341 coming up Attorney said Trustee Aprehensive??

[dovette7]

Need your experience please!

We have filed Ch 13 on Feb 15th. 341 is April 10th.

My husband makes six figure income. In 2004 & 2005, so did I. We were living like millionares and were not good stewards of our money. Being in real estate, I made $7500 in 2006. Our income was cut in half. Even though it's still a high income, with my lack of money coming in, we didn't have enough to pay credit card debt. Huge house payment, utilities, motercycle, jetski....
My attorney told me to go into this thinking about where I want to be in 5 years. Would I want a mortgage of $2900 a month? NO! So he said find a place to live and let the house go back.

I'm surrendering the house, motercycle, and jetski
Secured Debt in Plan: $17,000 IRS
$27,700 Auto
$11,300 Auto
$1700 Computer

Unsecured Debt: $119,000

The plan turned in was paying back 1% to unsecured creditors. My attorney told me yesterday that she had spoken with the trustee and he was aprehensive about this. She knows he will object and that an increase in payment is going to happen. She also warned me to be strong and prepared for the trustee to come across in a very derogatory way in the meeting b/c our income is so high. I don't know where else to "cut" expenses.

Rent, Life Ins, Health Ins, Car Ins, Utilities, Food, Cable, Phone, Medical, Rx, Daycare, Car Maintenance, Car Gas, Clothing, School Lunch, Property Tax, Dry clean, Recreation, cell phones.

I have had a herniated disc since Jan and just my medical bills without insurance averaged $430. I alloted $150 a month b/c this won't be every month. I am not able to lift the baby therefore he is in daycare. My prescriptions every month is $310...that's no extra medicines. The attorney said I have to prove all of this, and I can but then she said the trustee may not allow for $310 rx anyway????

We have a family of 5 and I don't know where else to cut from the budget. I intend on staying in real estate therefore my cell phone is my work phone. The attorney said if my husband's cell was necessary at all, then his work should cover it (that may be what the trustee will say) We have a very large life insurance policy on each of us that cost $220 per month. I guess we could try to cut it in half? I just don't know where else to cut back that isn't reasonable living expenses.

I readjusted the budget from the origional one we turned in and with the expenses I listed above, we could go up in payment an additional $293 per month which would pay unsecured approx 8%?? I am just trying to prepare for this meeting and my attorney has scared me to death.

I am emberessed to even be in this situation. We made so much money in the last 4 years and to squander it away. Owe everyone. Not be able to pay for the kids college, contribute to retirement, etc. But I am motivated to pay. It is my debt. My attorney told me that the life I have been living for the last years is not the life I will be living. Luxuries are gone. I'm ok with that. I just don't know what's going to happen here and I am going to have to just wait and see.

Do any of you have experience with making high income with low percentage to unsecured creditors b/c there is a high level of secured creditors?

Any suggestions or advice would be great
thanks

[SinkingFast]

cell phones

[dovette7]

Thanks Minny. We pay $220 a month for life insurance. I feel that will have to be dropped. Food and Clothing the attorney put what is normal here. We discussed that. I guess we'll just have to wait and see. Attorney is telling me to be prepared for the worse. She's doing her job there...I'm getting prepared. Basically she said if we can't come up with agreement and go to a hearing and we feel we can' make the payment, then we can look at our options. I don't have any other options. We owe so much in credit card debt. Not to mention IRS.. I see no other option but bankruptcy.

Honestly I am praying for continued strength and wisdom. God will carry me through this I know, it's just so hard.

Maybe you can answer a couple of these questions for me.

1. I have a 17 year old daughter (dependant) who has a 2 year old son (we claim as our dependant also since we provide everything) There is no child support from the father. Do you think Trustee would have a problem with claiming grandson?

2. If I am in a 5 year plan, and 3 years into it, my daughter gets married and moves out. Do I let somone know that I know only have 3 people in the family?

3. When we submitted the payment plan Feb 15th , it is $360 per week. It has started coming out of husband's paycheck and I paid the difference for the first 2 weeks before automatic withdrawel. If Trustee changes payment and the plan is confirmed May 7th for the higher amount, do I have to come up with the difference from Feb - May?

[dovette7]

Sorry Sinking Fast. Called you Minny b/c I had just read one of her posts!

[SinkingFast]

To your Dependents status,.......... Much of the BK Code refers back to the IRS and Census Bureau definitions. That's true of who is and is not a dependent.

From the IRS Website:

http://www.irs.gov/publications/p501/ar02.html#d0e2941

About your daughter,.......... No problem there. She's definitely still a dependent. You should be able to claim her as long as she continues to live at home and remains a full time student.

I say "live at home" because,........... Since the New Law took effect, Trustees are pushing the envelope on college aged kids.

If the child goes away to college then the child lives outside the home the greater part of the year. Debtor/Filers are not required, by law, to pay for college. So when kids go away to college, Trustees are successfully excluding them from the household count to determine family size.

From the IRS,.............."The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student, or (c) any age if permanently and totally disabled."

The Grandson,........... That's gonna depend on whether or not your daughter files taxes and who claims the child as a dependent.

"If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child."

Further down on the page is an Example very similar to your own, except for the age of the daughter:

"You and your 3-year-old daughter, Jane, lived with your mother all year. You are 25 years old and earned $9,000 for the year. Your mother is not your dependent. Jane is a qualifying child of both you and your mother because she meets the relationship, age, residency, and support tests for both you and your mother. However, only one of you can claim her. You agree to let your mother claim Jane. This means your mother can claim Jane as a dependent and can claim her as a qualifying child for the child tax credit, head of household filing status, credit for child and dependent care expenses, exclusion for dependent care benefits, and the earned income credit, if she qualifies for each of those tax benefits (and if you do not claim Jane as a dependent or as a qualifying child for any of those tax benefits)."

Basically, in that example, you can claim your Grandson, so long as your daughter is not claiming him as a dependent, Grandson lives with you most of the year, AND you are providing more than 50% of Grandson's expenses to live.

If and when your daughter no longer attends school or does get married and leaves home, you will have to inform the Court of your Change in Status. Because your family size will be reduced and presumably your expenses will go down, most likely your plan will be ammended to higher plan payments.

I'm not really a Ch 13 person, so hopefully others will chime in about whether you'll have to make up any difference should your proposed plan payment increase.

[aa06a47]

I would fight for the medical cost associated with the herinated disk...I would fight for everything you listed as long as the expenses are real. The last thing you want to be in is a chapter 13 where you know that your going to fall short on your prescription medication / etc.

Yes, the luxuries will more than likey be gone while your in the plan. Do not let the trustee cut your actual medical expenses. I would actually go before a judge before I would let that happen, and your lawyer should not be afraid of that either.

As far as letting your large house goes...here is my opinion for what it is worth. If your home is in a good neighborhood with values increasing, I would keep it. Sell it after the bk is over and have a good wad of money to put down on a cheaper home. Whatever you save now, will be money that simply goes to the trustee. If you drop your house payment 400/month, for example, your payment to the trustee will simply go up 400/month. If you don't feel the home will appreciate in value or your upside down in it...let it go.

[aa06a47]

3. When we submitted the payment plan Feb 15th , it is $360 per week. It has started coming out of husband's paycheck and I paid the difference for the first 2 weeks before automatic withdrawel. If Trustee changes payment and the plan is confirmed May 7th for the higher amount, do I have to come up with the difference from Feb - May?

Yes, but the difference doesn't have to be made up all at once. My payment changed $130/month between when I filed and when I confirmed. I had only made 3 payments so I was $390 behind. They told me to make up the difference as soon as I can...actually, they were very laid back about the whole thing...like just pay it before 5 years is up. I was so scared about the whole thing, I paid it back in a couple months.

You should ask your trustee there policy...some may want it immediatly.

[dovette7]

Too late on the house. We moved out in Dec. Lowered mortg from $2900 to $1750 rent. I couldnt' afford that house. It was in a wonderful neighborhood but nothing was selling. There was a pool and therefore water bill was high and there was 4 months in a row my electric was $700. Couldn't keep all that up. I have a lot of secured debt. The attorney said the trustee wouldn't go for the 1% payback of unsecured b/c we make soo much money and b/c we have so much secured debt.

I have given the attorney everything she needs. Now I wait. This is so consuming. How can I get this stuff from my every thought? So hard.

[quietsound]

i don't understand because if you make x amount of dollars and they do a budget and what is left over goes to the plan...........i don't understand what more you could DO. if you have $100 left, you have $100 left. can't give $500 if you have $100 left. regardless if your paying back 1% or 100% don't care how much you make, or how much you owe.

See I would feel VERY uneasy with a lawyer who doesn't sound sure. Heck bankruptcy is scary enough when your lawyer sounds and acts sure and sound.

[dovette7]

Maybe she is just preparing me for worst case. That trustee may say no to all cell phones b/c they are not a necessity. That I need to make sure and have documentation for everything like medical bills and rx. That he may not allow the amount we pay in life insurance. I just don't know. , but she said she wanted me prepared for trustee to be derogatory. Hopefully it won't be that bad...and it's really out of my control right now and I just have to let it go and let God. That' s the only way I am staying sane right now.

[Granny]

Why would the trustee not allow your medical, especially if you have documentation.

That is one point I am wanting to amend on my plan because attorney #1 cut our expenses to half of what we incurred last year. With 2 little ones and two old foggies and no insurance, we are gonna have medical expenses.

I don't understand.

[quietsound]

I dont' understand either...it really makes me mad, there again, here we are, the little people who have no money and trying to declare bankruptcy and pay on a plan and all they do is knock you down.........if we were millionaires or knew someone important we would just skate right in.

[SinkingFast]

You're caught in the cross hairs, Dovette. Pure and simple.

You're a higher income filer. The New BK Law hasn't achieved what the CC companies spent bookoo bucks lobbying Congress for. Trustees are under the gun to make it stick where ever and when ever they can.

When I first joined the Forum, it was the transition period. Mostly Old Law filers here due to the back up of the mass filings in September and October '05.

Since many of the Posters now are New Law filers, the chances the UST will get involved has increased significantly. Before, under Old Law, hardly ever. Now, quite a bit.

Hold the line on your necessary expenses where you can. Only give if you absolutely have to. Remember, you've got to survive with this budget for several years.