Husband and I are considering a Chapter 13. I have a lot of questions, so please bear with me!
I'm rather embarrassed to admit that we filed a 7 in 2013, discharged February 2014, but are still in debt. We went through a period of about 6 years with one job loss and extended period of unemployment after another, which forced us into the first bankruptcy.
The bulk of our current is a car loan and tax debt (local, state, fed) mainly from under withholding. Owe $8000 on car (worth about $4000). Car will be paid off in March or April of 2019. About $12,000-$14,000 in taxes. About $9000 in unsecured debt. Six figure student loans for me for two degrees. Maybe $2000 in medical debt.
Household of 4. Us, young adult daughter and teen son.
Husband and I both work full time. Earn good money on paper, but it's dependent on overtime, which isn't guaranteed. About $45,000 for me and $55,000 for him with overtime for both of us. In reality we only take home 65-70% of our gross earnings, even less if we were to adjust our fed taxes to the appropriate withholdings. In that case we'd take home probably 60% of our gross pay. Plus we have to file separately, due to my student loans. IBR calculation is far more favorable that way. But filing like that puts us in a higher tax bracket.
Daughter works part time and is in college.
I'm terrified of a Chapter 13. Not the credit aspect, but of being absolutely literally broke every month, not even being able to afford to take the dog and cat to the vet, fill prescriptions (we have large out of pocket uncovered med expenses), eat out a couple times a year for birthdays, buy Christmas presents for the kids, new tires for the car or an oil change, etc. Or even go to the movies, the zoo or a local amusement park. We don't live a luxurious lifestyle. But it's nice to be able to spend $100 a couple times a year doing something fun with the kids.
I'm also worried that my daughter's income will be calculated into our plan, as she is an adult household member.
I can't find a good Chapter 13 payment calculator anywhere online even after hours of searching.
How can I realistically figure out what our payments would be?
My student loans are on an IBR plan, so I only pay $15 monthly. Would those be included in the BK plan?
I read that with our income we'd be put into a 5 year plan. But our taxes, car, and any unsecured debt would be paid off long before then I assume. So...would we have to keep paying the full payment every month, just for it to go towards my student loans, when instead I could just pay $15 through IBR??
Also, I was looking at the IRS allowable expenses for a Chapter 13. It says $1100 for rent PLUS utilities for my area in Ohio.
Completely unrealistic unless we were to move into a tiny 2 bedroom dump of an apartment in a rough neighborhood.
We pay $1300 for rent plus another $300-$400 for gas and electric. $150 for cable and Internet. We don't live in a mansion. We rent a smallish 90 year old 3 bedroom house. High utility expenses due to living in a 4 season climate and old house with poor insulation and some original windows.
Rent is high because we live in one of the best school districts in the state and are close to everything, which is important being a one car family and me taking a bus to work.
Single family homes for rent in our suburb are scarce and go for $1200-$1600 a month. We've been here 4 years with no rent increase. Landlords let us have a dog and a cat, which we couldn't have in an apartment. Plus apartments here still go for $1100 for a 2 bedroom. We just signed a 2 year lease in August and our son is a freshman in high school, so moving out of the city is not an option. We plan to stay at least until he finishes high school.
I'm afraid the bankruptcy trustee would just tell us too bad about our rent and utilities exceeding the IRS max, and we wouldn't even be able to pay our rent and utilities every month in addition to the Chapter 13 payments.
Please help and thanks in advance!
It will also help you find a lawyer to use. Good luck!
