Life in a Chapter
13
Make no mistake, that although filing a Chapter 13 case can
help you save your house from foreclosure, your car from
reposession, and stave off your creditors, it is no easy
task. If you file a chapter 13 and receive your discharge,
you should be proud of yourself! Cases fail for a number of
reasons: you lose your job, unexpected expenses arise, you
get sick for a time, living expenses increase. Remember,
that every dollar of disposable income that you make goes
into your chapter 13 plan. If you earn $3,000.00 a month
and your living expenses are $2000.00, then your plan
payment is $1,000.00 per month, which leaves you with no
wiggle room for extra expenses. So, if the plumbing burst
in your house and you have to pay your plumber $2,000.00 to
fix it, you won’t have any left over money to pay him.
Oftentimes in a situation like this people skip a few plan
payments to pay the plumber and then think they’ll catch up
on their chapter 13. Instead, they fall farther behind on
their payment and the next thing you know the Trustee has
filed a motion to dismiss the case. Always the best rule of
thumb is to pay the trustee first no matter what. If you
have an unexpected expense try to work on a payment
arrangement with the plumber, dentist, mechanic or whoever
you the money. Don’t use your plan money because you are
setting yourself up for disaster. The best way to make your
plan payments if by wage deduction. The payment is deducted
out of your paycheck and goes directly to the trustee. This
way, there will be no temptation to spend the money
elsewhere, plus you don’t have to think about getting money
orders and mailing the payments every month. If you have
paid bi-weekly or weekly, your plan payment will be split
up and deducted accordingly from each paycheck.
