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What is your best advice for a successful 13?

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  • What is your best advice for a successful 13?

    Just received word from our attorney that after running the numbers, it looks like we are definitely in a 13 and that our payment plan will be about $375 per month which seems to work out to a 55% repayment after factoring in attorney and trustee fees. Our cars are being paid outside the plan so now we just need to decide if we should cram down the older vehicle. We have three years left at $433 per month but if we do the cramdown it will take it out to 5 years at about $250 per month. But my understanding is that any "savings" we would see would go to unsecure creditors so that may not be the best strategy regarding the vehicle. Will talk to the attorney further about that.

    Now for the advice. Since many chapter 13 plans fail, and my husband and I are not used to living on a budget, what advice can those of you deep into your plans or those that have successfuly completed your plan can you share with those of us who are just setting our feet on this journey? I would love to hear any tips or strategies you have employed. Thanks in advance!
    Filed: 8-19-09
    341: 9-21-09
    Notice of Discharge: 11-28-09

  • #2
    Me too....we're filing on May 21st and I could use some good advice too....
    CH13 filed 5/21/09; 341 6/17/09; confirmed 7/14/09]
    Discharged: 7/25/12

    Comment


    • #3
      I'm not "deep" into our 13, just 4 months. We have 4 children and were very dependant on credit cards, never even considered a budget.... (so thus reason we are where we are.) I was scared to death to do this, what? live without credit? I just didn't see it working. But we had no other options...
      So here we are, 4 months later, and it's the best thing we have ever done!! I sleep at night! All my bills are paid when they are due and groceries are in the pantry. I'm able to buy birthday presents when the kids get invited to parties and the Easter Bunny was able to fill their baskets. All of it is PLANNED out...aka... BUDGET!!! I'm doing so well with it. I keep a binder with all my bills and upcoming expenses. I clip coupons.... amazing how they work, went into the grocery store, got $80 worth of groceries, after swiping my store card and double/triple coupons it came to $32! Yahoo!! I love saving money now. My advice is to be aware of where all your money is going. Know what bills you have and when they are due.
      Our kids are use to eating out....well no more! But when we do eat out they understand it's a special treat. Each payday I buy a $10 gift card to one of our favorite places. That way when we do decide to eat out the entire bill or most of it is already paid for and it didn't really hurt our pocket book.
      I also put $20 in the savings account each pay day. With 4 kids we have plenty of medical copays to pay for, so when flu season hits I want to be ready!
      This is the best thing to happen to us.... I will never use another credit card!
      Good luck to you... this is very do-able if you are willing to do it.

      Comment


      • #4
        Wow Mommy - you make it sound so good!! What encouraging advice you have shared. I love the idea of buying the gift cards in small installments. That way when you want a treat and eat out, it's pretty much paid for. I'm not the best at coupon clipping but with your experience sounds awesome so we'll give that a try as well.

        Keep the advice coming folks. Just got an email from my attorney and she said I "jumped the gun" from her last email and that she is going to see of she can S-Q-U-E-E-Z-E us into a 7 but I want to be realistic about it. If we are for a 7 cool! If we are for a 13, I want to be as prepared as possible.
        Filed: 8-19-09
        341: 9-21-09
        Notice of Discharge: 11-28-09

        Comment


        • #5
          Rule #1 to surviving a 13 - Make a realistic budget together and STICK TO IT. At first keep track of every single thing you buy with cash, use a check, or use your debit card for. Sit down together weekly and go over what you've spent. Learn to tell the difference between what you want and what you need. Watch for patterns and tackle those that get you off track right away. Change your habits and the ways you used to think about money.

          Rule #2 to surviving a 13 - Have an emergency fund. Life will throw you unexpected curves over the life of your plan. You need to save every single dollar you can and put it into an emergency fund to take care of those unexpected things. You can no longer depend on a credit card or loan to take care of the shortfalls.

          Rule #3 to surviving a 13 - Everyone in the family participates in creating a new financial life. If you have kids, they need to understand that money is tight. If they are old enough, have them help you with the budget. Think of the valuable life lessons that Ch 13 can teach all of you if you embrace the opportunity to change old bad habits.

          These are my top three - I'm sure our other 13ers will have excellent ones to add to the list as well.

          Hang in there. 13s are survivable - you just have to be disciplined and consistently stay on top of your finances. Not easy when you haven't been doing that, but many of us here didn't either and we've learned how. You can too.
          I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

          06/01/06 - Filed Ch 13
          06/28/06 - 341 Meeting
          07/18/06 - Confirmation Hearing - not confirmed, 3 objections
          10/05/06 - Hearing to resolve 2 trustee objections
          01/24/07 - Judge dismisses mortgage company objection
          09/27/07 - Confirmed at last!
          06/10/11 - Trustee confirms all payments made
          08/10/11 - DISCHARGED !

          10/02/11 - CASE CLOSED
          Countdown: 60 months paid, 0 months to go

          Comment


          • #6
            lrprn - your advice is golden as well. I know we will have to have a budget. My husband isn't all that keen on it but we got to where we are by flying by the seat of our pants and abusing credit so that has to stop, obviously we won't have the credit cards as a crutch any more. I also love the advice about the emergency fund. I am going to work on putting every extra penny away. It's scary to think I can't just go to Lowes or Home Depot and open an instant credit account if we have an emergency so I will definitely take your advice and plan plan plan for emergencies. Thanks!!!
            Filed: 8-19-09
            341: 9-21-09
            Notice of Discharge: 11-28-09

            Comment


            • #7
              We're just about 2 years in.....

              **If you can go on a *budget* plan with the utilities, do so. You'll know exactly how much you will be billed each month

              **We started off using envelopes (fun money, gas, grocery, household) with cash in them to get used to our budget. Instead of using debit card for groceries, we would use cash out of the grocery envelope. I put a lot of things back that we didn't need once I started paying cash.

              **Any cash left over in our envelopes at the end of the pay cycle got put into savings. It got to be a fun challenge to see how much we could put into savings

              **We've since stopped using straight cash and have gone back to using debit card, but we've developed the habit of not doing *impulse buying*.

              **Our budget is pretty much planned out 6-9 months at a time, we're not surprised when our car registration comes up for renewal (or any other infrequent but important expenses occur). We have it set up so that the first paycheck of the month pays for bills AFTER the 15th and the second paycheck pays for bills AFTER the 1st of the month (we're always *ahead* so to speak, so bills get paid the day we get them).

              **We start cutting out the minor extras in August/September to save for the holidays. We have a heavy month of Birthdays and such in June, so in March we start setting aside for those. Jan, Feb, June, July are months we squirrel a bit away for US (even if it's for just an overnighter somewhere).

              **Our contact with our attorney at this point is limited. If he doesn't call back right away, we've learned it's because our concern doesn't have a major impact on our case. If it does have a major impact, we get calls back right away

              Perhaps my biggest suggestion is to budget and have bi-weekly *family business meetings* so that all adults concerned know exactly where the finances stand: how much have you saved, what surprises came up, are there any purchases that anyone wants to make, etc. Hubby and I set aside 15 minutes every two weeks to talk about all those issues.

              Other than that we've gotten into the mode of enjoying life again (especially the little things in life).
              Filed 07/07, $120k unsecured debt
              Plan: $400 (includes cram down) 60 months
              Brilliant attorney, decent trustee, awesome plan

              Comment


              • #8
                1. Budget and then budget some more.
                2. If you don't need it, don't buy it.
                3. Save as much as you can on the side; the hot water heater will go when you least expect it; you will need new tires, the washer or dryer will die, etc., etc.
                4. Fly low under the radar. Go day by day and preplan meals. Take lunches to work. Buy bulk.
                5. Yes you can buy Xmas gifts, birthday gifts, etc. We saved our change in a big jar on a daily basis and did not touch it. You would be surprised what you can accumulate in a year's time.
                6. Comply with your Chapter 13. Provide all documents on time when asked (i.e., do you have to provide your tax returns each year?). If you have a change in income, call your attorney immediately. If you should receive an inheritance, do the same. Above all, be honest and don't hide anything.
                7. Pay all bills on time. Do not be late with anything, including your Plan payment. It will all pay off in the end when you are discharged.
                8. We, ourselves, do not want to ever go through that again; when it is all over, put steps in place to avoid getting back to the situation that caused you to file.
                _________________________________________
                Filed 5 Year Chapter 13: April 2002
                Early Buy-Out: April 2006
                Discharge: August 2006

                "A credit card is a snake in your pocket"

                Comment


                • #9
                  Thanks sue and Flamingo for your advice as well. I think I may print this thread out and keep it handy. This is all so new to us. I haven't used a credit card in months now and it felt so strange at first not having that same old back up. Now we think about things before we buy them. We actually did start using the envelope system for grocery shopping and I was "forced" to put a couple of non-essential items back because we did not have enough cash. As we walked out of the store I actually felt good. If we had used a debit or credit card, I would have bought those extra items.

                  This is such a great learning experience. Thanks everyone again for being willing to share your tips and tricks. Anymore out there? We would love to hear from you!
                  Filed: 8-19-09
                  341: 9-21-09
                  Notice of Discharge: 11-28-09

                  Comment


                  • #10
                    I ended my plan (c. 80% to unsecured) with money in the bank, a paid-off car with several good years left on it, and ABSOLUTELY NO DEBT!
                    My income was pretty static throughout the 42-month (old law) plan, but I was managing to save fully a third of it by the end.
                    • Be proactive with your attorney in fleshing out your spending plan. Insist that he try to get the highest dollar totals in there as possible on every line. Don't overlook anything. You're ALLOWED to budget in entertainment costs, for example. Do it! It's no fun never having a discretionary penny (I did that for years pre-Chapter 13). What a sense of achievement, then, to have enough discretionary income that I didn't use all of it!
                    • PAY EVERY BILL ON TIME!
                    • If you don't know where the money is coming from to pay for something, don't buy it.
                    • If you don't know exactly what you are going to do with an item, why you need it, and/or where you're going to put it -- DON'T BUY IT.
                    • Store brands are generally made by the same folks as the branded labels, but without the marketing costs behind them, so buy them a lot cheaper and save money.
                    • Spend the first three months of your plan spending nothing more than what's required for necessities. Make a game out of -- who can save the most in three months? Put the rest into your emergency fund. Chances are, after that, you'll be able to loosen up and reward yourselves a bit on spending and you'll STILL want to add to that emergency fund. It's a pretty comforting security blanket!
                    • Think back to something memorable that happened to you 5 years ago. Doesn't seem that long ago, does it? Now, go back and read the first line of this post. That's how long till you can be somewhere in the same neighborhood.


                    Epilogue: I'm not debt-free anymore. I closed on my first house ever 55 days after discharge. I AM still putting money in the bank (or the closet safe) every month, though.

                    Comment


                    • #11
                      Originally posted by MommyMc View Post
                      I'm not "deep" into our 13, just 4 months. We have 4 children and were very dependant on credit cards, never even considered a budget.... (so thus reason we are where we are.) I was scared to death to do this, what? live without credit? I just didn't see it working. But we had no other options...
                      So here we are, 4 months later, and it's the best thing we have ever done!! I sleep at night! All my bills are paid when they are due and groceries are in the pantry. I'm able to buy birthday presents when the kids get invited to parties and the Easter Bunny was able to fill their baskets. All of it is PLANNED out...aka... BUDGET!!! I'm doing so well with it. I keep a binder with all my bills and upcoming expenses. I clip coupons.... amazing how they work, went into the grocery store, got $80 worth of groceries, after swiping my store card and double/triple coupons it came to $32! Yahoo!! I love saving money now. My advice is to be aware of where all your money is going. Know what bills you have and when they are due.
                      Our kids are use to eating out....well no more! But when we do eat out they understand it's a special treat. Each payday I buy a $10 gift card to one of our favorite places. That way when we do decide to eat out the entire bill or most of it is already paid for and it didn't really hurt our pocket book.
                      I also put $20 in the savings account each pay day. With 4 kids we have plenty of medical copays to pay for, so when flu season hits I want to be ready!
                      This is the best thing to happen to us.... I will never use another credit card!
                      Good luck to you... this is very do-able if you are willing to do it.
                      What an inspiring post! I am approaching Ch13 and dreading it. I'm a one income household and afraid I can't survive on it in Ch13.

                      Tell me how do you learn to save that much on clipping coupons???

                      Comment


                      • #12
                        I too love this thread!! I've been dreading it too. I'm so afraid to have someone have all the control over my money. Before reading this, I felt like we would never be able to buy anything. I'll be checking back on this one often.
                        Filed August 09, all payments made as of July 12th, 2013.....Waiting on final audit and discharge!

                        Comment


                        • #13
                          Originally posted by DUMBAGAIN View Post
                          ...I'm so afraid to have someone have all the control over my money...
                          The ONLY time I EVER heard from my trustee was very late in the game, when I emailed him about discharge/closing time line and procedures, and he responded by email.
                          But, I didn't ask for credit permission. I didn't ask for a plan change. I paid the payment twice a month (via payroll deduction), and lived on the budget determined. YOU have control. Another name for it is self-control.

                          Comment


                          • #14
                            Go see a consumer protection attorney instead of a BK attorney. That way you won't be tied to a monthly plan that you can't live up to. I've been there (in13), yea, you'll be alive but you won't be living!

                            Comment


                            • #15
                              Originally posted by TLK View Post
                              Go see a consumer protection attorney instead of a BK attorney. That way you won't be tied to a monthly plan that you can't live up to. I've been there (in13), yea, you'll be alive but you won't be living!
                              TLK,
                              Sorry but what do you mean see a consumer protection attorney? Please please tell me there is a better way than Chapter 13. Thanks.

                              Comment

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