chap 13 questions

No they can't garnish you while in Chapter 13. Chapter 13 is a repayment plan, so although they may not get much, they will get something normally. Yes you must always file your taxes.

Thanks! Is there any possibility they will take my tax refund? or do I keep that?

Yes they can take that too. But I think it depends on the amount, I thought I read that its anything over $500, but don't quote me on that. SoapLady will stop by and tell us soon.

(hope Soaplady doesn't mind if I pop in here...)

I believe the tax refund question depends on how your case is structured and where you fall in the means test. My tax refunds were significantly over $500 and I was allowed to keep them while in Chapter 13 Bankruptcy just a little over a year ago. I think you'll need to discuss that with your bankruptcy attorney, to be absolutely sure.

AH Sue! I forgot you know your BK facts well also, thanks!

So I am almost ready to file but cant get attorney to answer all my questions...? Does this make sense to anyone: filing solo-just me not husband. Goes on both incomes. Payment to be about 800 for 5 years. That equals 48,000!!! My debt is 27,000!!! Add 3K for the attorney fees...what else am I paying???? Does this seem right? I could buy a new car with that 18K!!! It seems like Chap 13 is going to put me further into debt....? HELP!!

You need to be aware that filing a Chapter 13 can really hurt your income - the bankruptcy means test and the attorney determine what your "disposable" income is - not you. And trust me, their version of "disposable income" and yours will be VASTLY different.

You need to be certain that you can handle that sort of payment over a 5-year period. Remember that the bills don't stop coming when you file Chapter 13 - you just get new ones. Even though you've included debts in the Chapter 13 case, there are always car repair bills, vet bills, doctor bills, home repair bills, possibly a "surprise" baby arrives, etc. You need to be prepared for these events, or your Chapter 13 plan will fail.

It's quite possible that your plan includes trustee fees as well as the attorney's fees. Take that question back to your attorney, and if he can't tell you where that $48,000 is coming from, go to another attorney.

When the disposable income is being calculated, is it pretty fair so that you can at least still breathe?

Guest -

whether the disposable income is fair or not depends on how you look at things. In my case, I had a mortgage of $67,000 plus about $8,000-$10,000 in other debts included in my Chapter 13 plan. My take home pay each week was $340 before the Chapter 13 and $160 afterwards. I had to pay $180 a week on the plan. It didn't leave me much breathing space at all.

Your attorney will discuss your plan payment with you and will ask you if you're comfortable with it. You need to be sure you ARE comfortable with it before you agree to it. As I said in my earlier post, you need to be sure you have a way of paying the other bills that will inevitably come up during your plan period.