topic Chapter 13 questions in Bankruptcy

Chapter 13 questions

Anonymous — Mon, 02 Sep 2019 14:11:05 GMT

I’m going start by apologizing for the long post.

I am in debt, a lot of debt. All unsecured except my car.

I called a bankruptcy attorney and they said I qualified for a Chapter 7 and advised me to stop paying my bills. I had been current to that point but would run out of funds within 2 months.

I then went to meet with the attorney and when filling out the paperwork they said based on income I would not qualify for a 7 because of OT within the last 6 months. They did say because of my 401k loans I still may qualify but it is doubtful. They are going to file it as a 7 but may have to convert to a 13.

The 13 gives me anxiety. I don’t know what to do if my 7 gets turned down.

Should I go with the 13 or deal with the creditors on my own?

The 13 would be for 5 years. How does a person survive with a 13?

Can I do anything for myself in that 5 years? What if I get a raise? What if I get a 2nd job? I’m overwhelmed and feel like such a loser.

Re: Chapter 13 questions

Jnbmom — Mon, 02 Sep 2019 14:17:25 GMT

Welcome to the boards

First and foremost, you are not a loser, life happens . There are many of us here that have been down that road, whether it is because of job loss, medical debt or overall being overly extended. Its happen to the best of us.

I would suggest you list all your debt/ balances and income range and expenses,then we may be able to guide you a little better.

Re: Chapter 13 questions

Anonymous — Mon, 02 Sep 2019 14:30:05 GMT

Total Debt approximately 65,000
Monthly Income 5,400 with OT

Re: Chapter 13 questions

despritfreya — Mon, 02 Sep 2019 14:34:34 GMT

@Anonymous wrote:
I then went to meet with the attorney and when filling out the paperwork they said based on income I would not qualify for a 7 because of OT within the last 6 months. They did say because of my 401k loans I still may qualify but it is doubtful. They are going to file it as a 7 but may have to convert to a 13. . . Should I go with the 13 or deal with the creditors on my own? The 13 would be for 5 years. How does a person survive with a 13? Can I do anything for myself in that 5 years? What if I get a raise? What if I get a 2nd job? I’m overwhelmed and feel like such a loser.

The first thing you need to do is take the emotion out of it. As the prior poster indicated, you are not a "loser".

Have you discussed with your attny waiting to file until some of the overtime months drop off? During the wait you do not work overtime. Maybe you will find a window where you do "qualify".

I agree that it is unlikely you can use the 401k loan payback as a line item for the means test. Such a line item is used on Schedule J (your true monthly expenses) and will impact your Plan payment should the loan be fully repaid within the 60 months of a Chapter 13.

If the US Trustee moves to dismiss or convert the Chapter 7 due to "abuse", you will need to evaluate whether or not your Plan payment is manageable. That is down the road and not to panic over today. You will work with your attny to formulate an acceptable budget for an acceptable Plan payment. If the monthly payment is not "acceptable" you can elect to dismiss the Chapter 7 and then wait until you "qualify".

Bottom line - this is a process. Let it unfold and, if the Chapter 7 does not fly, work with your attny to maximize your goals and formulate a budget that allows you to breathe. It sounds like he/she knows what he/she is doing.

Des.

Re: Chapter 13 questions

Jnbmom — Mon, 02 Sep 2019 14:46:32 GMT

@Anonymous wrote:
Total Debt approximately 65,000
Monthly Income 5,400 with OT

Can you give more details.

List your creditors and balances and your monthly expenses Your income may put you in a 13, but hard to say without knowing the full picture.,