Budget question

[kornellred]

Ummm...disposable income is what is left to pay creditors with AFTER all of the allowable deductions are made. You have to be able to live and stay healthy in order to pay anything back to your creditors. The trustee is bound by law to extract as much as possible for the creditors. Your attorney proposes a payment plan that you can live with and that minimizes the payments to creditors within the bounds of BK law. Your attorney will do all he/she can to get a confirmation of plan in your favor. At least - that's what mine is doing.
And if you cannot manage the payments after confirmation, you can always convert to Chapter 7 if your circumstances allow.

[lrprn]

The key to surviving in Ch 13 is to retain an excellent Ch 13 bk lawyer. Writing a Ch 13 plan a family can live on for 3-5 years is difficult. Bk lawyers who don't do many Ch 13s often don't know much about what will be accepted and what won't by your Ch 13 trustee so sometimes they file plans that are tighter than they have to be. You want the most experienced Ch 13 lawyer you can find to write your plan. It's much more an art than a science.

[Flamingo]

The key to surviving in Ch 13 is to retain an excellent Ch 13 bk lawyer. Writing a Ch 13 plan a family can live on for 3-5 years is difficult. Bk lawyers who don't do many Ch 13s often don't know much about what will be accepted and what won't by your Ch 13 trustee so sometimes they file plans that are tighter than they have to be. You want the most experienced Ch 13 lawyer you can find to write your plan. It's much more an art than a science.

Amen lrprn! Also, what most people cannot fathom is the lifestyle change that has to go along with a Chapter 13. No one is usually used to living on any sort of budget that goes into a 13; if one cannot turn around their lifestyle to learn to cut back and live on cash only, that Plan will fail. We turned our Chapter 13 into a game; we tried to outdo each other once a week by writing down something we did to cut costs (this included our high school age daughter). You'd be surprised what you can come up with and we carry a lot of those habits to this day.

Also, most people that file a Chapter 13 do so to save their house. I didn't care how I had to struggle or do without; there were times when there was only $10 left in the checking account for several days but we did it. Chapter 13 is a great teacher - you will never want to ever consider getting anywhere near filing bankruptcy again.

[arkienurse]

Chapter 13 is a great teacher - you will never want to ever consider getting anywhere near filing bankruptcy again.

Amen to that one. Never want to be ANYWHERE near that again.

[Frogge]

I agree to the concept of the Ch13 -- I am confused tho as to the allowance (or non-allowance in this case) of necessary expenditures and why stilltheone doesn't have those alotted to her in the plan? With a family of 4 it seems incredible to me that you have 354 left to live on when the IRS standards allow much more for a family your size -?

I don't know which chapter I will end up filing, but I have already started trying to budget to make sure that whatever happens we are no longer accustomed to living to the level we were. Flamingo, you always have good feedback about making these changes. I know enough to realize that this new start is a big deal if we can get that chance. That said, I still hope to be able to buy my kids things from time to time for thier birthdays, etc. and this is with a lot of budgeting.

It seems to be a very difficult road ahead for the OP if this isn't adjusted. JMO, I'm worried about this.

[Flamingo]

I agree to the concept of the Ch13 -- I am confused tho as to the allowance (or non-allowance in this case) of necessary expenditures and why stilltheone doesn't have those alotted to her in the plan? With a family of 4 it seems incredible to me that you have 354 left to live on when the IRS standards allow much more for a family your size -?

I don't know which chapter I will end up filing, but I have already started trying to budget to make sure that whatever happens we are no longer accustomed to living to the level we were. Flamingo, you always have good feedback about making these changes. I know enough to realize that this new start is a big deal if we can get that chance. That said, I still hope to be able to buy my kids things from time to time for thier birthdays, etc. and this is with a lot of budgeting.

It seems to be a very difficult road ahead for the OP if this isn't adjusted. JMO, I'm worried about this.

I went back and reread the OP's posting. It appears things are in the works to change that amount. I agree, $354 per month for a family of 4 is very tight in today's economy and I don't think even shopping all bulk and discount could get a family of 4 through an entire month. I'm sure it can be done with that amount being for food only but the OP mentions that would include diapers, formula, etc. However, if too much cannot be treaked out of it and the OP and his family cannot adjust to shopping at discount and bulk stores for the term of their Plan, they should weigh out if they actually can afford to keep the house in this situation. In some situations, and as was done for us, if you have a lot of equity in your house you can lower your Plan payments during the term of your Plan and refinance at the end of your Plan paying off the entire Plan. We did that but we were able to buy out at year four instead of starting refinancing at month 55. With the economy and housing the way it is now, that may not be an option unless one has a ton of equity in their house going into a 13.

[sahaley]

yikes that seems too tight and doesn't seem fathomable.... ch13 schedules/budgets are done to add up your other expenses as well - food, clothing, recreation, laundry etc - was this done by your atty? The budgets are tight typically but should be manageable on your income - you want to be able to complete your plan successfully and to live within your means but certainly not to suffer. Formula and diapers aren't cheap! Sounds like you need a meeting - best of luck to you.

[Ortgeist]

I filed in August 2007 and felt so uneasy about putting down some of the "national" averages for groceries, gas, etc. A simple change in anything involving your economic welfare can totally mess up your budget. In my situation, my husband and I got our raises, but our medical insurance premium increase and increased costs for gas and groceries totally ate up our raises.
So........ I clip grocery coupons every week, plan out meals in advance that are cheaper, shop on a night when they have $10 off $50 and then split my $120 grocery total between 2 transactions so I can actually get $20 off, started using the envelope system for gas, eating out, and entertainment. I recently went on restaurant.com and was able to purchase a $25 gift certificate to a nice restaurant for $3. Since all you have to spend is $35 we will only spend $30 after all is said and done for a "once in a blue moon" night out without the kids (that is some cheap prime rib for 2 people). I shop for fruits and vegetables at the farmer's market = big savings! Anytime I need clothes, shoes, etc. I look for clearance items and make a game out of it every time. I know it's sad that I play a game called "Let's see how cheap I can pay for all of this stuff" but I enjoy it.
I'm sure there's alot more ways to save but these have been the most helpful for our family. Now if I could only ride my bike to work....

[ccgirl]

We have more left over in ch 13 than we did when we had to pay all of our cc bills.

For some of your food expenses google angel food ministries. I haven't used them yet, but you can get a whole grocery list of food once a month for $30. It is run through churches across the nation. I have heard from others that the food is actually name brand and good. I am going to try it in August.

[stopcallingus]

Well I am updating on my situation.....It appears the $580 was as low as it could go based on the fact that we are paying 0% to unsecured and all it includes is our cars. In the meantime my mortgage company filed a claim on a payment in arrears and tacked on their atty costs for doing so. The claim was filed one day and I made the payment the next. It was barely 30 days late and they accepted the payment by phone. So now according to the trustee my payment must go from $580 to $607 which in turn will leave us with $327 to feed my kids. My atty is filing an objection but doubtful it will go anywhere since they just applied the payment I made to the July payment which would have been due by July 16th. At least now i don't have to make a payment until August 16th. I went ahead and put my daughter on whole milk two months early to try and cut back. Although with the price of milk rising it doesn't help much since we now use 2 gallons a week instead of 1. As far as BK attys go this one specializes in BK and has for 35+ years. He, his wife and daughter all practice law together. I am confident I have the most knowledgeable, experienced atty in my town. In fact I believe he is the only one in our town. Hubby has started to work some extra hours on the weekends to make money for food. This is so hard, as now we have started to have marital problems on top of everything else. I don't know what will happen next...especially if our marriage fails. I certainly can't afford daycare, rent, etc on what I make alone and he can't afford a child support payment. We both know we are stuck at least for the next five years and that puts more stress on us. So sorry to vent like this, I know you all have your own problems to worry about. I just wanted to give an update.

[MOMof3]

Any chance you can give up a car payment? That's what we had to do to make our plan seem more do-able. We turned in a car that was included in our payment & then bought a car with $1500 cash instead. So now we have one nice vehicle & one that isn't great, but gets us from point A to B.

[woeisme]

Sounds like you are trying to save a house and vehicles that you can't afford based on your income if 0% is going to unsecured and you still don't have money for food in your plan. You might have to rethink holding on to all of those secured assets. Are they really more important to maintain than being able to purchase groceries?

[laurannm]

I was thinking the same, but if you give up a car and thus free up the car payment, can't the trustee claim that the money is now disposable income, and thus force the OP to pay it to the unsecures?

[woeisme]

I see your point laurannm, but the OP isn't even able to claim the standard deductions because too much money is required to pay her secured creditors. In that case, giving up assets would free up $, but it wouldn't be disposable becasue in the schedules it could be covered by standard expenses that are necessary for her family.

[stopcallingus]

We thought about giving up a car but one is my husbands truck and was crammed down. The other is our family car and was not crammed down. Both cars are financed thru the same lender and our atty said they would want the one that would sell for more. Hubby's truck has 117,000 miles, a busted windshield, balled tires and needs brakes. I can't drive my family around in it safely. Besides we don't have $1500 for a car even if the lender would go for that. We have a hearing tomorrow on objections filed by creditors and counter objections filed by our atty. I guess we'll see what happens. Him working some weekends for a few extra hundred a month will get us by as long as they don't raise our payment. They said if increase is more than 10%. It is not.