Finally decided to file, a few general questions

[tofargone]

what a court will allow is going to be regionally decided. There are the standard IRS deductions, but not all courts ( trustees ) follow them to the letter. Mine was very liberal with allowances I have heard many that are not. This will also figure into you going a 7 or a 13. The best advice any one can give right now is to set up some consultations with lawyers in your area. The initial colsultation is usually free, but they will give you a good feel to what you are looking for. I would talk to some big firms and some small to see what suits your taste.


Good luck, hope you can do a 7 so you do not need to go through the 60 months sentence that I received.

[Runnin on empty]

I figured as much. In a sense it stinks that it isn't straight across the board with any of BK proceedings, but then again, with the fluctuations in the cost of living and such, I guess it makes sense.

We have a meeting with a lawyer next week. We're definitely aiming for a Ch 7. We are under the median income for our state, and will be dropping down to just two incomes very shortly. The schedule I vs J comparison scares me a little though. I guess it will boil down to how invasive our trustee decides to be. No matter how we slice it, we will probably always have something left over each month after our budgeted items are paid for. Just how much it will be and if the trustee decides that we should be in a Ch 13 will be another story entirely.

I make no excuses for the mess we've gotten ourselves into, but things are so skewed in the creditor's favor these days that it's sickening. I'm so glad that we're going to be free of their vile clutches soon, even if that means we do need to go through a Ch 13.

[lrprn]

One tip - when figuring your expenses, if you've been living a very marginal existence for years trying to pay all your debt, then you need to liberalize your actual expenses to what typically is paid in your community. For example, if you haven't bought clothes for years, gotten healthcare for years, etc, you need to have those things and they should be listed in your expenses. Give your lawyer average costs that reflect what is reasonable to pay if you had the money. This was some of the best advice our Ch 13 lawyer gave us when we were putting our living expense figures together.

Also here's a Yahoo real estate website that gives you the average for housing, utilities, and other general living expense costs in your neighborhood compared to the national average - http://realestate.yahoo.com/Neighborhoods . Enter your zip code, city, or address, then scroll down to the Living Expenses section. Very enlightening!

[tofargone]

Just make sure you do not let your lawyer cram you into a 13 unless you actually have no other choice.( they make more money on a 13 ). I had no choice do to arrears on my house and being over the median. If the first one you talk to says a 13 go to another, and another. The lawyer can massage your expenses a little to show you don't have anything left. According to my calculations we should be pulling $1000 over all our bills and trustee payments every month, but with my car repairs, my wifes new glasses, Swim lesson fees...............it all adds up.

[Runnin on empty]

One tip - when figuring your expenses, if you've been living a very marginal existence for years trying to pay all your debt, then you need to liberalize your actual expenses to what typically is paid in your community. For example, if you haven't bought clothes for years, gotten healthcare for years, etc, you need to have those things and they should be listed in your expenses. Give your lawyer average costs that reflect what is reasonable to pay if you had the money. This was some of the best advice our Ch 13 lawyer gave us when we were putting our living expense figures together.

Also here's a Yahoo real estate website that gives you the average for housing, utilities, and other general living expense costs in your neighborhood compared to the national average - http://realestate.yahoo.com/Neighborhoods . Enter your zip code, city, or address, then scroll down to the Living Expenses section. Very enlightening!

I haven't really bought clothes in years. Maybe $50 a year on some t-shirts, or a few pairs of cheap jeans. I have some "business casual" work clothes are still serviceable and worn on a weekly basis that are older than my youngest, and almost as old as my oldest (10)!

Is it imperative that you only put down things you actually do? Like entertainment for example - we don't really do that. We've always wanted to put both of the kids into karate or swimming lessons but never had the expendable money. Can we list something like karate or swimming knowing that we will enroll them in such activities once the BK goes through?

It's going to be tight either way, but I think we might be okay to go ahead with the Ch 7. Even if it is a Ch 13, it's still much better than what we're currently dealing with.

[Runnin on empty]

One other thing...I'm a state employee and as a part of my benefits package I get free healthcare (I have to do co-pays), so is it safe for me to assume that I cannot claim average local healthcare premiums, correct?

[CA3kids]

We are filing a 13 this Friday and our lawyer listed entertainment $ for us in our proposed budget (Schedule J) even tho we haven't spent anything on that for years.... he moved money around to different categories to make it all come out reasonably, but nothing extravagant. For example, we spend a lot on private school tuition but the court won't recognize that so if we choose not to actually spend any money on entertainment and clothing and instead put it to that tuition, that's our choice. The budget, in my understanding, was just to show where our money would reasonably go. This is different from the means test, where you are specifically allowed a limit of certain amounts in specific categories.

The way our lawyer explained it, the means test is geared to the past and what we have been doing, where the budget (Schedule J) is our plan going forward.

As for your medical expenses, it seems like that one's pretty clearfor a 13 anyway - he took our cost of insurance right off our payroll stubs for Shedule I, our income, but on Schedule J we also listed additional expenses that we pay above the insurance costs. So I think if you get free medical it won't help you with your budget.

I don't know how much of this is different from a 7. Good luck!

[SinkingFast]

As CA3Kids said,.............. Our medical premiums are paid out of Hubby's paycheck. So that amount was accounted for on Schedule I.

But on Schedule J, we claimed our copays, deductibles, monthly meds, over the counter meds, dental bills, eye doctor and glasses/contacts costs, etc.

So even if you don't pay for premiums, you should still have some deductions on Sched J anyway. And don't forget to include your Tylenol, Advil, cough syrup, OTC allergy meds, and such.

[Runnin on empty]

So even if you don't pay for premiums, you should still have some deductions on Sched J anyway. And don't forget to include your Tylenol, Advil, cough syrup, OTC allergy meds, and such.

Oh we will. Between my wife, my oldest son (who has special needs) and I, we're walking medicine chests. There isn't a day that doesn't go by that I don't have to take at least one dose of Sudafed and a dose of Excedrin. Not to mention my acid-reflux meds, my wife's allergy, inhaler (asthma) and my son's meds...well, you get the picture.

I just have this bad feeling that we're going to get forced into a Ch 13 by the trustee. Not that being in a Ch 13 is worse than our current debt, but I was hoping we could start building some savings. Our house is very old, and will probably start to need some work within the next few years. The bathroom has needed major work since we bought it, but we just didn't have the time/money to devote to it.

Not that I'm ungrateful for the opportunity of a fresh start through BK whether it be a 7 or 13, but in a way, the Ch 13 seems counter-intuitive towards saving and working on a completely cash-only basis. I mean, unless I'm misunderstanding how it works, you set forth your budget with the trustee, and anything over $100 left each month gets gobbled up and distributed to the creditors.

[lrprn]

Not that I'm ungrateful for the opportunity of a fresh start through BK whether it be a 7 or 13, but in a way, the Ch 13 seems counter-intuitive towards saving and working on a completely cash-only basis. I mean, unless I'm misunderstanding how it works, you set forth your budget with the trustee, and anything over $100 left each month gets gobbled up and distributed to the creditors.

The major reasons that debtors file Ch 13 is if they have big assets to protect (typically a house with payments in arrears) or they make more than the median income for their state and Ch 13 is their only option to get financial relief.

The keys to surviving a 3-5 year long Ch 13 successfully is to (1) have a top-notch bk lawyer with lots of experience with 13s and who knows the ins and outs of what's acceptable in your district, (2) set your incomes vs. expenses on your bk forms so that the amount you have left after paying the trustee every month is realistic to live on, and (3) pray you don't get the rare Ch 13 trustee who's so unreasonable that no matter what you cut out and do without, you can't survive on the money you have each month.

Hope this helps explain Ch 13 a little better.

[Runnin on empty]

Well, I keep putting the numbers together, and so far, IMHO, I think we should be okay for Ch 7. The lawyer I'm sure will point out more things that we've forgotten, but it's looking good (not trying to jinx ourselves).

The creditor calls haven't started yet, so I'm not foolish enough to believe that this is going to be in any way easy (not that it has been at any point for the last few years anyway).

Thanks everyone. Wish us luck, we meet with the lawyer in a few days.

[Runnin on empty]

Well, we go meet with the lawyer this afternoon. I'm scared out of my wits. I keep running the numbers through my head, and the more I do it, things don't look good. I know what is going to happen. We'll be forced into a Ch 13, and end up failing miserably because of some small things we forget to account for on our budget, or for something unforeseen, like a major issue with the house. Heck, what if we lose the house? I know we're always paid on time and plan on reaffirming, but what if the trustee decides to make us give it up anyway?

I'm going insane with the "what ifs". How did we let things get this bad...What if the trustee objects and says that we have realistically been living beyond our means for the past few years and flags us for a much closer look, or even worse, possible fraud?

I haven't been this nervous since I was told that my unit was being deployed to the Middle East over 15 years ago. My stomach is in knots. I feel like I'm gonna hurl. I just want to go find a dark corner somewhere, curl up into a ball and cry like a baby.

I feel so helpless right now...

[lrprn]

I feel so helpless right now...

So sorry to hear you are struggling to much right now, ROE . You are at the very worst stage of this journey right now - the realization that you are in serious and irreversible financial trouble and also understanding all the possible results of that discovery when you are forced to enter the courts to fix your financial problems. It's scary as he**!! And all of us have been there to some extent. I remember so well being where you are right now - it is truly awful.

The good news is that from here on out, things tend to get better. All the bad things that might happen are very, very small possibilities - you have to stay focused on the far more likely outcomes. As you meet with several bk lawyers to discuss your case, you will learn more about what's typical in your case and it gives you something else to focus on rather than just what might go wrong. The right lawyer will give you confidence that you are doing the right thing and help banish the ghosts of "what might be".

Hang in there - you will feel better about this journey, I promise! And until it does, we're here for you any time you need us.

[Runnin on empty]

Thanks lrprn, I appreciate it. We're leaving in a few minutes to go meet with the lawyer. Wish us luck.

[Runnin on empty]

Just got back. I'm still scared, but things are looking up. First thing, I get to finally quit that second job and start spending more time with my family again.

We did the math, and it looks really good for us to be able to do Ch 7. At the rate things are going, we might even end up as a negative budget on paper. Even with most of our debt wiped away, we really will have to tighten the ol' belts and live within our means.