topic Re: Journey through Chapter 13 in Bankruptcy

Journey through Chapter 13

Math_Rocks — Wed, 04 Apr 2012 00:45:40 GMT

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.

Re: Journey through Chapter 13

MarineVietVet — Wed, 04 Apr 2012 01:04:15 GMT

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.

Re: Journey through Chapter 13

Anonymous — Wed, 04 Apr 2012 15:39:06 GMT

@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?

Re: Journey through Chapter 13

Anonymous — Wed, 04 Apr 2012 15:46:20 GMT

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

Keep your head help up high!

Re: Journey through Chapter 13

Math_Rocks — Wed, 04 Apr 2012 19:53:47 GMT

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. 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.

Re: Journey through Chapter 13

Anonymous — Wed, 04 Apr 2012 21:02:13 GMT

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.

Re: Journey through Chapter 13

Anonymous — Wed, 04 Apr 2012 22:06:44 GMT

@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. 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.

Re: Journey through Chapter 13

Math_Rocks — Fri, 06 Apr 2012 02:44:25 GMT

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.

Re: Journey through Chapter 13

Math_Rocks — Tue, 10 Apr 2012 16:07:41 GMT

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?

Re: Journey through Chapter 13

aussiesareforever — Wed, 11 Apr 2012 02:34:38 GMT

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.......

Re: Journey through Chapter 13

Math_Rocks — Fri, 13 Apr 2012 13:48:48 GMT

Thanks, daisydvm. We dropped off our paperwork last night and we had just about everything that they asked for. (We have questions about a couple items.) Today is the 13th; I am hoping that we can file in two weeks, the 27th. Really hoping that this is realistic.

I am also really hoping that they will come up with a reasonable income figure as I have been cutting way back on my second job and we cannot count on overtime at DH's work. He gets it when he gets it, you know? Plus, we just found out about a job here in town that DH is going to apply for and that would really "muddy" our numbers.

Making this decision was so hard. Now I just wish we could get filed as quickly as possible and start moving on.

Re: Journey through Chapter 13

Math_Rocks — Wed, 18 Apr 2012 13:56:53 GMT

Well, it looks like the timing actually was realistic. We go to sign papers on Monday and, depending on if there are any changes made, we should be filed by the end of next week. I know we will see all the numbers on Monday but I am still anxious to know exactly what our payments will be and what kind of income figure they arrived at, i.e. did it include overtime from DH or income from my second job (that I haven't worked at in a month now). Guess we will see.

Re: Journey through Chapter 13

Anonymous — Wed, 18 Apr 2012 14:03:49 GMT

Still hoping for the best with you guys. Keep filling us in on how it is going.

Re: Journey through Chapter 13

Anonymous — Thu, 19 Apr 2012 02:34:04 GMT

@Math_Rocks wrote:
Well, it looks like the timing actually was realistic. We go to sign papers on Monday and, depending on if there are any changes made, we should be filed by the end of next week. I know we will see all the numbers on Monday but I am still anxious to know exactly what our payments will be and what kind of income figure they arrived at, i.e. did it include overtime from DH or income from my second job (that I haven't worked at in a month now). Guess we will see.

I am SOOO close to you in this process. I just completed the online counseling course and we're expecting to file on Friday.

I feel your pain -- let's just get this going and onto the trustee to see if our plan is approved.

I'm not good with patience either, LOL!~

Re: Journey through Chapter 13

Math_Rocks — Thu, 19 Apr 2012 14:23:32 GMT

Whirled, I'm not happy that you are facing BK like us but I'm glad not to be going through this alone. Are you filing Ch. 13 as well? May I ask what led to the filing?

I'm so impatient for Monday and to know all the particulars of our payments, budget, etc.

Re: Journey through Chapter 13

Anonymous — Fri, 20 Apr 2012 03:11:09 GMT

@Math_Rocks wrote:
Whirled, I'm not happy that you are facing BK like us but I'm glad not to be going through this alone. Are you filing Ch. 13 as well? May I ask what led to the filing?

I'm so impatient for Monday and to know all the particulars of our payments, budget, etc.

Yup, 13..

1. I built a house in 2008 and had plenty of money in the bank.. until I had my old house not sell and set vacant for a few months. I wasn't quite underwater, but within a year I would be, as I had to rent it and ended up losing about 200/month on it b/c of increased taxes and insurance. Their rent basically covers the house payment, nothing more.

2. I incurred debt as I was trying to juggle what was left of my money (an inheritance from an aunt), while making sure I had a reserve in case anything happnened to the rental. I went thru that and maxed out CC's.

3. I have a HUGE student loan and altho I was able to defer it for 6 months to get things straight, I didn't get straight enough to handle the $500+ payment/month.

4. I'm a teacher and in lieu of losing jobs and overcrowding our classrooms, we cut the budget by freezing any future raises and actually taking a pay cut two years in a row. We also absorbed more of our insurance costs, so it was kind of a triple whammy.

My mother was trying to help me, but I realized after I missed the first mtg payment that I was on the path to disaster. Like I said before, throwing good money at bad.

I was going to file today but my checkbook was AWOL and although my lawyer is about 10 min from work, he's about 35 from home. So.. Monday's the day.

It is so interesting to see how he thinks I should live and budget my money. He did not believe me that I live on $300 in groceries a month. He didn't believe that my entertainment costs per month were about $10 bucks. I rarely buy clothes anymore 'cept for the obvious, and I definitely didn't need a budget of 50/mo for that stuff.

My charitable donations are in the form of gas money for driving rescue dogs once or twice a month on their road to freedom from euthanasia.. that's my entertainment! I've been to one movie in the past 4 years and I lived it up!! Bought a matinee ticket, went with friends, found a $3 coupon off a drink/popcorn combo and I was set! I'll do it again in 5 years. LOL.

I do not fear this at all. I told my lawyer's secretary today when I ran some stuff over, that I'm going back to my old days of totally living within my means and with cash. On payday I'll go to the atm, draw out 200, and live off of it.. everything. except gas. Meals, dog food, froceries and when it's gone, it's gone. I fill up once a week on gas like clockwork during the school year, so that's 40 bucks a week that will be on the debit card, as I can't imagine paying cash for gas -- plus the temptation to buy something silly while inside would not be pleasant.

PS -- I saw your comment earlier about counseling, did you end up paying $500 bucks? I took an online class for 11 bucks -- checked to make sure they were approved by the DOJ for my district, and got my cert. today.

Re: Journey through Chapter 13

crazynurse123 — Fri, 20 Apr 2012 14:43:59 GMT

I'm also in the process of Ch 13, my case should be filed at the end of the month. I'm kicking myself now since I had looked into it several times, and years ago did a DMP that I wasn't able to complete due the paymetns being so high and job changes. Its nice to know I won't be going through this alone.

Re: Journey through Chapter 13

Math_Rocks — Fri, 20 Apr 2012 15:36:26 GMT

Thanks for sharing your story, Whirled. Again I'm sorry that you are facing this but it is good to know that we are not alone in this. To answer your question, we paid $500 to retain our attorney and didn't pay anything additional to do the credit counseling; the cost for that was part of the $500. The rest of the cost of the BK will be rolled into the payment we make to the trustee. We still don't know what those payments will be but I'm afraid that we wouldn't understand that number anyways out of context of seeing the entire budget that they set up for us. I know I just need to be patient for Monday and then I will understand the whole picture.

I have a lot of student loan debt as well, over $75000. What do you teach? You can probably see by my handle what I teach.

Sounds like Monday is a big day for both of us. Glad that you are aat peace about it. I am too for the most part. I am sad that it came to this but I trulyy believe that our lives will be better as a result.

Re: Journey through Chapter 13

Math_Rocks — Fri, 20 Apr 2012 15:39:59 GMT

Thanks for popping in, crazynurse! Sorry that we meet under these circumstances but glad that we can make it through this together. May I ask what led to filing in your case?

You probably read that we too were in a DMP. In fact, we paid more than $20000 in credit card debt over the past two years. But the payments were too high and we were putting that payment before everything else, including our mortgage, and falling further and further behind, We decided we need to take care of our family first. It was a hard decision but I believe it was the right decision.

Re: Journey through Chapter 13

crazynurse123 — Fri, 20 Apr 2012 16:02:37 GMT

In my 20's I made a great income doing travel nursing, but when it came time to settle down my income dropped, and I finally began to pay housing costs myself rather than receiving it as a benefit of my company. I also have a few years of back taxes due that great income, with nothing to deduct (ie house, children, yadda yadda). Add to that school loans and a few medical bills and it seems like I can't keep my head above water.

My biggest worry is with a 5 year repayment plan doing Ch 13, will I be able to rent a home or purchase a home in the near future. Currently my boyfriend and I are busting out of my one bedroom apt, seeing as we have 3 dogs and 1 cat between us.