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My BF is in the process of going through a Chapter 13. He has made 3 payments. The schedule is for payments of approximately $400 over a 3 year time span.
I have asked him why is he doing Chp 13 and he said it was because he wanted to keep his car and this way he would have a lower payment. I asked him to consider switching to Chapter 7. I currently have 2 cars (my son was paying the note on one, but he started school last month). My BF can drive one of and I drive the other. We save the $400/month and he can start the credit rebuilding process a lot sooner. Does anyone have thoughts on why else the Chp 13 would be better than Chp 7?
I filed for Chp 7 over 13 years ago but I know the rules have changed a lot since then.
@Wovenyarn wrote:My BF is in the process of going through a Chapter 13. He has made 3 payments. The schedule is for payments of approximately $400 over a 3 year time span.
I have asked him why is he doing Chp 13 and he said it was because he wanted to keep his car and this way he would have a lower payment. I asked him to consider switching to Chapter 7. I currently have 2 cars (my son was paying the note on one, but he started school last month). My BF can drive one of and I drive the other. We save the $400/month and he can start the credit rebuilding process a lot sooner. Does anyone have thoughts on why else the Chp 13 would be better than Chp 7?
I filed for Chp 7 over 13 years ago but I know the rules have changed a lot since then.
This doesn't make sense. In a chapter 7 if you just keep paying on the car after discharge, you can keep it. Also, if you want you can reaffirm the debt, which starts payments showing again on your reports, but most attorneys advise against reaffirming and advise to just keep paying. The lender certainly doesn't want his car back.
Most people file a 13 because their income is above the allowed amount. Did he use a lawyer or do it pro se?
You are right, though, he should convert to a 7 if he is eligible. It is way better than a 13 and his credit could be 720 by the time the three years of chapter 13 goes by.
Thank you for your response. He has a lawyer but not a very good one. The car is so far behind that there has been a judgment granted on it so I think it would take a substantial amount of money to keep the car at this point if it's not included in the bankruptcy. His income limit was very high at one point but he was laid off from that job and now he would fall under eligibility for Chp 7.
He said that when he asked the lawyer about converting to Chp 7 like I suggested, the lawyer said he can, it would just mean the upfront cost of $1500. I think this is worth it since it's the same as 4-5 payments of what he is paying now.