Chapter 13 budget ?'s

[Intoodeep201]

I have been reading on here about different subjects but still have a few questions about a chapter 13 budget.

My situation, I was doing fine with bills up until about 3 years ago. I had debt but was paying everything on time and had low interest rates on everything (7.9% on CC's). Early 2008 I was in a motorcycle accident where I was rear-ended by a minivan and broke my back. I am fine but his insurance refused to pay the medical bills so I had to sue him. While the suit was being settled ALL of my credit cards used the medical bills that went to collections as the reason to raise my interest rates to 30% or more on all of my cards (this happened in late 2009). I couldn't make the payments any more. That combined with my hours at work being cut back and my wifes job doing the same we simply can't make any head way.

I just don't understand how they set up the budget. Neither my wifes hours or my own are "guaranteed", if it rains I loose money. Also my job is not guaranteed-only going till 2012 if it doesn't end sooner. And I might be on unemployment of a while. Also job related is the fact that I drive 160+ miles a day to and from work and if gas keeps increasing I will make a big impact on our budget.

How can we budget for all of this? Also do they leave any money for Christmas presents? How do they decide what to allot for food? Clothing? Gas Money? Electric bill (its not always the same amount)? I guess all the things that are a necessity that have a variable cost.

Any input you can offer will be helpful.

Thanks

[newbie2]

With variable income you would average it out over the past 6 months. For variable expenses (utilities, gas, etc) take your totals for the year and divide by 12 to get the average. Yes, you can have a listed expense of "gifts" for a nominal amount.

The best way to budget is to tuck aside money in the months that your expenses are not so high and have that money for the months when they are higher. (For example, you will have money budgeted for car expenses - repairs, and if you don't use any that month, keep it put aside for the times when you need auto repairs or tires.)

Other expenses like food and such is a set expense based upon your family size and county that you reside in. You can do a search for your county + bk allowable expenses to get a good idea. Your auto expenses are also fixed (operating costs such as gas, repairs, etc) but since you drive so much for work you probably can show you need a higher allowance. Save all gas receipts so that you can show your attorney and trustee that you need a higher allowance.

One other note: If your income decreases greatly while in your plan you can have it amended. Always talk to your attorney throughout your plan when income increases or decreases.

[Flamingo]

Realize that your Chapter 13 plan is based on your financial situation at the time you file...not this time next year. Go over all your fears with your attorney prior to your filing. A good attorney will ensure you will have a successful plan and a trustee will not confirm a Plan if he/she thinks it will not work and you will not be able to make the payments. Do note one thing - if you lose your job during a Chapter 13, that does not mean you don't have to make your plan payments - anytime there is a fluctuation of income during your Plan, or a reduction in hours, job loss, raises, bonuses, etc., contact your attorney right away. A Chapter 13 forces one to learn how to budget and you will learn financial budgeting tools that hopefully you will carry on for many years after your discharge.

[momofthree]

Are you sure you don't qualify for a ch.7? Try taking the means test here: http://www.legalconsumer.com/bankrup...test/index.php

[Intoodeep201]

I understand that it is structured on my current income. Just worried if they set it up and my job is completed early and have trouble paying. Also was curious if they factor in an allowance for savings account?

Also, my daughter has a savings account and since she is a minor we had to be listed on the account. Will they try to take this money? Its not ours- its her gift money for birthdays and christmas and such?

If I receive a raise after we file will the amount we pay change if my income increases after the fact?

Sorry for all the questions but this is all new to me and I want to know what I am getting into before paying an attorney to give me a consult.

Thanks

[Intoodeep201]

I am rather sure I wont qualify for ch7. I wouldn't want too anyway. One of my vehicles is paid for and would be sold due to its value. House payment is current. All utilities are current. Just the credit cards I am having a hard time with now that the interest rates are so high. I tried the debt settlement route but all I am doing there is paying that company and they are not doing anything but keeping my money.

[lolly78]

You should be able to find some attorneys who offer a free consult. Compare and contrast several attorneys before making a decision to go with one. I didn't do that and now I regret it.

[IamOld]

You should be able to find some attorneys who offer a free consult. Compare and contrast several attorneys before making a decision to go with one. I didn't do that and now I regret it.

llolly78- how did your 341 go? I'm likely looking at 13 and like to be as prepared as I can be...what docs were you asked for? And, after the 341, what do you need to watch for?
And most importantly - LOTS AND LOTS OF GOOD LUCK AND BEST WISHES!!!!!!

[lolly78]

Hi IamOld, not so great IMO. I did post about it in the 341 forum. The attorney should provide all the paperwork you give him to the trustee. Mine didn't provide some info to the trustee such as the value on my house and cars, nor did he submit the four years of tax returns I gave him. I would have brought copies of EVERYTHING had I known he hadn't submitted them.

I just had to bring our most recent check stubs, SS Card and ID. My attorney was ill-prepared and asked the trustee if he needed to file a motion for the lien strip. I would think that this was something he should have known. All the meetings were private, no one heard about my case and I wasn't able to hear any details of anyone else's case, which is different from some of the other 341's I've read about here. I was thankful about this part though. I saw someone I went to school with at the 341, which was a bit embarrassing, so I just pretended I didn't see them! LOL!

[IamOld]

Hi IamOld, not so great IMO. I did post about it in the 341 forum. The attorney should provide all the paperwork you give him to the trustee. Mine didn't provide some info to the trustee such as the value on my house and cars, nor did he submit the four years of tax returns I gave him. I would have brought copies of EVERYTHING had I known he hadn't submitted them.

I just had to bring our most recent check stubs, SS Card and ID. My attorney was ill-prepared and asked the trustee if he needed to file a motion for the lien strip. I would think that this was something he should have known. All the meetings were private, no one heard about my case and I wasn't able to hear any details of anyone else's case, which is different from some of the other 341's I've read about here. I was thankful about this part though. I saw someone I went to school with at the 341, which was a bit embarrassing, so I just pretended I didn't see them! LOL!

THANK YOU lolly78- hopefully the Trustee doesn't hold atty inexperience against you - I think my atty knows what he's doing (I hope) - just there's no communication between appointments. THANK YOU AGAIN, and all the best wishes to you!!!

[lolly78]

NP, same to you!!!

[jetsfan2010]

Explain all your fears(which are valid) and make sure whoever you select as your attorney you truly trust. You have to be confident in the person handling one of the more important financial transactions you will do in your life.