Okay, your Chapter 13 case has been filed and you have attended your Section 341 Meeting of Creditors. Let’s say that the Trustee has recommended that your Chapter 13 plan be confirmed on an interim basis. Now what? Here are three tips to remember:

1. Watch out for Force-Placed Insurance! This is the type of very expensive insurance that mortgage companies love to impose upon homeowners. If you are responsible for maintaining your homeowners insurance, then don’t let it lapse! If your coverage lapses, then your mortgage company will purchase force-placed insurance that will only cover them. Thus, if you have a house fire, you won’t get paid, but your mortgage company will be reimbursed! Moreover, force-placed insurance is 3 times as expensive as regular insurance. And who foots the bill? You do!
2. Baby your Vehicles! Car maintainance is extremely expensive. Take care of your cars well. If you need to borrow money to purchase a car once you are in bankruptcy, it can become difficult. Folks in Chapter 13 can indeed be approved for car loans, but in the Bankruptcy Court in Western Pennsylvania, those vehicle loans must be approved by the Judge and the vehicle payments must be included into the Chapter 13 plan payments. That’s difficult and expensive!
3. Live Within your Means. You and your attorney have established a budget for you within your Chapter 13 plan. So, you’ve got to live within your budget. I’ve got some amazing clients who are in the third year of their Chapter 13 case. Early on, they attended the Dave Ramsey Financial Peace University. They worked out a hard-core household budget and have both withstood layoffs, all the while maintaining their Chapter 13 payments!