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Chapter 13 encouragement

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tipofthespork
Contributor

Chapter 13 encouragement

So I have talked with an attorney and my wife and I don't qualify for a chap 7 die to income. I meet with my attorney Tuesday to pay the deposit and get the ball rolling.
My biggest fear is all the horror stories I've read on here. Our net monthly income is $7500. We owe about 80k in a secured(2 cars) and unsecured debt. I imagine we will be on a 100% plan.
I'm trying to guess at what our monthly payments will be.
I just can't imagine spending 5 years in a plan with no left over money.
I guess I'm getting cold feet about the whole thing but if anyone has any advice or success stories I'd appreciate it very much.

Starting Score: 574(may 2012)
Current Score: 574
Goal Score: 640 (to start)


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Message 1 of 6
5 REPLIES 5
DaveInAZ
Senior Contributor

Re: Chapter 13 encouragement

Well, with that income that amount of debt doesn't seem insurmountable - what is driving your thinking that you should file BK? Are you behind in payments and concerned about personal judgements & garnishsment from the CC debt, and/or in danger of losing the cars to repo? As you said, under a Ch13 you'll repay most it not all that debt. Have you tried neogotiating directly with creditors or through a credit counseling service to lower the interest rate and/or payments so that repayment is more manageable without a BK affecting your credit and life for the next 10 years? I did a no asset Ch7 in 2010, but if I had had income such that I would have had to do a Ch13 I would have taken up on several creditor's offers to repay half the debt for settlement in full. My credit would have taken a hit as those accounts would have been listed as charge off, but the hit wouldn't be as bad as a BK.

Message 2 of 6
tipofthespork
Contributor

Re: Chapter 13 encouragement

The problem we are facing is the minimum payments. We are about 6 months behind on half our bills. Kept up on all the "major ones". Our cost of living is 4k of that 7500. Once we pay the majors and living costs we are out of money.

Starting Score: 574(may 2012)
Current Score: 574
Goal Score: 640 (to start)


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Message 3 of 6
Anonymous
Not applicable

Re: Chapter 13 encouragement

Quit your job long enough to qualify for BK7.

Message 4 of 6
tipofthespork
Contributor

Re: Chapter 13 encouragement

I'm military so that's not an option. It's one of those jobs you can't quit.

Starting Score: 574(may 2012)
Current Score: 574
Goal Score: 640 (to start)


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Message 5 of 6
mynameainttracy
Established Contributor

Re: Chapter 13 encouragement

I have seen extremely varying payback plans for 13's through reading these and other message boards. What I have learned is that it really depends a lot on the local bk trustee that you have.

 

We were in NC where the trustee was very filer friendly. He was all about helping the filer get back on their feet. We only paid some back taxes, our attorney fees and a car inside our plan and the plan was for 48 months. We paid zero to unsecured creditors. He let us get better paying jobs without increasing our plan and didn't touch any bonuses or tax returns. If you have to file bk it is by far the best place to do it. Then I have heard about cases where the trustee makes your life miserable and takes every cent they can get.

 

Your attorney should know about your trustee's tendencies and be able to ease your mind if possible. You should ask them this stuff before hand so you know what to expect long term.

Message 6 of 6
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