Advice on my situation and ?s for attorney

[tothelimit]

I could use some advise/opinions from the people here with more experience than me. My husband and I filed Chap 13 in Dec 2009, we made our 1st payment Jan 2010 so we have made 20 payments of just under $1600 per month.

We did strip a $20K HELOC. I don’t have any paperwork in front of me so all my figures are estimates. We have learned to live with our payment, it’s not great but we have made it work and we have learned to stick to a budget.

After we turned over our tax refund the first year we adjusted our withholdings so that we wouldn’t have a refund. Big mistake we ended up owing $2600 to State and $900 to Federal. We honestly didn’t think it was that big of a deal, we would just make a small monthly payment and they would just keep whatever we had coming next year.

Anyway I mailed in copies of our tax returns to the trustee back in April and attached letting him know we owed. I called the IRS to make payment arrangements, I never was able to speak to a person but was able to set up a $16 per month payment.

I called the State Revenue Dep. and that didn’t go as well. They want payments of $250 per month. I explained to her that we are in Chap 13 and we can’t do that. She then told me that they can recommend that our bankruptcy be dismissed because we accrued a new debt while in bankruptcy.

I was starting to get frustrated with her so I asked her why I should even bother trying to make payment arrangements then. She couldn’t answer me other than to say she didn’t they would do it, just that they could. We finally settled on $50 per month for 3 months and she sent a Financial Form to complete and send back.

I’m worried about the form because on paper we have a lot of assets, which is why we are in a 13. It has you list all of your property, vehicles, retirement, etc. I’m afraid they will make us raid a retirement account or something.

Also we just a baby in May. Not great timing but such is life. Anyway I’m getting older and the pregnancy wasn’t easy on me, we’re both doing great now. I’ve been off work for 16 weeks now. I’m going back next week. We’ve looked at our budget and I think we can just make it with our current plan but not with these tax payments.

I called my attorney last week, but I still haven’t talked to him. I’m really wondering what will happen now. I’ve been reading here today and I realize now that I should have told as soon as I found out I was pregnant.

From what I have read I’m thinking these may be my options:

• Skip 2 or 3 payments to pay taxes.
• Get plan modified with lower payment.
• A combination of the 2
• Convert to a 7, I don’t know if we can do that and still keep our house. What would happen to that HELOC?
• Try to sell some things to pay off those taxes.

So what do you think? We have never missed a payment, we are in Oregon. Anything in particular I should bring up with the attorney next week?

[AngelinaCat]

Hi tothelimit:

I edited your post to make it a little more readable. Welcome to the forum. I am sure that the Ch13 gurus will weigh in soon.

[keepsmiling]

Are you paying any unsecureds? If so, SURELY the birth of the baby should change your payment amount.

[tothelimit]

Yes we had a ton of CC debt about 50K, then I took about about a 10K salary cut and we just couldn't keep up any more. Thats when we had to file.

[newbie2]

We did strip a $20K HELOC.

After we turned over our tax refund the first year we adjusted our withholdings so that we wouldn’t have a refund. Big mistake we ended up owing $2600 to State and $900 to Federal. We honestly didn’t think it was that big of a deal, we would just make a small monthly payment and they would just keep whatever we had coming next year.



I’m worried about the form because on paper we have a lot of assets, which is why we are in a 13. It has you list all of your property, vehicles, retirement, etc. I’m afraid they will make us raid a retirement account or something.

Also we just a baby in May. Not great timing but such is life. Anyway I’m getting older and the pregnancy wasn’t easy on me, we’re both doing great now. I’ve been off work for 16 weeks now. I’m going back next week. We’ve looked at our budget and I think we can just make it with our current plan but not with these tax payments.



[*]Convert to a 7, I don’t know if we can do that and still keep our house. What would happen to that HELOC?[*]Try to sell some things to pay off those taxes.[/LIST]
So what do you think? We have never missed a payment, we are in Oregon. Anything in particular I should bring up with the attorney next week?

You have several issues going on, the owed taxes are just a part of it..or rather, the straw that is breaking the camels back.

This is what I see going on that needs to be addressed (face to face with your attorney, not on the phone).

You adjusted your withholdings after confirmation so you would have more money in your paycheck, without a refund being taken by the trustee. I hope you talked to your attorney before doing this. ( In my district that is a big no no.) Your trustee could rightfully say "tough luck" on the new taxes owed, because you changed your income (less taxes taken out) without his or your attorneys approval. What you did was create disposable income that didn't go to your unsecured creditors, but rather in your own pocket.

You also want to strip a 2nd mortgage while in your plan. If you convert to a Chapter 7 that strip won't happen. It can only happen upon successful discharge of a Chapter 13 plan.

You have assets (that are probably non-exempt?) which is why you were in a Chapter 13. If you don't pay for the full non-exempt portion during your plan then you could lose those assets.

You've increased your family size without modifying your plan to account for the added expense.

Please please PLEASE make an appointment to sit down with your attorney face to face and re-do everything. Bring in your paystubs, your bank statments, a worksheet showing your current expenses and anything else that you can think of that shows a true picture of your current financial situation. A phone call isn't going to do it. You need to modify your plan, if it can be done and still keep your assets.

[lrprn]

Newbie 2 is (as usual) right on the money.

First priority - Get a face-to-face appointment with your lawyer as soon as humanly possible.
Second priority - Collect all the "baby-related" costs and bills that you and family have now that you didn't have before when you filed. Any ongoing and long-lasting costs related to your pregnancy and post-natal medical care and medications, ongoing and long-lasting baby costs for doctor's checkups, baby clothing, diapers, over-the-counter and/or prescription medications, formula (if you aren't breastfeeding), etc. Take all of these with you to your appointment with your lawyer.
Third priority - Take a look at all your sources of income, living expenses, and new debt since filing. Note all changes and take the newly updated figures along with you to your appointment with your lawyer.

Please let your lawyer do his/her job and please stop making assumptions about what will be ok for you to do without getting your lawyer's advice first - that's what you paid him/her for. You are flirting with possibly not successfully finishing your 13 and no one here wants to see that happen.

Push your lawyer's office to get an appointment with your lawyer as soon as possible. Explain the circumstances and insist you need to get in as quickly as possible. Don't take no for an answer. Sit in the office with the baby on a day when your lawyer isn't in court if necessary.

This is important and you need to get your lawyer on board with everything that's happened since your filed as quickly as possible so your case can be re-evaluated and possibly amended to make it more liveable for you and your now bigger family going forward.

[tothelimit]

Thanks for the replies. I was able to speak to my attorney today. He is not very concerned about the taxes. It's not a big deal here to change your deductions and they very rarely request for your case to be dismissed.
He wanted us to come in right away to modify our plan but we are going to wait until early October because I go back to work tomorrow and I will not have a regular check until Oct 1. So we cannot show our income until that time. He is very confident that we can get our payment reduced and complete our 13.