The budget in a Ch. 13 - is it enough?

[silverlotus]

For once I have a short question!

Was the budget you or your lawyer submitted enough to cover all your expenses? Or did you struggle with it, especially in the face of rising costs like gasoline or rent increases?

[rrockinggramma]

I have done ok but it hasn't always been easy. I have had to cut back on some other things like clothes to make it some times. I think it is much tougher for families with growing kids. They have so many unexpected expenses like field trips and activities and clothes. And it is ok for the parents to scrimp and do without, fudge on the food etc but not ok to do that if you have the kids. The kids' needs would come first of course which means that you would really have to plan ahead and try to save a small rainy day fund. If the entire family is supportive of the plan, then it runs a little smoother because kids are less likely then to ask for things they know they cannot have. But the key is budgeting and planning ahead as best you can.

[silverlotus]

We don't have any kids, nor can we. So that won't be an issue.

[rrockinggramma]

Then you will probably be ok. The only key issue that you really need to be ready for is the vehicle. Make sure whatever you have it will last 5 years. And if it is a lease that is up before the 5 years is up, then you might have a problem unless you saved enough to buy out the lease. Our lawyer had us go get a new vehicle right before filing so it would last the 5 years of the plan.

[silverlotus]

We have an 06 Nissan we're paying on (loan not lease) and we have a '99 Accord that is paid off and current on all maintenance and repairs. So unless we have to give up the car we're paying on for any reason then we should be fine where that is concerned.

[lrprn]

RRG's advice is right on, SL. When you are in our situation (no kids in the home, just adults), it does make Ch 13 easier than for families with children still in school.

The key to Ch 13 survival is budgeting, budgeting, and more budgeting along with saving every spare penny you can free up until you build enough of an emergency fund to get you through the unexpected (major appliance failure, car repair, etc).

80% of surviving Ch 13 is having a good plan created at filing time. That's why having a good lawyer in Ch 13 is crucial. Writing a plan a family (even a family of two) can live on for five years is more of an art than a science. Your lawyer knowing what's acceptable in your local court and what isn't is half the battle, and all too often it's won or lost at filing.

[Flamingo]

For once I have a short question!

Was the budget you or your lawyer submitted enough to cover all your expenses? Or did you struggle with it, especially in the face of rising costs like gasoline or rent increases?

Three things that can, may or will get you; major car repairs and/or full tire replacement; deductible if you have an car accident or house claim and your deductible is high (i.e., $500 or up); and major household appliance breakdown or replacement needed and/or house repair (i.e., leaking roof, flooded basement, etc.). What hurt us badly causing us to call our attorney was a $600+ car repair on one of our vehicles (our vehicles were two years old going into a 5 year plan) and the next month our water heater died. The water heater with installation was almost $600. We were allowed to utilize a Plan payment to take care of the water heater and not make that payment inasmuch as we were in the process of waiting for a Motion to come through to buy out of the Plan. Not too many people would be in that position and would be in the middle of their Plan and have to worry about making those payments. If a bad situation like that hits, immediately call your attorney. The Trustee does not want you to miss your Plan payments or mess up your Plan if you cannot pay and have a financial crisis. You just cannot expect nor budget for everything that may occur. You just have to do the best you can and save what you can on the side to buffer any incidents. What also helps is friends or family that can do car repairs and/or household repairs. To pay them back for any labor they can provide, offer to do something you can do (i.e., lawnwork, babysit, cook dinners, etc., etc.).

Along with the budget issue is the lifestyle change issue that accompanies it. You will learn to adjust and live accordlingly and really will not want to see a credit card again.

[chpxiii]

For once I have a short question!

Was the budget you or your lawyer submitted enough to cover all your expenses? Or did you struggle with it, especially in the face of rising costs like gasoline or rent increases?

Yes, it was more than enough.