Part of the bankruptcy work that Clark and Washington does with our Chapter 13 clients involves the creation of a budget that will become part of the bankruptcy petition and filed with the clerk of bankruptcy court.

By law, Chapter 13 cases must last a minimum of 3 years, although many of the Chapter 13 cases we file will end up lasting 5 years.

It is hard enough to prepare a budget for the next six months - how can anyone possibly predict 5 years into the future?  There is no absolute answer to this - here is how we approach this problem:

• the Bankruptcy Code does allow us to file an amended budget.  If your income goes down, or goes up, we can revisit your case and change your plan.  Generally it is more difficult if you want to reduce your plan payment - we will have to appear before your judge to explain why your plan payment needs to decrease.
• when calculating a budget, we try to identify expenses that you know you will have.  For example, if you know that you will need a $3,000 dental surgery within the next year, we can build that cost into your monthly medical budget.   Car maintenance issues like new tires, 100,000 mile service, etc. can also be planned.  You may need to gather documentation for these future expenses, but a little work on the front end can make your plan a lot more livable.
• you need to communicate with our office.  Our job as your attorneys is to prepare and file a workable Chapter 13 plan and to work with you to keep that plan working.  If you foresee a temporary layoff or a job change, you need to let us know.  In some instances we can get a short term suspension of your Chapter 13 payment.
• in preparation for filing, you should gather receipts and think very carefully about your Chapter 13 budget.  Budget estimates are appropriate in some circumstances but inaccurate estimates in the context of a bankruptcy case can get you in trouble.