Chapter 13 DOs and DONTs!!!

[catleg]

Yes but I wouldn't finance the second car for the whole $992.
In my case it was easy, I bought 2 cars with 6 year financing about a year before we filed. Simple that way.
What I'm wondering about is whether this gives me optionality in case I crash either car or one of them turns out to be a lemon, can I just give the keys back to them and tell them to go pound sand for the rest of the loan?
I'm curious what would happen then.

[kolCh13]

Back to the OP's questions, my answers are based on my own experiences.

1. Yes, replace the cars, but as SMinGA said, be reasonable. Don't go buy a Mercedes with an $800 per month payment. Try to finance as little as possible and definitely keep your car payments at or below the IRS standard for a 2-car household.

2. There's nothing that says you can't take a vacation for the next 5 years, you just have to save like a maniac and plan and budget. But I agree with the poster who asked how you are going to pay for it if you take one now. DO NOT rack up your existing credit cards on a lavish vacation and then file for BK a few months later. You will get raked over the coals.

3. Yes, if you know you are going to file, stop paying on your credit cards (I won't advise on the mortgage, I don't have one so no experience there). Use the money for new appliances if you must, but honestly, I would save it. Start a mattress fund. That is what my atty advised me to do (of course, you should do whatever your atty advises). There were 5 months between my initial consult with my atty and the day I filed. I stopped paying on everything during that time and used some of the money to pay atty fees and socked the rest away in a fireproof safe I bought at WalMart. It's my emergency fund and I don't touch it, only add to it whenever I can. Personally, I wouldn't buy any new appliances until the old ones actually die. Who knows, they may have more life left in them than you think. And if not, then you'll have an emergency fund when they do die so it'll be no biggie.

4. See #3 above.

5. This is totally up to you. Once you stop paying, you will receive nonstop calls from creditors. One way to get them off your back, if only temporarily, is to tell them you are filing for BK and give them your atty's name and number. You don't have to tell them when you are filing. It may hold off a few from filing lawsuits as well, giving you more time to plan and save. So it's your call.

Hi Lissy,

what do you mean by "keep your car payments at or below the IRS standard for a 2-car household."? If I have 1 car paid off and want to buy another since we both work, can we get the IRS standard which is $992 (in my county) for 2-car household?

Thanks for your help!

[kolCh13]

Thank you all very much for your great responses. I gained so much knowledge from this forum that I cannot even imagine get it from 20 Attorneys.

Thanks again!!!

[Lissy]

Back to the OP's questions, my answers are based on my own experiences.

1. Yes, replace the cars, but as SMinGA said, be reasonable. Don't go buy a Mercedes with an $800 per month payment. Try to finance as little as possible and definitely keep your car payments at or below the IRS standard for a 2-car household.

2. There's nothing that says you can't take a vacation for the next 5 years, you just have to save like a maniac and plan and budget. But I agree with the poster who asked how you are going to pay for it if you take one now. DO NOT rack up your existing credit cards on a lavish vacation and then file for BK a few months later. You will get raked over the coals.

3. Yes, if you know you are going to file, stop paying on your credit cards (I won't advise on the mortgage, I don't have one so no experience there). Use the money for new appliances if you must, but honestly, I would save it. Start a mattress fund. That is what my atty advised me to do (of course, you should do whatever your atty advises). There were 5 months between my initial consult with my atty and the day I filed. I stopped paying on everything during that time and used some of the money to pay atty fees and socked the rest away in a fireproof safe I bought at WalMart. It's my emergency fund and I don't touch it, only add to it whenever I can. Personally, I wouldn't buy any new appliances until the old ones actually die. Who knows, they may have more life left in them than you think. And if not, then you'll have an emergency fund when they do die so it'll be no biggie.

4. See #3 above.

5. This is totally up to you. Once you stop paying, you will receive nonstop calls from creditors. One way to get them off your back, if only temporarily, is to tell them you are filing for BK and give them your atty's name and number. You don't have to tell them when you are filing. It may hold off a few from filing lawsuits as well, giving you more time to plan and save. So it's your call.

[SMinGA]

Taxes are a priority debt, and can be repaid in a ch. 13.

We owe18,000 in back taxes, and are paying 500 a month towards them. Do they ever reduce them or can they be put in 13 payment?

[newbie2]

Daglo, at the bottom of the main screen on the left is a button called "new thread". That is how you start a new thread.

[daglo]

1.Yes replace cars with sensible used cars.
2. Heard of a staycation?
3. Yes when you're sure you're going under stop all credit card and mortgages. Mortgage arrears will be 'cured' in the plan.
4. Yes save whatever you can.
5. No hurry. Research,research,research.

Convert cash to exempt assets or pay down student loans, but not taxes or secured loans.
May want to take 401k loans for strategic purposes (home repairs, pay student loans).

We owe18,000 in back taxes, and are paying 500 a month towards them. Do they ever reduce them or can they be put in 13 payment?

[daglo]

Daglo, its usually best to start your own thread...

If you can't afford the 13 payment, then one of 2 situations exists... Either you need to work on your expenses - either to cut back in some areas or to communicate your expenses better with your attorney. Your plan payment is your DMI, so if your attorney does not have all of your expenses he is coming up with a DMI that is not accurate for you.

If that is not the issue, then you may be trying to save a home that you truly cannot afford. I'm assuming you are behind on your home? Mortgage arrears does become a priority debt but it must be paid in full in your plan. As well as attorney fees (if your atty does not require payment in full in advance) and trustee fees. Plus any other priority debts. If arrears is your only priority debt, and you pay your atty in advance, then take your mortgage arrears and divide by 60 as that is the max plan length. Then take that amount and divide by .9 to account for the trustee fee. That is the minimum plan payment to resolve your mortgage arrears, and if you can't make it AND your regular mortgage payment along with utilities, groceries, transportation, etc. then ch. 13 is not an option to save your home. Unless you can cut other expenses or increase your income.

Our mortgage is current, as are the car loans. How do you start your own thread? I looked but cannot figure out how, only how to reply.

[catleg]

Filing ch13 pro se is really a false economy, since you can roll legal fees into the plan; essentially, unsecured creditors pay for your lawyer. You have to front some of the cost such as the filing fee.

[SMinGA]

I think you may want to consider filing a motion for voluntary dismissal - and then refiling with an attorney.

Before filing, did you consult attorneys to find out about the income/household questions? My understanding is that other household members income gets counted as far as it goes to household expenses. So the VA & unemployment that helps with rent/mortgage, utiltities, groceries: counts in your plan. Their income used for their own debts, entertainment, etc. does not.

Filing ch. 13 without an attorney is not likely to go well. Even of those cases filed with an attorney, only a small % make it to plan completion.

I did my own Chapter 13. My court hearing is June 9. I am worried I did not do the repayment plan correct. My spouse gets 400.00 dollars VA disability income monthly. The book advised the money is exempt so I listed the income under property but did not include in the debt repayment plan as income. I was reading the BK book last night and it says to list on the forms and may be included as disposable income. Should I amend the forms and take them to the court? Also my daughter 24, her son who is 4, and my 20 year old son live with me. They are not working... I am supporting them. They receive unemployment and its very little. They are part of my household so can I claim them as members? Will it be to my benefit

[Jmgonzales]

Need advise

I did my own Chapter 13. My court hearing is June 9. I am worried I did not do the repayment plan correct. My spouse gets 400.00 dollars VA disability income monthly. The book advised the money is exempt so I listed the income under property but did not include in the debt repayment plan as income. I was reading the BK book last night and it says to list on the forms and may be included as disposable income. Should I amend the forms and take them to the court? Also my daughter 24, her son who is 4, and my 20 year old son live with me. They are not working... I am supporting them. They receive unemployment and its very little. They are part of my household so can I claim them as members? Will it be to my benefit

[forgotten]

I'm personally all for taking a vacation whenever you can. Obviously it shouldn't be somethinge expensive. Even in my 13 I am taking 2 vacations away from home a year. I'm actually splurging and driving to florida next week, nothing compaired to the vacations we took on credit... but still.

I feel its important to enjoy yourself and have time with your family any way you can. Everyone says you can wait and go on vacation in 5 years, but what if you don't make it 5 years?

My view is weighted by the fact that my life expectancy is shorter than my chapter 13 plan, but its still something to think about.

[catleg]

1.Yes replace cars with sensible used cars.
2. Heard of a staycation?
3. Yes when you're sure you're going under stop all credit card and mortgages. Mortgage arrears will be 'cured' in the plan.
4. Yes save whatever you can.
5. No hurry. Research,research,research.

Convert cash to exempt assets or pay down student loans, but not taxes or secured loans.
May want to take 401k loans for strategic purposes (home repairs, pay student loans).

[SMinGA]

Daglo, its usually best to start your own thread...

If you can't afford the 13 payment, then one of 2 situations exists... Either you need to work on your expenses - either to cut back in some areas or to communicate your expenses better with your attorney. Your plan payment is your DMI, so if your attorney does not have all of your expenses he is coming up with a DMI that is not accurate for you.

If that is not the issue, then you may be trying to save a home that you truly cannot afford. I'm assuming you are behind on your home? Mortgage arrears does become a priority debt but it must be paid in full in your plan. As well as attorney fees (if your atty does not require payment in full in advance) and trustee fees. Plus any other priority debts. If arrears is your only priority debt, and you pay your atty in advance, then take your mortgage arrears and divide by 60 as that is the max plan length. Then take that amount and divide by .9 to account for the trustee fee. That is the minimum plan payment to resolve your mortgage arrears, and if you can't make it AND your regular mortgage payment along with utilities, groceries, transportation, etc. then ch. 13 is not an option to save your home. Unless you can cut other expenses or increase your income.

I got my first judgement against me. I am sick to my stomach. I asked Chase to please work with me after our income loss (my husband took a cut in pay and I lost my job) They refused. They hired a law firm (low-life debt collector) and I tried to give them what I could afford each month, but they refused, wanting more. They were verbally abusive to me, questioning me on how I got in this situation. So, now they want me to appear in court. I have 28 days from today. We want to keep our home, and cannot afford the payment that an attorney told us we would have to pay in a 13. She said we make too much for a 7. Our house payment isn't half of our take-home, so I guess that is good. Anyone have any suggestions? Must we file or can we try to work out something with Chase's lawyers in court?

[daglo]

I got my first judgement against me. I am sick to my stomach. I asked Chase to please work with me after our income loss (my husband took a cut in pay and I lost my job) They refused. They hired a law firm (low-life debt collector) and I tried to give them what I could afford each month, but they refused, wanting more. They were verbally abusive to me, questioning me on how I got in this situation. So, now they want me to appear in court. I have 28 days from today. We want to keep our home, and cannot afford the payment that an attorney told us we would have to pay in a 13. She said we make too much for a 7. Our house payment isn't half of our take-home, so I guess that is good. Anyone have any suggestions? Must we file or can we try to work out something with Chase's lawyers in court?