Wait until your wife's OT drops off the look-back and then make an appointment for a face-to-face meeting with your attorney to file an amended plan. If they are unwilling to help you, then it would be worth the money to hire a new attorney. The fees would most likely just be added into your plan anyway, which means your unsecured creditors would just get less, it shouldn't increase your payment at all. In fact, with a competent new attorney, your payment should drop substantially.

Good luck and keep us posted!

Why does he have to wait until the wife's overtime income drops off the 6 month lookback? Didn't the Lanning decision change that?

No disrepect is meant to you momofthree by my question - I am just curious.

DBR I wish you good luck!!

[momofthree]

Why does he have to wait until the wife's overtime income drops off the 6 month lookback? Didn't the Lanning decision change that?

From what I understand (could easily be wrong--wouldn't be the first time), Lanning applies to one-time bonuses and occasional overtime. I don't believe it pertains to consistent overtime over a long period of time. Again, I could be wrong.

[enginegirl]

From what I understand (could easily be wrong--wouldn't be the first time), Lanning applies to one-time bonuses and occasional overtime. I don't believe it pertains to consistent overtime over a long period of time. Again, I could be wrong.

It applies to a salary reductions as well. I lost about $10,000.00 of my salary and it was used in my case... got my payment reduced from $1200 to $500.


good luck to you dbr.. I really feel for you...