re: My checking Account - Is the Trustee Big Brother?

[simon2020]

When I file Ch 13, I understand every penny leftover after paying the mortgage, food, etc. is given to the trustee to give to the creditors.

Now, let's say $200 is allowed for me to buy food for the month. OK, now I know my car brakes definitely needs fixing in about 4-6 months after I start the plan OR I have to take an emergency trip to see a relative in the hospital. I know the trustee has allowed me to use $200 for food. I decide I can cut my food bill in half and decide to put the other $100 on the side to save for any repairs that may come up.

Q: How anal is a trustee when it comes to justifying my expenses? In other words, will they look at my checking account statements like the IRS and question me on every debit card withdrawal or check I wrote for the month or year?

Q: Do I have to save every receipt for cash transactions? Like if I took out $20 from the ATM and that $20 is part of my food allowance ($200). Now, all I want is that $1.00 McChicken sandwich and later I will buy myself a cheap book from Borders and Books - let's say again it's just a $1.00 - and later I find a shirt at the local Salvation Army for $2.00. Will the trustee say hey you took out $20.00 that should have gone to food, let me see all your receipts for the month?

[keepmine]

In a word-no.
Budgeting is important in completeng a 13. Many people cut corners while in a 13 to establish an emergency fund.

[simon2020]

Thank you keepmine. For a minute I thought I would go crazy justifying every tiny expense to the Trustee.

[kmb]

Once you file, you may never hear from your trustee again unless you're not making your payments. We filed in May, 07 and since then the only thing we've gotten from our trustee is a statement every six months showing what's been paid. They've never asked for a tax return, a refund check, or anything else. Granted, I think we're among one of the luckier districts, but with all the BK's, I highly doubt any trustee is going to scrutinize how you spend your money once your plan is filed---just make sure you keep up on your payments and you'll be fine.

[magyar123]

Depends how "analy" of a creditor friendly trustee he/she is. Remember a lot of trustees are also shareholders in banks. If that stock goes down that trustee will get less.

[Flamingo]

The Trustee will not have you keep a list of expenses as to how you use your money during a Chapter 13. The reason most Chapter 13's fail is that the debtors just cannot adjust to a new lifestyle of living with less and doing without and on a budget and keep spending away and cannot make their plan or other payments. When you start a Chapter 13, you will be on a budget with a certain amount of cash that you can use for your food, household, etc. As time goes on, you will learn you can cut corners here and there and put that money away toward something that you need, needs to be done, etc., (i.e., house repairs, car repairs, emergency trip, etc.). You'll be surprised how you can cut corners and learn to do without. Sometimes you can save a little, sometimes you can't. What we did to have funds for "extras" was toss all our extra change in our pocket/purse/wallet in a large jar and not touch it. We had some nice cash by Christmas time for presents or to have the major car repair done. In fact, we still do that to this day and it's surprising how it adds up!!!