Question for MOMOFTHREE / Advice?

[andysmom]

Thanks so much again sminga!
That's what my lawyer said too.... he actually told me to try and stay off the internet (which is impossible for someone with anxiety issues) because it was making me sick and that there's really nothing to get all worked up over. He actually basically said the same thing as you, that I don't know their situations, what's included, their incomes & local trustees policies, etc. He said not to worry and that if I had anything to worry about he would certainly tell me.

Like i said earlier & really hope anyone who's remotely considering bk to take a true look at your picture and not fool yourself into thinking you can do it on your own if you can't----- that;s what we did and it ended us up here almost 2 years later with more than double the debt we did have looking back when we started really really struggling & back then we would have easily qualified for a chapter 7 with alot less debt now and minus the 2 years of contast stress and worriment.

I can't wait to put this behind us and start over - even if it is 5 years later

[SMinGA]

That is the important part.

Start the 'later' now. Mentally let go of the past, knowing they (debts) can't hurt you now. I know you're still in the agonizing part of it, but hold on to the knowledge that you're almost to the finish line. (Filing.) But in reality, that is the start of the rest of your life!

I can't wait to put this behind us and start over - even if it is 5 years later

[momofthree]

Thanks momofthree.
the atty claims he spoke w/the trustee's lawyer and said sounds okay but whos knows?
Our cars are old (2001 &1998 -husband's work truck) both in good condition but I doubt anyone would finance us with how much we owe out & per atty's advice we stopped paying all cc's so we're aout 30days, maybe 45 days late on everything- except house.
Atty did explain how he came to that figure for the budget but I'm so confused right now, I don't remember. We didn't fill out paperwork other than 1 sheet that I had to put in our mortage,taxes,insurances,utilitites,transportation ,food,etc.
He said since we're above the median they use irs standards for food & things like that- said absoltuley won't be questioned. No daycareschool expense cause I'm home with my son. Didn't count the 401k contributions. Said he used only the necesseties basically and nothing was even included for entertainment, misc, etc. Transportation he told me how much he put down but I forget- he said he was a set amount (i guess for our district) I didn't add anything in that we weren't paying; Our utilities are kind of high (heat) because we have an old house (115 years+) but not out of line with anyone else's in our area and he said no one will blink an eye at it & I do have my bills from the previous 2 years. (averaged between summer & winter months to maybe $225 month or so- about $400 in winter and very cheap in summer).
I don't even have a cell phone to include. My husband's in paid for by work. The only thing that could be questioned he said was the telecommunications - $75/mo for home phone & cable. We didn't even include internet.
He said if it wasn't for the 401k loan we'd be a little over $200/mo payback (if I recall correctly) plus fees. Still much better than the credit card minimums of $2600/mo.

If it sounds lke I should be worried, how worried do you all think I should be?

Thanks in advance to everyone

Like SMinGA said, you can't look at other people's payments, their mortgage & car payment may be included in it, or they could have an income of $200k, ya know?

The reason I asked about what your attny put down for transportation is because some districts allow all of the vehicle ownership expenses on their means tests regardless of whether you have a car payment or not, and some will only allow you the ownership expenses if you have a car payment.

IF your attorney is already including ownership expenses on your budget for 2 cars, then that is ($489 x 2) $978/mo and the operation expenses $422 (this is for west coast, don't know where you are). Then you are budgeting $1400 a month for transportation expenses and can afford to add in a car payment fairly easily. If this is the case, I'd strongly advise you to get a new(er) car before filing. Your newest car will be 14 years old by the time you complete your ch.13. I can almost guarantee it will need some pricey repairs before your case is closed.

However, if you're in a district where you can only include the car ownership costs if you have a car payment, then you may not have wiggle room in your budget for a car payment, which would make me nervous were I in your shoes.

[momofthree]

Oh, and as far as financing goes: with only being 1 month past due on your credit cards, they're probably not even reporting as late yet. Mine didn't report as 30 days late until I was 2-3 months behind.

Also, pretty much anyone can finance a car these days...you just pay a higher interest rate. BUT, I believe (don't have experience in this myself, you may need to research this) you can lower your car's interest rate to the current "till rate" when you file bk, so if that's the case (again, look into it, don't take my word for it, I have zero experience with this), interest rate doesn't matter much.

[BKchapter13]

I dont get it?? we paid our secured debt and this debt was a priorty in chp13bk, so thats paid, we are paying now on our unsecured debt at 100% payback.. I never ever heard of 0% to unsecured debt unless its a chapter 7 liquidation. confused!!!!???

[andysmom]

hi bkchapter13,
we have no secured debt- other than the mortgage which is being paid at 100%. We have no secured debt- no car loans, no home equity loans, no heloc's, no priority debt- no taxes, mortage arrears, student loans, irs, etc.
Under the chapter 13 means test, we have negative disposable monthly income so that is why they are proposing a 0% payback to unsecured. We can not file chapter 7 because we are just barely, by a few hundred dollars, over the median income otherwise we would be a chapter 7.

[LadyInTheRed]

I dont get it?? we paid our secured debt and this debt was a priorty in chp13bk, so thats paid, we are paying now on our unsecured debt at 100% payback.. I never ever heard of 0% to unsecured debt unless its a chapter 7 liquidation. confused!!!!???

It depends on your disposible income. Your disposible income is apparently high enough to pay your secured creditors and still have enough to pay 100% of unsecured debt in 5 years. People who pay 0% to unsecured creditors are only able to pay enough in a 5 year plan to pay secured creditors, if any, attorney fees, filing fees and trustee fees. The only way the OP could come up with enough in her budget to pay the attorney, trustee and filing fees was to use the money that will be freed up in the final months of the plan after 401k loan is paid off. Since the payment is averaged over 5 years, the OP will have to squeeze enough from her budget to pay $50 a month.

As has already been said, each case is different.

[andysmom]

Thanks so much Ladyinthe Red! I get nervous every time I have to explain it, but my attorney assures me this is the correct route and has even spoken to the trustee. If we filed last year we would have qualified for a chapter 7; because of a small bonus we fall through to a chapter 13 but with negative dmi.
As others have stated, I'm sure the last 5 months of the plan the trustee will probably want the full pymt that was going to the 401k, too- and that fine with us.
Thank you again, LadyinTheRed

[LadyInTheRed]

I'm in a similar situation, andysmom. Except I pass the 2nd part of the Chap 7 means test with flying colors, but am filing Chap 13 to strip my 2nd mortgage. I will probably pay 1% or less to my unsecured creditors. My attorney told me that when my 401k loan is paid off after 4 years, I can convert the payment to a contribution. He also told me I can continue my current small contribution to the 401k in addition to the loan. It sounds too good to be true after reading other people's experiences. But, these things vary by district and my attorney has 25 years of experience here. So, I'm going to trust what he says, but still be prepared for the worst.