Where can you safely save money in a chapter 13 plan

[tobee43]

And most of those (us) that filed a chapter 7 are not "thriving" either. A chapter 7 is sort of like having to start all over in life again. That's not pretty at all when you're in your 50's.......

And the importance of saving something every month, even if it's only $50.00 can not be stressed enough. That is the one thing that can help keep you away from the debt monster.

amen to that! in reference to the chapter 7 and starting all over after decades of the way it "was". i must admit, i approached the savings situation a bit different. besides having the goal in mind to get this place paid off in 36 months (which i will accomplish) i have managed to save to a point where i came to a crossroad. do i keep the money in a bank yielding nothing or do i take the plunge.....i took the plunge and purchased a bond way under par, from a new community college in calif. although leery and skeptical, i almost fell over when we made 3k in 4 months! now, that's the GOOD thing about a 7, you can really start to save.

the other dilemma, do i put more to pay off the mortgage and NOT save at all??? so i just have been splitting it. it's just the realization that we will never have what we use to, nor the time to recoup what we have lost. at this point, we are just happy to being able to save and actually and REALLY living within our means.

oh! i have to add this...we never lived beyond our "means" and our bk was due to medical bills and job losses NOT money mismanagement. those job losses will do it every time!

[pamkev]

And most of those (us) that filed a chapter 7 are not "thriving" either. A chapter 7 is sort of like having to start all over in life again. That's not pretty at all when you're in your 50's.......

And the importance of saving something every month, even if it's only $50.00 can not be stressed enough. That is the one thing that can help keep you away from the debt monster.

Amen to that frogger

[frogger]

I dont think anyone in a ch. 13 is "thriving" - we're all struggling, thats why we're in a BK situation.

However - it is important to put something away every month, even if its only $50.

And most of those (us) that filed a chapter 7 are not "thriving" either. A chapter 7 is sort of like having to start all over in life again. That's not pretty at all when you're in your 50's.......

And the importance of saving something every month, even if it's only $50.00 can not be stressed enough. That is the one thing that can help keep you away from the debt monster.

[woeisme]

Our savings have varied from $3500-$0 over the almost 5 years we've been doing our CH 13 plan (our 5 year anniversary is coming up, but our trustee starts the clock from confirmation, so we still have several months left, but the end is near!) Right now we are at the $0 mark due to broken central air a few months back, a vacation, and a major car repair. I picked up an overload at work that's going to add $1250/mo to my paycheck for the next 4 months (well, that's pre-tax, so really more like $800/mo) to build the savings back up before the next financial hit happens (they always happen sooner or later!)

I keep our savings in a fire safe at home. My trustee is very "hands off" but since there's no interest to be made in a bank account and now the banks want to charge fees for everything, and I can't guarantee keeping the account above their minimum $, I just stash the $ at home.

[Pandora]

I dont think anyone in a ch. 13 is "thriving" - we're all struggling, thats why we're in a BK situation. You need to save something every month in a Ch. 13, and by doing the exact methods listed above by other posters (i.e., dont need clothes this month, set it aside - no high medical bills...aside it goes) - that is how we're able to save. Of course, not having pay increases go to the trustee helps a ton as well as any increases get set aside and not factored into our budget;- but in general, its pulling from other places. I guess I should've clarified to my post above: some months its $500 - others it can be upwards of $1200 - it just depends on what we spend cautiously on.

We've built it up...only to have it go to nearly nothing due to ER situations (vet bills, medical expenses in excess, repairs to vehicles, etc). However - it is important to put something away every month, even if its only $50.

[andy158]

Well put frogger. If things are not generally improving throughout your plan, you won't be doing much better after discharge.

[frogger]

Yes you can trust the system because it is not property of the Bankruptcy Estate.

Exactly. You need to remember that bankruptcy is a snapshot of your financial picture on the day that you file. Bankruptcy is a snapshot, not a motion picture.

[LadyInTheRed]

Yes, I trust the system and save money in a savings account. I was honest in my filing, so I'm not concerned about the trustee finding out I'm saving money. If the trustee wants to come look closely at my financial situation, she can see that my income is higher than it was when I filed and motion to amend my plan to increase my payment. I'll point out that the rotting joist on my garage needs to be replaced and the house needs to be painted and that those items weren't included in my very low home maintenance budget on Schedule J. If my payment is increased anyway, I'll save less.

I think it is very unlikely that the trustee will ever come look. My attorney says she just cares that I make my plan payments. He's been doing this for over 25 years, so I trust he knows what he's talking about.

I've been reading this forum for about 3 years and have yet to hear of anybody getting into trouble for saving during a Chap 13.

[justbroke]

Yes you can trust the system because it is not property of the Bankruptcy Estate. Remember, a Chapter 13 is not meant to be punitive, but it can be punitive for those who refuse to or can't budget. Belt tightening and saving is how you survive a Chapter 13. In general, a Chapter 13 debtor should be concentrating on paying their bills, staying off the Trustee's radar, and saving as much as possible because things happen!

[magic13]

Guess I'm one of the lucky ones as well. Including my income tax returns which I get to keep, I was easily able to stash away a pretty hefty sum of cash my first year into the plan.

It's looking even better going into this year.

Let me rephrase my question, I didn't mean to start a who is struggling and who is thriving debate, it is what it is and some people situations allow them to save $500.00 a month. I guess the question is do you still trust the system to save this money in the open, even if you think that the $500 plus will morph into $300 a month, that is still $9,000 over a 30 month period and $18,000 over a 60 month period. Even if you report $50 in interest at less than 1% the trustee knows you have at least $5,000 stashed in a bank

[andy158]

We are lucky to save $500 every 6 months! Two teenage kids and old vehicles take a toll. If you can save $500 dollars a month, God bless you. Seems like every time we get a little ahead, something else pops up. Like last month when the a/c went out in the car and house within 3 days of each other. Over $900 to repair! Thank goodness we were able to cover it with cash, but our emergency fund is empty. Time to watch every $ now til it gets built up again.

We don't worry about where to keep savings because it doesn't last long enough to accrue interest!

I did bump my contribution to our 401k at work. Not enough to raise any eyebrows, but nonetheless a savings increase.

[out4good3]

Well..guess I'm one of the lucky ones because our trustee doesnt require any raises at all.. and we are able to put aside a substantial amount of $ each month (lets just say..more than $500 but less than $1200).

Counting my blessings in a MAJOR way

Guess I'm one of the lucky ones as well. Including my income tax returns which I get to keep, I was easily able to stash away a pretty hefty sum of cash my first year into the plan.

It's looking even better going into this year.

[Pandora]

Well..guess I'm one of the lucky ones because our trustee doesnt require any raises at all.. and we are able to put aside a substantial amount of $ each month (lets just say..more than $500 but less than $1200).

Counting my blessings in a MAJOR way

ETA: Lady - you made interest?! LOL As to where to keep it - thats totally up to you however just be sure to keep X amount on hand in case you need it immediately.

[kornellred]

Quite often, my postings have been a tad facetious - on purpose. No one can be certain of how things will unfold in a Chapter 13; even 3 years is plenty of time for life to change for better or for worse. I think justbroke's response to the OP is just about as succinct and accurate as it is possible to be. Most trustees are interested in the debtor staying in compliance with the BK court's confirmation orders, and that's all. Some complicated cases require periodic review - it may be hard to stow away significant amounts of cash in those cases. Like I have mentioned before - debtors in Chapter 13 who are having an easy time of it pretty much keep it to themselves, because you don't find too many people bragging around here.

[tobee43]

I have a fire safe box

yes, we had one of those, but the money got moldy and smelly. we were worried it would fade away into nothing. it was expensive too, so now i keep cat food in it.