Weird question on 100% ch. 13 plans

[AMISLANDER]

Just curious about this one.

I was reading in the ch. 13 section about someone that had a 100% payback plan for 29 months...if you're declaring bankruptcy and paying back 100% of your debt...what's the point of declaring a bk?

[SinkingFast]

Maybe they couldn't make the minimums, which include interest?? Doesn't a 13 plan just pay back the principal??

If they paid minimums for the same period of time, they'd still owe nearly the same amount, due to monthly interest charges. Whereas the Ch 13 gets them totally out of debt???

[StaciMM]

Perhaps a situation where time out of work (or other loss of income) leads to someone getting behind on their mortgage & car payments, and then they reach a point where they can pay something each month to catch up-but need to stop foreclosure/repossession.

[13inOR]

I am the person you are referring to, and I can explain! We were in arrears on our mortgage and facing foreclosure due to multiple surgeries on my part... the BK held off the process, got us all caught up, and we paid off our other debts as well. There was no other way of stopping the foreclosure process quickly enough to get caught up. We had more than adequate income to pay our monthly mortgages, we just couldnt catch up all at once. Does that make more sense now? : )

[AMISLANDER]

Gotcha!...

I am the person you are referring to, and I can explain! We were in arrears on our mortgage and facing foreclosure due to multiple surgeries on my part... the BK held off the process, got us all caught up, and we paid off our other debts as well. There was no other way of stopping the foreclosure process quickly enough to get caught up. We had more than adequate income to pay our monthly mortgages, we just couldnt catch up all at once. Does that make more sense now? : )

Because when I first began my bk proceedings, they were trying to put me into a 13...then we realized with my boyfriend out of work, there was no way I would have anything left over after bills...I know in the 13, they try to get you to pay whatever you have leftover....and because bk addresses many different forms/fashions..when I saw 100% pay back..jeez..if you still have the same bk on your credit files & yet you've worked at paying back $$ when those of us who went the ch. 7 route, are let off with our debt...the different degrees of bk should be better explained when you have to deal with situations afterwards for which credit and/or rebuilding of it is necessary...

[13inOR]

I know its confusing, but in our case, losing our house was simply not an option , we had good income by that point, just needed to buy a little time. We have not regretted it all-it gave us time to catch up and save our house.
Our debt was not credit cards really, it was medical and the arrearages on the mortgage. Saving our house turned out to be a really great move especially since the value has nearly TRIPLED in the 7 years since we bought/built it. So, the bk filing was really worth it for us, we would have lost a huge equity investment. It might not be for everyone, but for us it was the only option.

[AMISLANDER]

I know its confusing, but in our case, losing our house was simply not an option , we had good income by that point, just needed to buy a little time. We have not regretted it all-it gave us time to catch up and save our house.
Our debt was not credit cards really, it was medical and the arrearages on the mortgage. Saving our house turned out to be a really great move especially since the value has nearly TRIPLED in the 7 years since we bought/built it. So, the bk filing was really worth it for us, we would have lost a huge equity investment. It might not be for everyone, but for us it was the only option.

Gotcha! No kidding on the house value...it's crazy like that in Florida for sure; houses here in the Tampa bay area have tripled in the last 2-3 years and sometimes quadripled...reminds me of Long Island in the late 80's.