Help from family

[minan]

What happens if you're in a 13 and family members want to help you with basic necessities such as providing a $50-100 towards necessities?

Will I get in trouble with the trustee?

My brother wants to help me each month so I don't use up all my savings.

[Dougie011]

If he gives you cash, the trustee would never know. I don't know if you could get in trouble if he/she found out,but someone smarter then me should be able to say for sure.

[justbroke]

If they are small "gifts" the Trustee isn't interested. However, if they are giving you regular amounts that are at intervals (monthly, weekly, quarterly) and that are significant (10% of your wages or more)... this could be construed as "regular" income.

However, most won't care that family is helping. However, have them help indirectly. In other words, have the family member purchase you groceries. Never accept cash from them. That will make it more palatable.

What strikes me though is that you're in a Chapter 13 and you imply that you're dipping into savings each month. If that's the case, you need to sit down with your attorney and re-evaluate your plan and payments. A well-planned Chapter 13 shouldn't be punitive. You should be able to actually save money. However, if you refuse to or can't budget... failure is your destiny.

[minan]

Brother thinking about paying for some of my utilities. I have him a list of expenses I have (not the mortgage/HOA, bk payment), but basic living expenses.

So is this ok?

I'm trying to look for a second, cash-only, type of job so I don't have to dig into my savings each month.

He hasn't said he's doing it, but I want to make sure I don't do anything to hurt my case. Just filed yesterday.

[Dougie011]

If they are small "gifts" the Trustee isn't interested. However, if they are giving you regular amounts that are at intervals (monthly, weekly, quarterly) and that are significant (10% of your wages or more)... this could be construed as "regular" income.

However, most won't care that family is helping. However, have them help indirectly. In other words, have the family member purchase you groceries. Never accept cash from them. That will make it more palatable.

What strikes me though is that you're in a Chapter 13 and you imply that you're dipping into savings each month. If that's the case, you need to sit down with your attorney and re-evaluate your plan and payments. A well-planned Chapter 13 shouldn't be punitive. You should be able to actually save money. However, if you refuse to or can't budget... failure is your destiny.

I dont understand why he shouldn't take cash from family members, if its cash how would there be a problem. I guess there is a lot for me to learn.

[LadyInTheRed]

Brother thinking about paying for some of my utilities. I have him a list of expenses I have (not the mortgage/HOA, bk payment), but basic living expenses.

So is this ok?

I'm trying to look for a second, cash-only, type of job so I don't have to dig into my savings each month.

He hasn't said he's doing it, but I want to make sure I don't do anything to hurt my case. Just filed yesterday.

If he's going to pay your expenses, I'd at least have him wait until after you are confirmed. If the trustee sees somebody else is paying your expenses, it will be considered a contribution to your household which will increase your DMI and your plan payment.

As was already said, if you have to dip into savings to pay expenses, either your plan payment is too high or you are not willing to make the spending changes that will be necessary to successfully complete your plan. You need to act now to fix either of these problems.

[minan]

Ladyinthered: This is what I'm confused about. I've sent questions to my lawyer because I don't understand how I can be short about $600 a month.

I'm also going through the expenses and seeing where I can reduce. For example, I found out that my phone plan can be reduced to about 10-13 from the 35-40/mo I'm paying on now. I've also started to look at ways to reduce my electric bill (stop using AC, etc..) and checking into getting on a level pay plan. I'm looking at reducing the cable bill by getting rid of the extra channels etc..netflix is cheaper so I'm considering keeping only basic at 15/mo.

I will get rid of my cell phone since the new company I start with on 8/9 will be giving me a new one.

So I'm trying.

[LadyInTheRed]

Ladyinthered: This is what I'm confused about. I've sent questions to my lawyer because I don't understand how I can be short about $600 a month.

I'm also going through the expenses and seeing where I can reduce. For example, I found out that my phone plan can be reduced to about 10-13 from the 35-40/mo I'm paying on now. I've also started to look at ways to reduce my electric bill (stop using AC, etc..) and checking into getting on a level pay plan. I'm looking at reducing the cable bill by getting rid of the extra channels etc..netflix is cheaper so I'm considering keeping only basic at 15/mo.

I will get rid of my cell phone since the new company I start with on 8/9 will be giving me a new one.

So I'm trying.

I just read your post form last night. You definitely need to figure out why your attorney has you paying 19% to unsecured creditors if your budget is so tight. If the answer is that the trustee will not allow less without a fight, I hope your attorney is willing to fight.

ETA: You need to go carefully through your schedule J and make sure all of your necessary expenses are included. If things are missing, it's easy to amend.

[minan]

Justbroke: I am exactly of the same mindset as you that this plan should allow me to save. It's not. I've sent my atty emails today asking her questions because I still don't understand why I am going to be short each month.

She put the back taxes (127K), student loan (122K), car payment (25K), unsecured (48K) into the plan. Only the mortgage is outside the plan.

My major reason for doing the 13 was to deal with the IRS/State taxes because IRS had issued levies.

I already know that I'll have to pay back student loans, but I was hoping they could get put into forbearance now. The atty states they won't start getting paid until month 48. She sees this as a reprieve for me.

So on the 22C, she has my DMI at 567 and stated that this number times 60 is what the court expects the unsecured to get paid back. I think one of the numbers on this might be incorrect and I've already sent an email to her asking for clarification. If the number is incorrect, the DMI would go down to about 275.

I can't afford to find another lawyer and go through all this again. I paid her in full and I'm filed already. I do like her and she is very knowledgeable.

Any advice from everyone would be great. Maybe you could point out questions for me to ask her - that I'm missing.

By the way I'm in the southern district of california.

[justbroke]

If you have $127K ($127,000.00) in back taxes, that's a "priority" unsecured debt that must be paid 100%. I'd say you're in a really bad Plan. I'm sure someone will chime in who is better with taxes, but an Offer In Comprise or something needed to be done. If you really have $127K in back taxes in a 60 month plan, that's $2,000/month just for the back taxes. Ouch.

Maybe you should have talked to a tax attorney before you talked to a bankruptcy attorney. If that amount is accurate, you have serious tax debt and the Chapter 13 is not helping you.

[minan]

If you have $127K ($127,000.00) in back taxes, that's a "priority" unsecured debt that must be paid 100%. I'd say you're in a really bad Plan. I'm sure someone will chime in who is better with taxes, but an Offer In Comprise or something needed to be done. If you really have $127K in back taxes in a 60 month plan, that's $2,000/month just for the back taxes. Ouch.

I am no longer self-employed (which is the income used for the means test), however projected income from my new job was used for the other part. That's confusing.

Here's what I can afford in a plan based on what I'm going to make on new job starting in one week:

approx 1750 for mortgage (out of plan) and the HOA
approx 360 for car payment (outside the plan)
approx 500 or a bit less for food/utilities/necessities
approx 2000-2500 payment to chapter 13
student loan can be put in forbearance - yes I know interest accrues, but I've got to get the IRS off my back. I'm willing to incur the interest. I can make a higher payment on the student loans once I'm out of the 13.

All this would keep my savings intact for emergencies. This would pay off the taxes with 0 to unsecured. I can resume student loan at the end of the 13. I'm willing to do this. Is there anyway to convince the atty?

Instead the current plan is:

1750 for mortgage (outside the plan)
The rest (taxes/car/student loan) in the plan with a payment over 3300.

That's where I'm confused. This leaves me with nothing for food/utilities/basic necessities. I've sent an email to the atty to meet next week so I can understand what's going on. I can't afford another attorney. I've already spent 6000k for all the lawyers.

Maybe you should have talked to a tax attorney before you talked to a bankruptcy attorney. If that amount is accurate, you have serious tax debt and the Chapter 13 is not helping you.

I did have a tax attorney. She didn't do anything (never get an atty from a tv ad - expensive lesson learned) and the IRS filed a levy on account and took all the money in it. I had to borrow to hire another tax attorney who tried to negotiate something. However I could not do an Offer in Compromise because you basically have to be below poverty level to be even considered. I make a decent money. The IRS filed a second levy in July. I do not have any other choice but 13 so I could get some protection.

If I don't do something, I could lose my job and clearance, then I lose my home with no where to go. I could probably do a 7, however the IRS/student loans will still be after me. Or continue cashing all paychecks so the IRS doesn't find the money, have all the cc's after me, 20-30 phones calls a day. I can't live like this anymore. It's too stressful and affecting my job now.

It sucks overall, I've been crying for the last 2 days, I can't sleep, haven't eaten, however what other choice do I have?

[justbroke]

I understand now. Yes it is not a good place to be in. The only way I see that you need to pay 19% to unsecured creditors, is because you are keeping some property that you didn't want to surrender and/or had no exemptions for?

You have your expenses above. Go back through them and put them on Schedule J and/or Form B22C. Figure out what's wrong. Ask your attorney to explain this to you, as to why you're paying 19% and you don't have any money each month to even buy food. This is important. I don't want you to fail.

[minan]

I understand now. Yes it is not a good place to be in. The only way I see that you need to pay 19% to unsecured creditors, is because you are keeping some property that you didn't want to surrender and/or had no exemptions for?

She put the car payment in the plan. I had a lease which was ending so in my pre-planning for bk, I bought a more reliable, less payment car so there is the secured debt. Is there a way to exempt the car even if I owe on it? I just got it recently.

You have your expenses above. Go back through them and put them on Schedule J and/or Form B22C. Figure out what's wrong. Ask your attorney to explain this to you, as to why you're paying 19% and you don't have any money each month to even buy food. This is important. I don't want you to fail.

I put every expense I had on the schedules. I spent most of yesterday calling the utilities/cable etc...to either turn things off or get on lower payments. I've already reduced my recreation, food, clothing, and pet expense numbers.

I sent an email to the atty asking to meet next week because I don't understand why the payment is so high.

[Pandora]

I dont know about your trustee and/or attorney but ours would NOT allow "future earnings" to come into play - it had to be actual, and paystubs were required for a minimum of 2 months in order to do the plan and schedules accurately. It may just be that your 341 will be continued (highly likely) until you get 2 months worth of stubs so accurate accounting can be done. It may also be that the trustee at your 341 sees that your plan is not feasible and will recommend a Ch. 7. Hubby had a "projected salary" that we did the original schedules on due to the fact his new job hadnt started yet, however....Trustee stated that wouldnt do - and 341 was continued with updated schedules having to be submitted after actual paystubs were provided.

Any way you can dump the car? Know you just bought it - but you could use some of that $360 a month towards other areas for yourself. Buy a used car thats reliable for now if possible - if your family is willing to offer assistance maybe they can help you with a used car purchase, perhaps that'd be the best route to go ?? But again, that also depends on what your allowances are at currently.

Before you go and lower your utilities and whatnot - WAIT until you see if you get confirmed as the trustee may require documention to all utilities. Its rare to happen, but..its been known to happen . Same for a 2nd job - wait - and ask your lawyer "what ifs" as to if you get a 2nd job - will the trustee take the $ - because you need to know if you are at the allowable amounts already.

What a pickle Sending you some positive thoughts - take some deep breaths.

[minan]

I dont know about your trustee and/or attorney but ours would NOT allow "future earnings" to come into play - it had to be actual, and paystubs were required for a minimum of 2 months in order to do the plan and schedules accurately. It may just be that your 341 will be continued (highly likely) until you get 2 months worth of stubs so accurate accounting can be done. It may also be that the trustee at your 341 sees that your plan is not feasible and will recommend a Ch. 7. Hubby had a "projected salary" that we did the original schedules on due to the fact his new job hadnt started yet, however....Trustee stated that wouldnt do - and 341 was continued with updated schedules having to be submitted after actual paystubs were provided.

Attorney already stated that I'd have to give her the new pay stub as soon as I got it so we can review everything.

Any way you can dump the car? Know you just bought it - but you could use some of that $360 a month towards other areas for yourself. Buy a used car thats reliable for now if possible - if your family is willing to offer assistance maybe they can help you with a used car purchase, perhaps that'd be the best route to go ?? But again, that also depends on what your allowances are at currently..

The IRS allowance is 496.00 for car ownership so this is under that. I can't imagine who'd give me a car now that I've filed. The interest rate on the car above was 5.3% and I'm current.

Before you go and lower your utilities and whatnot - WAIT until you see if you get confirmed as the trustee may require documention to all utilities. Its rare to happen, but..its been known to happen . Same for a 2nd job - wait - and ask your lawyer "what ifs" as to if you get a 2nd job - will the trustee take the $ - because you need to know if you are at the allowable amounts already.

Ok thanks for this advice. I'll wait. Don't want to do anything that will increase the payment even further up.

What a pickle Sending you some positive thoughts - take some deep breaths.[/QUOTE]

I think the only positive I see right now with filing is that I'm now under protection and the IRS can't do anything further until this is case is resolved one way or the other. Finally the now 30-35 phone calls a day will stop. It's 7:50AM here in So California and I am waiting for the phone to start ringing exactly at 8:00AM as it has for the last month every day.