Lawyer recommened Chapter 13

[badgambler]

First lawyer I went to suggested 13 instead of 7.. Lawyer feels that since my debt came from gambling that we would most likely be dismissed.. Also his fee for 13 is $1500 while 7 is only $1000 not including filing fees.

Couple questions..

Is there a set min you must be able to pay back to your creditors to qualify for 13? Example.. I owe 100k I have disposable monthly income of $125 is this enough to qualify for BK 13.. Or would they be happy with the $125 instead of nothing..


A little background on my situation. The reason for my BK is gambling. I have been attending meetings for a little over two months through G.A. and also on medication through a psychiatrist. My gambling came to a end the first week of Jan of this year. I slipped a few times after my initial treatment started. My wife and I have also taken steps to remove any way for me to obtain more funds. I have maxed out all my credit cards, totals nearing 100k of unsecured debt. Which I have had to stop paying on due to the amount of the min. payments being asked. Total number of creditors is around ten to thirteen. None have been discharged or sent to collections at this point.

While only making 47k a year to support a family of five. I do not see many options for myself to help protect my family other than BK. I have two step-children out of the five of us which my wife receives $600 monthly from her x-husband. My wife does not work outside of the home. I have in the past ran my cards up to 45k and paid them off through a home equity loan, also a result of gambling. Finally came down to me admitting I could not control it myself and seeking help. This as I am sure you have heard many times is the low point of my financial life. If still single I would work towards paying my debts off as that is the way I have been raised. However, at this point in time. I have to protect my infant son, step-children, and my wife who has stood by me through this ordeal.

Our home also has less then 15k worth of equity in it as we just moved in the property in Jan of 2005. Also my SUV is about 10k upside down so no equity there either. Both my home and car payments have never been late. I am looking to file alone and not include my wife in my bankruptcy. I have been at my current job for over 10 years located in Carol Stream.

I am 60 days or so out from my last charges on my cards. I know I am not filing for a few months at this point.. I was unable to pay the min payments for more then a month after I stopped gambling. Just could not do it and maintain household bills. The $100k was amassed within the last 6 months or so..

[FilingOnMyOwn]

Wow that is a quite a story. If you do actually have $125 a month left over, they most likely would take it yes a chap 13. Before you file you need to eliminate that disposable income through what is allowable. Increase your medical/dental insurance coverage, or your auto insurance. Perhaps you claimed conservatively in some of your expenses, like food or utilities. Use what is allowed for these expenses, as you probably don't really have $125 in disposable income. If you are that close to a 7, you definately don't want to be trapped in a 13. And you should probably hand over all the finances to the wife, if you're having this gambling problem. Also you may need to wait a few more months before you can do anything, so that at least 6 months has passed without any gambling debt.

[badgambler]

Wow that is a quite a story. If you do actually have $125 a month left over, they most likely would take it yes a chap 13. Before you file you need to eliminate that disposable income through what is allowable. Increase your medical/dental insurance coverage, or your auto insurance. Perhaps you claimed conservatively in some of your expenses, like food or utilities. Use what is allowed for these expenses, as you probably don't really have $125 in disposable income. If you are that close to a 7, you definately don't want to be trapped in a 13. And you should probably hand over all the finances to the wife, if you're having this gambling problem. Also you may need to wait a few more months before you can do anything, so that at least 6 months has passed without any gambling debt.

Thanks for taking the time to reply.. I think the lawyers main concern is the disputes that he feels will be filed by my creditors if I were to file chapter 7. He made it seem like they hardly push the "fraud" issue in a 13 as the do in 7's with gambling being the main factor... I will be waiting until June/July before I file.. So that will be a strong 5 months with no activity on any credit cards.

As far as my gambling.. My wife has been a rock.. She has taken over all bills and I just hand her my paycheck.. All the credit cards are maxed out.. But we still cut them up together.. I closed my checking and saving accounts.. and I am not the type of gambler who would bounce a check on a closed account.. I am doing G.A. meetings and found a sponser who I can talk to.. Also on meds through a shrink..Still get that twinge from time to time.. But instead of doing it.. I call my wife and tell her.. I came very close to lossing her.. Still in awe at what gambling did to me while I was going through the frenzy.. The pain I caused.. My god.. She is one hell of a woman.. Working my best at being the best husband I can be.. She has put up with enough from me for a lifetime..

[SinkingFast]

Between $100 and $166/month in disposable income, the Means Test would check to see if you can pay back 25% of the debt. Which, from what you've said, you obviously can't.

There is no minimum payback amount. If you have enough disposable income, you go Ch 13. Simple as that. One attny didn't even do the Means Test on us. If he had, he would know we are under the Median. He immediately went to a Ch 13 plan and gleefully announced we'd only have to pay $197/month for 5 years in plan payments. Take out the Trustee's fee, and that's not even a 5% payback level on our CC debt.

Does the $125/month include a deduction for the Trustee's administration fee?? I didn't include that on our Means Test as I didn't know exactly how to calculate that. We came up at $115/mo disposable income and attnys have said the Trustee's fee would eat that up. Our fee here is 8.5%/month, which would amount to about $75. That makes our disposable income really more like $40/month.

If you wait long enough, the gambling debts shouldn't be an issue. You are in treatment and that's a positive sign to the Court. While Creditors may care how the debt was accumulated, and complain because it's gambling versus groceries, the Court doesn't judge that way. Debt is debt, unless it's luxury things like frivolous vacations, lavish jewelry and furs, and such. Gambling is an illness. If you have acknowledged your problem and are seeking treatment for it, the Court will take that into consideration.

My guess is, your attny has suggested Ch 13 so you can keep your home and your car. Ch 7 is "liquidation" BK. You would have to be current on payments on both in order to reaffirm the house and the car. Since you are in arrears on both, you would loose both your car and your home in Ch 7. With a Ch 13 plan, your attny can structure your arrears on you home, and possibly your auto loan into the plan payments. Allowing you to catch up on both without having to come up with money out of pocket to make up the arrears.

[badgambler]

My guess is, your attny has suggested Ch 13 so you can keep your home and your car. Ch 7 is "liquidation" BK. You would have to be current on payments on both in order to reaffirm the house and the car. Since you are in arrears on both, you would loose both your car and your home in Ch 7. With a Ch 13 plan, your attny can structure your arrears on you home, and possibly your auto loan into the plan payments. Allowing you to catch up on both without having to come up with money out of pocket to make up the arrears.

Thanks for responding..

I have never missed a payment on either my home or car notes. I am current on both my first mortgage and HELOC loan (paid off a previous 45k gambling debt). Also current and never late on my car loan. Home I have less then 15k worth of equity and the car I am 10k upside down on.

It almost sounds like the attorney is affraid of the gambling debt or the possible objections brought by my creditors. Heck if you owe a credit like Chase 50k as I do(between three cards issued by chase... They are going to object pretty much on anything..

[SinkingFast]

Thanks for responding..

It almost sounds like the attorney is affraid of the gambling debt or the possible objections brought by my creditors. Heck if you owe a credit like Chase 50k as I do(between three cards issued by chase... They are going to object pretty much on anything..

I hear ya about Chase. We only had 1 to start with. In the recent round of Bank mergers and buy-outs, we wound up with 3. And the total is up there as well.

If you're current on your car and mortgage, then wait as long as you can to file. Put as much time between yourself and the charges as you can. Stay in treatment and stay away from the Casino's.

If your disposable is that low, and you don't have any other assets that you cannot exempt, why not go for a 7?? If your disposable is low enough on the Means Test, Creditors cannot object to you filing a Ch 7. That's New Law. They, creditors, may object to charges, but they can't object to your BK. And, if your in treatment, the Court will see that as a favorable sign.

Have you seen more than one attny?? If you haven't, visit several more. Get more opionions. You'll also learn more about the whole process from each different attny you chat with.

[badgambler]

Have you seen more than one attny?? If you haven't, visit several more. Get more opionions. You'll also learn more about the whole process from each different attny you chat with.

Yes this was the first one I saw in person.. Chatted with a few through e-mail who thought chapter 7 was the route.. I am still several months out from filing since the date of my last charges were not all that long ago.. Just trying to get ahead of the game and find a attorney I am comfortable with.


Without a doubt.. I will never be in a casino or online gambling again god willing.. I have learned that I can not "control" it.. But with my wife by my side and a understanding sponsor to talk with.. I am sure this is something I can with time overcome. Plus.. the wife will never give me more then 10 bucks at a time these days.. Which helps.. allot..

[aa06a47]

Badgambler good luck on your treatment. I hope that it along with the help of the bk court, you can get a true fresh start for you and your family.