@masscredit wrote:I spoke with a bankruptcy attorney today. After going over my info, he strongly suggests that I file CH13. He said he'd send me on my way if I really want to do a 7. Two reasons are my income. I'm self employed with a lot of expenses/deductions. I don't have the best paperwork when it comes to those. He said that could cause a problem because they like to see everything layed out very nicely from A-Z. And also, I have a high amount of credit card debt (about $150K that includes building late charges and fees). He said they get very picky after about $100K so they'll throughly dig into everything. It might not be worth the headache. Especially if I can't satisfy what they are looking for. They could push it to a CH13 anyway.
I'd be looking at payments for 3 years. Based on his calculations, he's suggests we offer $200-$250 per month. I wasn't planning to go this route but I think $7200-$9000 paid over 3 years will be worth the greatly reduced stress. I have two cars. One is paid and one has a loan. I won't have to worry about those.
A benefit is CH13 will only stay on my reports for 7 years. Most of my cards are coming up on 6 months since the first missed payments so everything will fall off around the same time. I currently have two open cards with a zero balance (DCU and Merrick). Is there a chance those cards might not be closed? And if they are, can I apply for new credit after the CH13 balls starts rolling? I'm not looking to get cards to have balances hanging. I'd like to start rebuilding as soon as possibly with the first goal being the 680 range (my EQ08 somehow increased 25 points to 507). The other reason why I'd like to have a card or two is for the buyer's protection securiety when making purchases. Plus a card is needed for some reservations. I'll get a secured card if that's my only option for awhile. My new way of life is to only make a purchase if I have cash to pay for it. Well, unless it's a car.
Is there anything else I need to know about Ch13? Maybe things that I don't know I should know?
And people sometimes ask how much. The cost for mine through this attorney will be $1600 plus fees so about $1920 total.
Hmmm, lots of disconnects with what I *think* I know about Chapter 13s and what you were told. The points which immediately jump out at me are:
- "He said they get very picky after about $100K so they'll throughly dig into everything."
- I've never heard anything like that (not saying it isn't true); I look forward to hearing other comments on this.
- "I currently have two open cards with a zero balance (DCU and Merrick). Is there a chance those cards might not be closed?"
- There is a "chance", but I wouldn't bet on it.
- "And if they are (closed), can I apply for new credit after the CH13 balls starts rolling?"
- It depends upon where you file as there are different rules for different localities. Just north of you here in New Hampshire, no credit without Trustee approval for the life of the Chapter 13.
- "I'll get a secured card if that's my only option for awhile."
- I wish I'd known about secured cards during my Chapter 13; I ended up going nearly two years before I filed and then the full five years of my bankruptcy living off my debit card.
I am not an attorney but I doubt you can get away with 3 years at $250 per month on over $100k of credit card debt.
If you only have $250 left over in income, you should be close to chapter 7.
What is your income you pay taxes on?
Family size?
State?
Honestly with everything you list, I don't know why your attorney categorically refuses to go the Ch7 route. I think you should talk to at least one more attorney because just like with doctors, getting a second (or even third) opinion is worth it. Plus most attorneys first consultation is free of charge, so it makes it doubly worth it (IMHO).
@masscredit wrote:Another queston about CH13. I believe the trustee gets 10% of the amount paid. So in my case, if I'm playing $250 per month, the trustee will get $25. That leaves $225 to be devided between 14 creditors. Actually, them and one divorcee attorney that really sucked 10 years ago. So they are each getting $15. per month which is $540 total. Is that correct? And if it is, the divorce attorney will be getting more than I actually owe her which is $480.
I'm pretty sure in a Chapter 13 scenario, unsecured creditors only get what they claim; if your divorce attorney claimed $480, then that's all she'll get and the rest of your money will be divided up amongst your other unsecured creditors.
@masscredit- I'd get a 2nd opinion something sounds off.
Wish I was given $250mo pay during my 5yr of BK 13.
- My attny was about $2300 bucks
- Trustee was paid $3100
Each year my plan graduated to higher payout. Originally I was on a 3yr plan paying about $2600 then i was laid off and play readjusted.
