Crunch Time

If you are curious about the payments I will be making or contemplating a Chapter 13,  I thought I would try to put together a post that gives you an overview of the expenses and budget that is “allowed” by the federal government.  Each state must adhere to these guidelines, with some changes based on what part of the country you live in.  Some areas are obviously less expensive than others.  All the information for your state can be found at the link I provided.

These are the numbers that lawyers and your trustee use when determining what your monthly budget and what is not considered DMI (Disposable Monthly Income). DMI is what’s left and it’s used to make your monthly payment.

The following information was taken from:

So let’s get started.   I have a Two Persons budget and I live in Southern California.

Living Expenses


As you can see, I think this is more than reasonable.  It is my plan to try to cut the food budget spending by $137.00.  I will include housekeeping supplies in the food budget, so there is another $65.00.  Apparel and Services can be saved until I need it, so there is $209.00.  Personal care can be saved as well.  I’ll keep misc. in the budget.

$474.00 to be socked away and used for emergencies as well as clothing and hair as needed.



This is the budget allowed for Vehicle Operating Costs, $295.00 for one vehicle, which is what I have.  I don’t have a car payment.  The operating costs include maintenance, repairs, insurance, fuel (California is one of the highest in the nation!), registrations, licenses, inspections, parking and tolls. My car is a 2006 and should be in good shape for at least the duration of this 5 year plan!  I have approx. 60K miles on it.



Housing and utilities standards include mortgage or rent, property taxes, interest, insurance, maintenance, repairs, gas, electric, water, heating oil, garbage collection, residential telephone service, cell phone service, cable television, and internet service. The tables include five categories for one, two, three, four, and five or more persons in a household

We are a family of two, my daughter and I.  So our housing and utility allowance is $2813.00.  That seems generous but in reality, my mortgage is approx. $1500.00 and HOA is $350.00, and then there are the high electric bills etc.   But you have to take into consideration income.  Mine would not support 2800.00 in housing and utility.  PLUMBING is my biggest fear!!!!

Health Care


Thankfully, I have health insurance, however, it is a PPO so I have to pay 20%.  This scares me.  I have a couple of chronic healthcare issues (I know I seem so healthy right).  I try to keep healthy by walking, taking my meds and vitamins and trying not to abuse my ol’ body!  Winking smile

In my planned proposal to the courts, I have opted to keep my mortgage separate and will pay it on my own and NOT part of the payment plan, but of course, it is still an allowable expense.

I know I have not given any REAL specifics on my income and expenses, but I prefer to keep it that way.  Trust me, or TRUSTEE me when I say, it will be tight, but if I can cut those expenses mentioned above and nothing major happens before I can save up for it, I will be fine.

Bankruptcy is there as a tool.  It is a law not a handout.  Do I feel sorry, you bet I do.  Am I afraid, you bet I am.  Will this influence the way I live the rest of my life, ABSOLUTLY. I do not want to ever play interest or the credit card game again.  I have been playing it for 35 years and I am done.

So I hope this has given you some insight to what is expected and allowed as an expense.  One of these days I will post how they formulate your planned payment for either a 3 year or a 5 year plan.  Obvi – I am in a 5 year plan or SIXTY PAYMENTS!


7 thoughts on “Crunch Time

  1. I know it’s not going to be easy, but from day 1, focus on trying to make a little extra money. What are you good at? Baby sit other kids, help a neighbor move or paint his house, bake and sell cakes, whatever brings in a few dollars is welcome. And when it is time to spend, always wonder if you can do it yourself. Plumbing is not so hard once you watched three video tutorials. So is changing your car oil, or sealing your house to avoid high utility bills. Make sure you prevent bad things from happening. By not delaying your car maintenance, checking your house often for damages, eating well… You don’t want a bad emergency to ruin your plan, good luck!

    • Hi Pauline! I have become quite the handygirl! I changed out a dimmer switch! I regrouted my own tub, around the edge, just last sunday too! I do have a pc job on the side, but it is far and few between which makes me happy. I am an exhausted fulltime worker already and every night I am back in 8th grade. If I got a real part time job, they would take the money anyway. But under the table is good when I find the energy and the work!

  2. How are windfalls and such handled during this process—for example, what happens if an inheritance or an unexpected bonus or raise manifests? Do men in black appear to scoop it all up? Can you decide what extra percentage to apply toward the payment plan and what percentage you would like to stash away for an emergency fund? These posts are illuminating, thank you.

    • They take it! All of it. If I were to win the lottery, GONE! I don’t have any chance of an inheritance or winning the lottery. But it would be nice if I won a million dollars, I would just convert to a Chapter 7 and pay it all off and be done with it! That would be awesome!!!

  3. I agree with Pauline. See if you can bring in some extra dough. One thing that has worked well for a friend of mine is to run other people’s errands like groceries etc. This appeals to elderly people who can’t get around and those who are just to busy.

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