Please Help...

[emarellano]

We just tried to file for Chapter 13 and found out today our payments will be way too high. We have not been paying our credit cards and had a foreclosure in the mean time.

What are our options? I am thinking we need to contact the mortgage company to work out a payment plan and not worry about the credit cards.

Can credit card or mortgage companies garnish wages? I live in Colorado.

Thank you for your help!

[woeisme]

In colorado 75% of your wages are exempt (more if you are a very low income debtor, but sounds unlikely if you were thinking CH 13). The credit card companies, etc. can therefore get judgements to go after up to 25% of your wages.

Have you talked to more than 1 lawyer about your CH 13 filing? The amount you pay has plenty of wiggle room depending on how good your lawyer is and how flexible your local trustee is, so I wouldn't just do a single calculation of payment amount and take that as a fixed amount that can't be changed. Is the amount you'd be paying in CH 13 more than 25% of your wages? Even if it is close to 25%, the advantage of BK is that in 5 years you are done, compared to garnishments that can continue forever and ever until they get all their money (while adding interest and court costs and lawyer fees, etc.) My husband had a judgement against him for $6500, and they garnished his paycheck for over 5 years before we filed BK. Know how much he still owed when we filed? $6200! It was worse than paying the minimum on a credit card, in terms of the balance never coming down.

[emarellano]

We payed the lawyer over $2,500 and found out we can not afford the payments. We are really mad at the lawyer for not letting us know the payment will be that high. But we are more mad at ourselves for getting ourselves in all this trouble.

I do not want to keep paying lawyers to find out our payments will be too high. I will see if there are any lawyers out there that will give me a estimate before giving them any money but so far I have not ran into any.

Thank you very much for your input.

[Mickey77]

check with a lawyer about "debt negotiation." You can make deals, especially now, thru a lawyer, to get your debt reduced without bankrupcty. my lawyer is looking to get the amount I owe reduced by 70% if I give a lump sum payment. If you don't have up front money they can work out a payment plan. I believe that the attorney "threatens" the creditors that you are going chapter 7 and will getthey nothing and let's settle it outside of bankruptcy. I think the lawyer can also help with your bank about your mortgage also.