new here & think I screwed up!!

[edward08r]

What a wonderful site! Wish I'd found it a long time ago. My attny was less than forthcoming & I guess I've misunderstood my Chapt 13 requirements. Been paying about 28 months on a 60. I applied & was approved for a couple small credit cards to start rebuilding my credit. Did NOT get approval. Got run over on my motorcycle and accepted the insurance settlement and rebuilt my bike...again did not think I needed approval?
New situation....I am retired & my health insurance is going up over 400 a month next month. Can't afford it, so I've accepted a seasonal job. I thought it would help me pay bills, but this forum seems to indicate I need to report the job and the court will take ALL the extra money??
Am I in trouble for the credit card/cash settlement thing from the past? And, will they really bump me up to a 100% and take ALL the money from this new job ? My Attny has went out of business, and the Attny my case was transferred to wants 150 per hour just to talk to me....so please help with your expertise and opinions, PLEASE!!

[keepmine]

Personally, I think you're OK. Yes, your income is going up but, so are your expenses and $400 a month isn't the entire story. You're paying more for gas than when you filed as well as utilities, etc.
You do need to quit applying for credit. Just sit back and lok at the totality of your situation and if it has not changed markedly for the better, you're OK.

[13inOR]

You did not mention how much your settlement was, but we were told by our attorney for our chapter 13 that only amounts over $2500 had to be reported, so if it was less than that, its not an issue anyway. If it was more than that, worse case scenario IF the trustee found out about it, you would probably be required to pay the excess over $2500 back to your creditors.
As far as the credit cards go, you are not supposed to acquire new debt so if I were you, I would not carry a balance on them at all.

With your expenses increasing, this is a valid reason for an amended plan. You may not even need to take the extra job, if you get your plan amended to accomodate the extra $400, then you would just pay less to your chapter 13 plan.
But----I would not apply for any more credit if I were you.....they could dismiss your plan if they find out.
I am not an attorney or an expert, but we began our chapter 13 about 19 months ago and have a fabulous attorney who kept us very informed, so all I can really pass along is my own experience
and what I have gained from my own research. Hope it all works out for you!

[SinkingFast]

I guess technically, you should have reported the settlement, BUT you used the proceeds to replace what was damaged. Your bike was wrecked, you used the settlement monies to repair the bike. As long as you didn't make huge personal profit off the deal, you should be OK there.

You can get your attny to go back to the Trustee to amend your Ch 13 plan to allow for the increased health insurance costs. That's why attnys charge more for 13's than for 7's. Because the attny may have to perform services for you throughout the duration of your plan.

If the $400/month is more than can be amended, and you do have to take the extra job anyway, not every penny of income will go to plan payments. You've had an increase in an allowable living expense. The increase in the health insurance premium. Plus you'll have costs to go to work to get the extra monies. Transportation, possibly clothing and food, etc. That will all be considered as well.

Basically, as I understand it, there are only 2 loans you can get while in a Ch 13 plan. Home loan and car loan. Both MUST be approved by the Trustee. So don't use your CC's and don't maintain any balances on the accts. It might even be wise to write letters to the ones you got while in the plan and CLOSE those accts.

[edward08r]

Thanks for the input from all of you. I guess I'll just try to muddle forward, bite the bullet and get in touch with the replacement attorney, see what happens.

[aa06a47]

Thanks for the input from all of you. I guess I'll just try to muddle forward, bite the bullet and get in touch with the replacement attorney, see what happens.

Remember, cancel them cards, don't use them....you could get into alot of trouble that way. You have made it this far in your plan, don't let a technical matter ruin it. Plus, remember, ignorance of the law is no excuse.

[edward08r]

Remember, cancel them cards, don't use them....you could get into alot of trouble that way. You have made it this far in your plan, don't let a technical matter ruin it. Plus, remember, ignorance of the law is no excuse.

I have a small balance on them....thought that was the way to build credit. I can pay them off and cancel them tomorrow.....but I guess they are gonna show as recently issued and used and recently closed on my credit report. I counted my payments and I have made 35, but the first 6 or so were between filing and confirmation....and must not count toward the "36 month & you can pay it off" threads I've been reading here, cause the NDC still shows me owing 34 more?

[bkbiker]

new debt?

I have read all the bankruptcy codes and there is no rule that says you can not have a credit card, unless that was stipulated in your plan. If you pay off the balance on the credit card every month that is not considered new debt, it is a revolving credit line.
The bankruptcy codes says that you are not to take on substantial new debt (much room for interpretations) I think you should talk with your attorney about this and what the trustee in your area would considers substantial

Good luck

[edward08r]

I closed my tiny credit cards within an hour of the last post. They are no more. I am not sure how they figure the 36 month deal, and maybe this should be a new thread? So I guess I will post it as a new thread. Thanks to all of you for your input and advice....thru my own ignorance I have been walking in dangerous waters and thought I was being compliant.

[bkbiker]

Here is the bankruptcy code Section 1329; A plan modified under this section may not provide for payments over a period that expires after three years after the time that the first payment under the original confirmed plan was due, unless the court, for cause, approves a longer period, but the court may not approve a period that expires after five years after such time.
I believe you are allowed to keep any insurance proceeds that are a result of personal injury awards. As for your vehicle; if the trustee is making payments on your behalf, than the insurance settlement may have to be turned over to the trustee, if the vehicle was part of your exceptions, than I believe you are allowed to keep that money and repair or buy a replacement vehicle.
If you are earning more income and your expenses also go up to match that income that that should cancel itself out.
I would never start a dialog with your trustee, always call your lawyer first!
Good luck

[aa06a47]

I have read all the bankruptcy codes and there is no rule that says you can not have a credit card, unless that was stipulated in your plan. If you pay off the balance on the credit card every month that is not considered new debt, it is a revolving credit line.
The bankruptcy codes says that you are not to take on substantial new debt (much room for interpretations) I think you should talk with your attorney about this and what the trustee in your area would considers substantial

Good luck

The trustee must approve any debt incurred during the time a person is under a chapter 13 bk. My understanding is that (and it may vary state to state) is they will generally approve $2500 with a plan on how your going to pay it off.