Chapter 7 vs. Chapter 13

[kclayton74]

Please forgive me for the stupid questions. When, Why and What do you call the office of clerk for? Also why does it take so long for Chapter 13 to get discharged (after last payment) vs. chapter 7? I also notice there are more responses in the Chapter 7 board than there are in the Chapter 13. Maybe I should have filed Chapter 7 instead. I wanted to know does anyone feel any different filing Chapter 13 but wish they could have gone Chapter 7? Chapter 13 can be a long process but you do survive it.

[originalhealer]

Well, I can't answer most of your questions, but I was in a Ch 7 and had to convert to a Ch 13 to save some of my secured items, though I am not yet a homeowner. It is much better to file Ch 7 if you qualify, but if I could do it all over again, I would have never bought a car in the first place. The bus was better than bankruptcy.

Having said that, a Ch 7 is ideal. The only benefits that I can see in filing a Ch 13 is to save your secured debts (including a home), being able to get a home with an FHA mortgage within one year of making your payments on time (instead of two years after a Ch 7), and possibly looking better on future credit applications because you are actually making an effort to pay your debts (and the good feeling that comes along with that).

[JayGZ]

I have a question. How could you get a get home after filing a chapter 13?
If all of your discretionary income is paid to the trustee, what would be left over for moving expenses, and setting up utilities again and such?

I ask because I may be doing a chap. 13.

[originalhealer]

You absolutely can purchase a home or get a second mortgage (refinance) while in a Chapter 13. You have to live somewhere, right? I guess one would have to do whatever they need to make sure that they have their moving expenses and setup expenses as low as possible. What I plan to do is move locally. In addition, any extra work I do, I will receive the money first, and if I can justify the expense for a short time (like working a second job for only one month), and I spend the money on moving expenses, no one will be the wiser. But if anyone asks, I could have proof that I moved and the money was used for that purpose.

In fact, in a Chapter 13, or in any situation for that matter, you need to have a savings account with money for emergencies. What if someone dies in your family, and you have to fly home for the funeral? What if your car breaks down and needs a new timing belt, brakes, etc.? What if you don't have medical insurance and you get sick? I plan to have about $500 - $1000 eventually saved up for emergencies (and moving expenses if needed).

[JayGZ]

So does that mean before your BK is final, you plan to have $500-$1000 in your Savings acct.?

[originalhealer]

You mean after my confirmation hearing? Because I'm in a Ch 13. As far as the savings is concerned, I have asked this question before, and I was told that you CAN have a savings account while in a Ch 13. But I'm not totally sure of how much. I do know that I would like to have about $1000 for emergencies. So, the answer is yes.