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Math_Rocks
Posts: 485
Registered: ‎05-11-2007
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Journey through Chapter 13

I'm starting a new thread here with the intention of describing our experiences with Chapter 13 bankruptcy.

 

More than two years ago, we realized that we were in over our heads with debt and signed up with a Debt Management Plan (DMP). We owed almost $50,000 in credit card debt on 17 accounts. The DMP was able to negotiate with all but 1 of them, which we continued to pay outside the plan. We have struggled and fought our way since then and have paid off more than $20,000 just in credit card debt. We're very proud of what we have paid off but we have been neglecting legitimate needs of our family and getting further and further behind because DH lost his overtime at work and the DMP payments are just way too high.

 

We met with a BK attorney a couple weeks ago and discussed our options and decided last night that this is the best option for us. We will not qualify for a Chapter 7 since our income is too high so we expect to file Chapter 13 and will probably have a five year repayment plan. I will let you know of some of those particulars as we go along.

 

We are filing with almost $30,000 in credit card debt, $75,000 in student loans, and about $18,000 in car loans. Oh, and almost $5,000 in federal taxes that we owe from last year and this year. (Finding out that we owed $2200 this year was one of our final straws.) By canceling payments on things, I was able to come up with the $500 to retain our attorney and the rest of the fees will be rolled into the BK. After paying, I was told that the next step is credit counseling, the fee for which was included in that $500. I know it is required but the credit counseling seems rather absurd to me. At least we will be able to do the course online. 

 

Well that is as far as we have gotten. I will appreciate your thoughts and encouragements along the way.

Filed Chapter 13 bankruptcy 04/12 after two and a half years in a DMP. So wish we would have done the BK sooner. Live and learn!
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MarineVietVet
Posts: 14,882
Registered: ‎07-14-2009
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Re: Journey through Chapter 13

Good luck to you. As I said in your other post only you can decide what is right for you based on what you know at the time. But going forward don't second guess yourself. Don't look back. That will only slow down your progress.

 

Come here any time you need support or advice or encouragement. It's a sometimes long journey but it can be done.

Moderator Emeritus
beamMEup
Posts: 4,470
Registered: ‎12-31-2008
0

Re: Journey through Chapter 13


Math_Rocks wrote:

I'm starting a new thread here with the intention of describing our experiences with Chapter 13 bankruptcy.

 

More than two years ago, we realized that we were in over our heads with debt and signed up with a Debt Management Plan (DMP). We owed almost $50,000 in credit card debt on 17 accounts. The DMP was able to negotiate with all but 1 of them, which we continued to pay outside the plan. We have struggled and fought our way since then and have paid off more than $20,000 just in credit card debt. We're very proud of what we have paid off but we have been neglecting legitimate needs of our family and getting further and further behind because DH lost his overtime at work and the DMP payments are just way too high.

 

We met with a BK attorney a couple weeks ago and discussed our options and decided last night that this is the best option for us. We will not qualify for a Chapter 7 since our income is too high so we expect to file Chapter 13 and will probably have a five year repayment plan. I will let you know of some of those particulars as we go along.

 

We are filing with almost $30,000 in credit card debt, $75,000 in student loans, and about $18,000 in car loans. Oh, and almost $5,000 in federal taxes that we owe from last year and this year. (Finding out that we owed $2200 this year was one of our final straws.) By canceling payments on things, I was able to come up with the $500 to retain our attorney and the rest of the fees will be rolled into the BK. After paying, I was told that the next step is credit counseling, the fee for which was included in that $500. I know it is required but the credit counseling seems rather absurd to me. At least we will be able to do the course online. 

 

Well that is as far as we have gotten. I will appreciate your thoughts and encouragements along the way.



Hi Math Rocks,

I'm a little lost.  Why is it that the credit counseling seems rather absurd to you? 

Just puttin' syrup on something, don't make it pancakes.
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FrugalRican
Posts: 2,876
Registered: ‎02-02-2012
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Re: Journey through Chapter 13

Hey, Math. I'll be checking in here regularly to see how you are doing.

Keep your head help up high!

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Math_Rocks
Posts: 485
Registered: ‎05-11-2007
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Re: Journey through Chapter 13

beamMEup, I didn't mean anything bad by my comment about the credit counseling. I feel like we did that when we started with the DMP, then took the Financial Peace course, and, since then, we eat, live and breathe budgets. I just feel like taking another credit counseling course is overkill but I am open to learn something new. :smileywink: Do you feel like the counseling was beneficial when you took it?

 

Thanks for the well wishes, frugal.

 

I am already anxious to find out what our payments will be and get started. Patience is not my strong suit, lol. 

Filed Chapter 13 bankruptcy 04/12 after two and a half years in a DMP. So wish we would have done the BK sooner. Live and learn!
Regular Contributor
Comet21
Posts: 204
Registered: ‎08-29-2007
0

Re: Journey through Chapter 13

The Credit Counseling is very simple. It can be taken online and will not take much time. There is beneficial information but do not stress that it is going to be time consuming because that is not the case at all.


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beamMEup
Posts: 4,470
Registered: ‎12-31-2008
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Re: Journey through Chapter 13


Math_Rocks wrote:

beamMEup, I didn't mean anything bad by my comment about the credit counseling. I feel like we did that when we started with the DMP, then took the Financial Peace course, and, since then, we eat, live and breathe budgets. I just feel like taking another credit counseling course is overkill but I am open to learn something new. :smileywink: Do you feel like the counseling was beneficial when you took it?

 

Thanks for the well wishes, frugal.

 

I am already anxious to find out what our payments will be and get started. Patience is not my strong suit, lol. 


That requirement wasn't in place at the time.  I think it's potentially beneficial for everyone who takes it - I would have been happy to take it at any time.  

 

It seems a small price to pay for the opportunity to file CH 13 .  To me, CH 13 is a benefit to the filer and a kindness from the filer's creditors.  In my case, all my creditors were paid, but they lost interest and sometimes had to wait years before being paid via the trustee.  I figure I owed whatever the plan required of me.  If it involved eating a little humble pie, hey! so be it and thank you kindly.  :smileywink:

Just puttin' syrup on something, don't make it pancakes.
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Math_Rocks
Posts: 485
Registered: ‎05-11-2007
0

Re: Journey through Chapter 13

Just finished the credit counseling. It took the law firm a couple days to send us the link for the online course and when they sent it, the subject line read "credir couseling". Should I be worried?

 

The counseling was painless but I cannot guarantee that we didn't roll our eyes a few times. What I did find interesting was when they compared our budget items as a percentage against what they "should" be. For instance, they said that transportation should be no more than 18% of our income and ours is 28%. We knew that ours was high due to the fact that we do not have any public transportation here and DH has to drive 70 miles each way to work. Our food and utilities were high too but I think the food figure was high because I included in that all the things we buy at Walmart, including laundry detergent, toilet paper, etc. Not really sure why the utilities were considered high. We are not consumption hogs and there is not much that we can do about that area of expense. So, all in all, it didn't take a lot of time (about 60 minutes) and it had some interesting information. And I definitely can see why people should be required to take the course since not everyone will do their research about all the options like we have and I do think all the options should be considered before making this decision.

 

So, now we wait for the list of documents the firm needs to work on our filing. We are really hoping this only takes a "few weeks" like they said. It would be great to be filed before the end of the month.

Filed Chapter 13 bankruptcy 04/12 after two and a half years in a DMP. So wish we would have done the BK sooner. Live and learn!
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Math_Rocks
Posts: 485
Registered: ‎05-11-2007
0

Re: Journey through Chapter 13

It took almost a week, but we finally got a list of the documents that we need to submit for our case. I'm astonished by how much paperwork we need to gather but DH thinks we can manage to gather it all in a couple hours. We will work on that tomorrow night and then need to figure out how to get it all to the law firm. It seems like way too much to fax or scan and email. (The office is in another city, 45 minutes away.) Not sure if one of us will need to take time off work to drive it in.

 

But I'm glad that things are moving along. We hope to file before the end of the month. Anyone know how likely that is?

Filed Chapter 13 bankruptcy 04/12 after two and a half years in a DMP. So wish we would have done the BK sooner. Live and learn!
Established Contributor
aussiesareforever
Posts: 741
Registered: ‎10-04-2010
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Re: Journey through Chapter 13

Probably likely. I filed a few years ago so it is not too fresh in my memory but I remember that the biggest delay was just getting enough money together to pay my lawyer. I was able to file as soon as I could pay his bill. However, I filed a Chapter 7. Not sure how much more time a Chapter 13 would take.......

BK in 2008, after making very stupid financial decisions.

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