05-15-2013 11:19 PM
Have you already filed? If you have, then the bankruptcy will be dismissed. It will still be on your credit report under public records for as long (or longer) than if you had went through with it. It might take a while to have your creditors change what they are reporting as well.
If you haven't actually filed yet, then there is nothing to tell your creditors. They wouldn't get notified until it is filed. The only way they would know is if you contacted them to tell them you were going to file. I am assuming you wouldn't have done anything like that?
05-15-2013 11:49 PM
Just thought I would comment on applying for home equity/mortgage after bankruptcy, and how your decision to do a Chp 7 or a Chp 13 will affect you.
I was told by two different financial institutions that they would only approve a loan if it has been 2 years since the bankruptcy discharge. In my situation, I had a Chapter 13 that was a 4 year plan. I completed the plan and was discharged. So I basically wouldn't be eligible for a loan with these companies until 6 years after I filed for bankruptcy. I pointed out to one company (USAA), that if I had filed a Chapter 7 (which is usually discharged within 6 months of filing) I would be eligible for a loan 4 years sooner than if I had not paid my creditors back 70% of what I owed them through a Chapter 13 repayment plan.
Now keep in mind that I have NO mortgage on the home I was requesting an home equity loan for, and that I have NO bills other than utility bills. I was also only requesting 50% of the value of my home, in a market that never saw crazy appreciation, so never really went through the massive downturn other places saw. If I were to default, my home would sale easily and quickly for more than the amount I wanted the loan for. In other words, a pretty much risk free loan for any creditor.
Bottom Line: Since many creditors for home/equity loans go by the 2 years after discharge rule, it is in your best interest to go with the Chapter 7.
05-17-2013 01:11 PM
No, I have not signed the final documents, although the filing fee has been paid. No, I have not contacted the creditors and said anything. So, I will still be listed as bankrupt, my credit score will still suck, the automatic stay will remain in effect, my creditors will not pursue action, and there's nothing further that I should do unless contacted by my creditors?
05-17-2013 07:24 PM
You need to check with your lawyer and see if it has already been filed. If it HAS been filed, if you stop it now, the court will have to dismiss the bankruptcy. If a bankruptcy is dismissed, you lose the protection of the bankruptcy court, and NO the automatic stay will not remain in affect. Your creditors are free to go after you again. On top of that, it will be reported as a dimissed bankruptcy on your credit report. A bankruptcy can be dismissed for various reasons, such as failure to adhere to court rules/procedures (hiding assets, not making Ch 13 payments, etc.), or in your case, changing your mind about going through with it. The problem is, that the credit report will not state the reason why it was dismissed. Most of the credit bureaus report dissmissed bankruptcies for 10 years after the date of dismissal.
I am not a layer, and you need to get advice from him. In my opinion, unless you have just came into a lot of cash, and won't need to borrow any within the next 10 years, then getting the bankruptcy dismissed will be of NO benefit to you.
05-17-2013 07:34 PM
Would like to add: If you didn't suddenly come into a lot of cash to use to pay all your creditors off, then filing bankruptcy will probably enable you to get your scores up quicker than if you continue to struggle paying your bills. Four years after my bankruptcy discharge, my credit scores are now just under 800. Keep in mind though, that I filed a Chapter 13. I got used to paying cash for everything. I only use credit cards for convenience, and pay them off in full every month.
05-18-2013 03:37 PM
Thank you so much for responding.
I'm sure it has not been filed. My original BK firm was taken over by a new firm, the now attorney is a young, snarky thing, she suggested I contact my creditors and hear what they have to say! She said I no longer qualify for a 7.
I would pay the debts under a 13 via a repayment plan the same as I would pay them if I wait to be contacted by my creditors, except I wouldn't have the extra cost of the 13 and I wouldn't have a BK on my CR, right? Although I have not suddenly inherited money, my financial picture has greatly improved, I am able and willing to pay my debts. My debt is 20,000, if Ifile a 13 my total would be 25,360 over 60 months. Once I'm contacted don't you think I'd be able to set up a workable solution to paying off the debts? Thanks.
05-20-2013 09:39 AM
I am no expert but I think your ability to set up payments with your creditors depends on who they are. We had a LOT of creditors not willing to work with us but they were willing to work with our DMP (this was pre-BK Ch. 13). However, we had some, Barclay's, that were totally unwilling to work with the DMP and only marginally willing to work with us. They called day and night and it was extremely stressful. As you can read in another thread, "Journey through Chapter 13", the stress of it all became too much and we were neglecting legitimate needs of our family to keep paying the DMP and Barclay's. We filed Ch. 13 last April. It was devastating at first but now I wish we had done it sooner because we would be done sooner. We now have four more years to go. FWIW, contact your creditors, all of them, and see what they are willing to do. If, in totality, it is too much, find a new attorney and do the BK. You will see from lots of people here, it is a difficult choice but one with many, many benefits. You need to do what is best for you and your family.
05-21-2013 01:04 AM - edited 05-21-2013 01:12 AM
Okay. So if you haven't paid, and your financial outlook has improved, then I see no problem with contacting your creditors to try to work out a payment plan. However, like another poster said, not all creditors will work with you. Before I did Chapter 13 I used Consumer Credit Counseling Services. Many of the creditors stopped interest charges and/or allowed me to lower my payments. However, about 10% of my creditors(I had a lot of them) would not budge. On that note, it is better to do it yourself than to go through a company. CCCS did not inform me that one of the creditors didn't agree. I continued making the payments to CCCS, thinking everything was good with all creditors, but ended up being threatened with collections by one of my creditors.
As far as the bankruptcy, it is noble that you want to pay them off 100%. Just be aware, that feeling is not going both ways. with a Chapter 13 bankruptcy, you will probably end up paying a majority of your debt. If you were in the habit of only making minimum payments and/or missing payments, then they have probably collected more in interest and/or late fees than what you originally borrowed. With a Chapter 13, interest stops and you only pay off the creditors based on how much much the court determines you can afford monthly.
You will also find that in a Chapter 13, you will get in the habit of only using cash. In the future this might make a HUGE difference in your life. The Chapter 13, changing my spending habits in combination with a job change enabled me to retire early at the age of 47. I don't think the different job with higher salary alone would have enbabled me to be in my current situation. JMHO
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