chapter 13 in Central Wisconsin

[firsttimer]

We met with an attorney yesterday and she has us totally freaked out about what we are going to have left over for money after we set our budget for a chapter 13. Are we going to be expected to stop life dead in it's tracks and become hermits? What are the max allowable spending limits for our budget and how do we end up with some money left over so we don't have to live like hermits? We have 2 children and they are both VERY active in sports and just over all extra curriculars. Will we have the money left for them to stay active in their events? Guess we're just not sure what to expect. If anyone could help to settle my worried mind, I would really appreciate it.
Thanks!

[steveok]

Unfortunately, your life will be changing some. Activities (not just your children's) that got "us" into this mess will have to be a new mindset. Setting a budget and holding to it is part of the learning process that goes along with a chapter 13. I'm sure that your attorney will ensure you have enough for the "necessities" in life, but some of the luxuries might have to change. I image the children will be able to continue some of their sports, but maybe not to the extent that they have in the past. Wishing you the very best!

[newbie2]

A chapter 13 plan is a great "learn to budget" education. Without knowing why you will be in a Chapter 13 vs filing for a Chapter 7 (non-exempt assets? mortgage arrears?) it is difficult to state whether your plan is harsh or whether your expectations are too high. You will be allowed entertainment expenses, and school expenses for your children. However, if you are talking (for example) $500 per month for sports for your kids then you are expecting too much. What many people do is find wiggle room within other areas of their budget (food, clothing) to help pay for things that aren't in their plan (extras for the kids, etc).

Please note: A chapter 13 plan is voluntary. No one can force you in to one. If you don't like the plan or don't think you can make sacrifices to stick to it, then don't do it.

[firsttimer]

Thanks for the replies, guess I'm just not sure about the whole thing, are we making the right decision?
As far as the sports and such go, I'm not talking like $500.00 a month for sports, we're not that crazy, LOL! But one child does traveling baseball in the summer, (which stays pretty local), no out of state or overnights,football in the fall, which rolls over to wrestling in the winter. The other child has a lot of High school activities that ALWAYS seem to require some kind of money. I beleive that if our children are in these activities, it will help to keep them out of trouble in the future. So far it's been working and if we don't have to, we really don't want to change that. I do expect life to change, but as I said, we don't want to have to become hermits either. Will we beable to do the tent camping in the summer, along with hunting and fishing?
Where do I fnd out what the max limits allowed are for budgeting in my state? Any ideas?

[firsttimer]

Ok, so now after reading some of the other blogs on here, I have another question, when you do a chapter 13, payments come directly out of your paycheck like a garnisment?

[steveok]

It will be up to the trustee...some like to have the payments payroll deducted, others allow you to mail them in...your attorney will know the way your local trustee likes to proceed...

[firsttimer]

Any idea where I can find the max limits for budgeting in my state?

[firsttimer]

Also, what items should be included in the budget?

[momofthree]

Here is a link to the IRS standards, which will dictate your expense amounts for things like groceries, clothing, transportation costs, etc: http://www.justice.gov/ust/eo/bapcpa...anstesting.htm

I believe there is also a line item on the means test that allows you around $140ish per month for school expenses per child. You could probably put some of their extracurriculars into that category.

[IamOld]

Here is a link to the IRS standards, which will dictate your expense amounts for things like groceries, clothing, transportation costs, etc: http://www.justice.gov/ust/eo/bapcpa...anstesting.htm

I believe there is also a line item on the means test that allows you around $140ish per month for school expenses per child. You could probably put some of their extracurriculars into that category.

momofthree - I have a question re Ch 13 - IF - IF my means test would show a monthly payment for 60 months that is MORE than unsecured debts DIVIDED by 60 - in other words, it would OVERPAY the unsecured over 60 months, would they take the means test amount OR would the Trustee simply be looking for UNSECURED DIVIDED by 60 and no more. I can...do the unsecured/60...(and I've been playing with the Nolo means test calculator daily...) And I think Lemming would apply to me as my multiple extra jobs...I simply cannot keep up - my income would (is) declining...

[momofthree]

momofthree - I have a question re Ch 13 - IF - IF my means test would show a monthly payment for 60 months that is MORE than unsecured debts DIVIDED by 60 - in other words, it would OVERPAY the unsecured over 60 months, would they take the means test amount OR would the Trustee simply be looking for UNSECURED DIVIDED by 60 and no more. I can...do the unsecured/60...(and I've been playing with the Nolo means test calculator daily...) And I think Lemming would apply to me as my multiple extra jobs...I simply cannot keep up - my income would (is) declining...

It varies by district. Some trustees have no issue with dividing your debt by 60 and allowing that to be your payment. Other trustees require that you contribute your full dmi to the plan and simply pay it off sooner. If you're not being sued or facing imminent foreclosure, it would be easiest to just wait until the extra money drops off of your 6-month lookback so that you don't even have to get into the Lanning issue, which generally applies to one-time bonuses, seasonal overtime, etc. If you're still working the extra jobs (or quit working them a just a few weeks before filing), you're going to have a harder time fighting the trustee on it. So, my recommendation would be to stop with the extra jobs, stop paying any unsecured debt, save as much cash as you can for an e-fund (if you're going to pay back close to 100% anyway, cash on hand won't be an issue, it will just be a non-exempt asset that you're keeping), and then file in 6 months or so once the additional income falls off the lookback...

As always, an experienced local attorney will be your best resource as to what will fly in your district and what is a no-go.