Follow up to some previous posts

In a previous post I mentioned exercising self-control as a means of acquiring peace and happiness. For me, exercising self-control means not picking up the cutest new stuff at WalMart or eBay. It means not stopping at the thrift shop to pick up some cute handmade fashion item. It means I have to monitor my budget carefully and be careful not give in to the desire for instant gratification in order to meet some longer term savings goals. (This is NOT an easy task when you are also living with Indiana Jones who needs to have the latest gadget in camping and survival gear.)

So. That is what I am working on. I have created a very strict and very do-able family budget. I know you are thinking "budget". UGH! So did I. But it actually became fun, because what I came to realize is that after 2 months of playing catch-up, and really barely having an extra dime to spend on ANYTHING, I actually will very easily be able to start putting some money in the bank for emergencies and regain a sense of security. That seems important to me.

What happened with the California Franchise Tax Board thing? I was beside myself with excitement when I finally got THIS letter in the mail from them...

Click here to view the scanned *.pdf image of the letter I got from the California Franchise Tax Board!! (You'll need the Adobe PDF Reader to view it.)

It was an awesome feeling to be out from under a $3000+ tax lien on my credit report! I would like to be able to say that it was easy. In the end, it really was easy. But for the better part of 2 years, it felt like banging my head against a wall to get this accomplished.

Yes, I AM willing to help other people in similar circumstances, however, I will have to charge $5.00 per question via email.

You can pay the $5.00 here, and then be sure to type your question in the comment box, and be sure that your email address is correct so that I can respond. If you ask more than one question without paying for additional questions, I will only answer the first one.

Please remember, I am not an attorney, nor do I play one on TV and of course, I cannot guarantee that your results will be the same as mine... I am just an ordinary girl from Texas with a little experience and a lot of common sense.

Chapter 13: Steps and Changes...the continuing saga

I began this posting here: http://www.squidoo.com/Chapter-13-steps-and-changes/...

Steps That Occur in Filing a
Chapter 13 Bankruptcy

When your bankruptcy petition is prepared and signed by you, it is filed with the Bankruptcy Court. You are assigned a case number and a Trustee. Normally, there is only one Chapter 13 Trustee who makes decisions on all Chapter 13’s filed in his/her jurisdiction. In a Chapter 7, there may be more than one Trustee, called an "interim” as well as a “trustee.”

Your attorney or paralegal (or YOU!) will also file a Chapter 13 Plan with your bankruptcy petition that details the amount of your monthly payments and the length of time you are going to be in the Chapter 13 Plan.

This amount you pay each month to the Trustee is determined by the amount of money you currently make and how much money you need to live on each month. A good Chapter 13 bankruptcy attorney or his paralegal is skilled at balancing these two figures so you can easily afford the Chapter 13 payment each month. It is not to the advantage of the attorney or paralegal to give you a payment you can’t afford. This would cause problems later down the road. So don’t be afraid that your payment will be too high for you to afford.

*** Personal Note: If you are doing it yourself, keep in mind that your budget and your repayment plan should justify each other, and will be examined by your trustee for fairness to both you and your creditors. They want to see that you are making a good faith effort to contribute ALL of your DISPOSABLE INCOME, but not more than you can realistically afford. For example, if your income/expense schedules show that you have $500 left over at the end of each month, and your repayment plan proposes $200.00 per month to the trustee, the trustee's job is to ask WHY? Conversely if your income/expenses show that you have $200 left over at the end of the month, and your repayment plan proposes $500.00 per month to be paid to the trustee, the trustee is going to ask HOW? ***

The Trustee will send a notice to all the creditors (people/companies you owe money to.) This notice is normally sent 5 days after you file your petition.

The court will normally send you a notice informing you that you are eligible to file bankruptcy. You don’t have to do anything with this notice but keep it in your personal file.

The Trustee will then send all your creditors, including you, a notice informing you of the hearing date when you should appear in court. This hearing is often referred to as the “Meeting of Creditors.”

At your Meeting of Creditors NO judge will be present - but YOU had better be! The Trustee will ask you some of the same questions you answered when you first filled out the paperwork for the attorney or paralegal; or whomever originally prepared your bankruptcy petition.

In actual practice, creditors rarely appear at this hearing because they know they will be getting paid through the Trustee; however, a representative from one of the companies you owe, or a person you owe, may also show up at this meeting, but they normally only appear to ask where the secure item is and if it is insured.

After the Trustee has approved your bankruptcy, you are required to pay your first Chapter 13 payment. Your payment must be in the form of a money order or cashier’s check. No cash is accepted. Usually personal checks are also not accepted. I am not a big fan of Wal-Mart, however, their money orders are usually cheaper than the ones you can buy at the post office.

The Trustee will normally provide you with information on how to contact his/her office with any questions as well as an address where to mail your payments.

At this time, you may want to set up a payroll deduction so you don’t have to worry about writing a check every month. Because a payroll deduction may take 4-6 weeks before it begins, you need to continue making payments to the Trustee on your own until the wage deduction starts. If you get behind in payments, your case could be dismissed and you will have to start all over again.

Finally, a Confirmation Hearing is scheduled but you normally do not appear in court. Your attorney normally appears on your behalf to simply confirm that you are approved to be in the Chapter 13 plan. ***Of course, if you did it yourself, you will have to be there. If your District office uses the VCIS (pronouced "VEE-sis") system, it is easy to call (toll free) 24 hours a day and keep informed of your hearing dates. If you are not able to determine if your district uses VCIS, or, for that matter what district you should file in, you should probably NOT be filing your own bankruptcy.***

Changes in Payments During a
Chapter 13 Bankruptcy

Nothing stays the same. During the 3-5 years that you are making regular payments to the Chapter 13 Trustee anything could happen. You may lose your job. Your spouse may lose their job. You may have a new baby. You may inherit some money. Your old car may conk out and you have to replace it. A million things can happen, which means your Chapter 13 payment can be lowered or raised depending on the circumstance.

Many people, when something occurs where they cannot make a Chapter 13 payment one month, will simply not pay it. This is a very bad idea. All you have to do is contact your attorney and ask them to file a Motion to Modify the Chapter 13 Plan. You will need to go to the office and supply the attorney with new, updated income and budget information, which explains why you cannot make your normal Chapter 13 payment, but it is well worth the 2 hours of time.

***Note: I budgeted an emergency savings fund into my income/expense statement, which I plan to adhere to religiously. This will be used for such things as emergency car repairs and/or a monthly trustee payment in the event of an unexpected employment crisis. Now, looking at the absolutele feasibility of my new budget, I am kicking myself in the hind end and wondering why didn't I do that SOONER, before I had to file Chapter 13??? Well, the truth is, I had, but then I got sick and unemployed and burned through that savings like kindling in a forest fire. Then, when I had the opportunity, I did not get back on track saving as I should have...NOT because I didn't know better...***

If you need to go into debt and purchase something on credit while you are going through a Chapter 13 bankruptcy, your attorney can file a Motion to Incur Debt for you. This will allow you the needed money to purchase the item. (Example: Sell one car and purchase another one.)

The original article source: Chapter 13 Bankruptcy, Changes in Payments and Steps That Occur in Filing a Chapter 13 Bankruptcy

*** Notes added by puterbug ***