Root Canals and Appendectomy Were Expensive and Landed Me in Bankruptcy. – Ray

“Dear Lewis,

Made many not so smart mistakes which put me into serious credit card debt over the past 8 years or so. Followed by some dental work (multiple root canals) that had to be paid with credit card. Last year, had an emergency appendectomy that ended up in an medical insurance mess up. Ended up with 15K bill on that. By this time, I was far behind on credit card payments, with all accounts in the red. Collection calls from many, and a filed law suit by one creditor. Was forced to file bankruptcy. Initially tried for 7, but I make well above median income (firefighter/paramedic with two jobs), and only could qualify for 13. Total debt was around 44k, however only 36K was claimed by creditors. My attorney submitted my plan to the trustee, however she requested much much higher payments based on my income. At this point Im waiting for my attorney to submit the amended plan and hopefully get confirmed.

I have a few questions ! First of all, how high can the trustee raise my payments if I am on a 100% plan ? Do they routinely request pay stubs, or tax info each year ? If I do have an increase in income, how much of an increase would cause her to raise the payments anymore ? The reason im asking is this; I planned on taking another part time job….to comfortably afford to make the payments, as well as saving some money. In 5 years when this is behind me, Id like to have something in the bank so I can start to rebuild my life. Im not talking a huge increase in pay, but enough that I can make payments, pay my bills, still have plenty left over for unseen emergencies, and to build my savings. I did already ask the trustee if saving was allowed during a chapter 13, and she said that yes it was legal in this district.

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Dear Ray,

Unfortunately, each bankruptcy district is different in its nuances. Even within bankruptcy divisions it can be different. And sometimes there may be two chapter 13 trustees in the same division (heavily populated areas), and each trustee could be different.

Each year the chapter 13 trustee is going to require you to send a copy of your tax return. They generally do not ask for paystubs after the case is confirmed.

But if you are paying 100% of your creditors back, then usually the trustees do not care how much money you make or whether your income goes up.

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The questions would be how your trustee wants you to pay back the 100%. Since you have only $36,000 in claims, in my district, you could choose to pay $1,000 for 36 months, $2,000 for 18 months, $600 for 60 months, or any combination that pays it in full.

But in some other districts, you are required to pay all of your disposable income each month until it is paid in full.

Without knowing your exact income and allowed expenses, I don’t know your disposable income. But lets say it is $3,000. Then in this scenario, you would pay $3,000/month for 12 months and get a discharge.

Good luck!

My name is Lewis Roberts and I’m an attorney licensed in Florida and Georgia. My practice focus is consumer bankruptcy, real estate issues/closings, and mortgages. I also have Florida real estate broker and mortgage broker licenses. I am a proud member of the National Association of Consumer Bankruptcy Attorneys (NACBA), National Association of Consumer Attorneys (NACA), and a graduate of Max Gardner’s Bankruptcy Boot Camp. I enjoy helping people with decisions that impact their financial well-being.

Legal Disclaimer: This is for educational purposes only. It is not to be relied upon as legal advice. It also does not create an attorney-client relationship. No such relationship is formed with attorney without a written agreement.

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