A friend of mines filed chapter 13 pro se about 2 weeks ago. She owed about $13,400 on her car, $11,330 on another car she hasn't paid anything towards the balance in 2 years and it was towed away to an unknown location but the car is still in her name (Capital One offered her a settlement of $1,627 which she will pay through the plan), about $25k on personal loans (2 secured loans) & credit cards combined, and $92k in school loans (this will be paid outside of the plan with IBR, if its approved). As of now, NDC has her on a 1% repayment plan with a $450.00 monthly payment. She earns a gross salary of $52k a year with 2 children and receives $440 per month in child support.
When she filled out the bankruptcy paperwork, she had about $700 per month net income remaining after all expenses but that is only because she included the child support payments. In reality, she only has about $300 per month remaining after expenses. My question is do you think there is a possibility of her payments could be increased since she do have the extra money from child support? Child support is not supposed to be used to pay her bills but bankruptcy courts do count it as income so I'm not sure how that works.
I guess it is a hard question to answer for sure. I was reading old post online where the trustee changed the payment amount after filing so I'm just trying to get an idea on if that is possible in this situation.
"In chapter 13, "disposable income" is income (other than child support payments received by the debtor) less amounts reasonably necessary for the maintenance or support of the debtor or dependents and less charitable contributions up to 15% of the debtor's gross income."
https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics
I would think child support could count as income since spouse income does and there is an adjustment for children expenses. If it does not count as income, it would make sense that children's expenses would not count.
She needs to go back over all of her expenses and put down reasonable expectations.
Hairspray, makeup, vitamins, appliance repairs, roof repairs, climate control repairs, clothes, shoes, coats, laundry, doctors, dentists, sports, band, car maitance, car repairs budget, windshield wipers, oil, home maintenance , yard work, tools, charity, holidays, education, gifts, water, sewage, trash, groceries, health insurance, tutors, cable, internet, cell phones, alarm services, tires, batteries, entertainment, housewears, carpet cleaning, magazines, $100 per month for savings/emergencies, everything and anything she has spent money on in the last 5 years that she would spend money on again.
1. She filed chapter 7 about 5 years ago so chapter 13 is her only option.
2. I don't have the exact answer to that question but I think she thought it would be cheaper to file without an attorney.
3. I guess you have a good point. I didn't think about it like that.
Her 341 meeting is on 1/26. I think the payment will be adjusted hopefully it won't be too high. She just wanted to consolidate her bills into one affordable payment.
Thanks for the advice. I spoke to her about her expenses. She is going to adjust where she can. Life as a single parent is not easy.
@kiea Best of luck to her. I just grabbed that link from the US BK Court website. Im no lawyer as you can see. But I did lean something from researching your topic if it comes up again.
No problem. I am learning as well. Thank you