Living life in Chapter 13 versus Chapter 7 - compare experiences

[fileda13]

I am new to this as my Chapter 13 341 meeting isn't until early August (just filed a week ago). So that being said my experience with bankruptcy has just been born.

Others could be in various stages of a 7 or 13 or could be done and could have actually really experienced a 7 and 13. So how do the differences in a 7 versus 13 effect the experiences one has as they travel the path of bankruptcy?

This is almost an impossible question to answer because the facts and circumstances for each of us are different (no two are alike) so it's as much a hypothetical question as one based in reality.

[justbroke]

I've been through both (Chapter 13 for 2 years, converted to a Chapter 7). There is no real comparison. A Chapter 7 is typically done within 90-120 days and there is usually nothing more formal than the 341 Meeting, waiting 60 days, and being discharged. A Chapter 13 can last from 36-60 months, and in some jurisdictions, even longer (depending on how they count "plan" lifetime). A Chapter 13 requires confirmation and that typically doesn't happen for at least 4-6 months and even longer in certain cases!

Think of a Chapter 13 like this; it's like taking 180 credit hours of classes over a period of 4-5 years, and earning your degree. Think of a Chapter 7 like this; it's like taking a single course over one semester in college, and getting that same degree. (Best analogy I could come up with!)

[Cowart69]

I've been through both (Chapter 13 for 2 years, converted to a Chapter 7). There is no real comparison. A Chapter 7 is typically done within 90-120 days and there is usually nothing more formal than the 341 Meeting, waiting 60 days, and being discharged. A Chapter 13 can last from 36-60 months, and in some jurisdictions, even longer (depending on how they count "plan" lifetime). A Chapter 13 requires confirmation and that typically doesn't happen for at least 4-6 months and even longer in certain cases!

Think of a Chapter 13 like this; it's like taking 180 credit hours of classes over a period of 4-5, and earning your degree. Think of a Chapter 7 like this; it's like taking a single course over one semester in college, and getting that same degree. (Best analogy I could come up with!)

This is where I am at. I started out in a Chapter 13 but I am just realizing at less then a year that I just cant do it.....my wifes income is up and down and every time something comes up in our lives we have to rob peter to pay paul to stay afloat in the Chapter 13. The plan is taking so much money out of us we cannot keep up the house we are living in....the car that we agreed to pay on is a gas hog and starting to break down.

What I am wondering is how long can I stay in my house if I decide to convert from Chapt 13 to Chapt 7? I have to save up money to rent.

[justbroke]

I converted and I'm still in my home. I did a modification with the bank. You need to really go through a financial analysis to determine the right thing for you to do.

[jetsfan2010]

This is where I am at. I started out in a Chapter 13 but I am just realizing at less then a year that I just cant do it.....my wifes income is up and down and every time something comes up in our lives we have to rob peter to pay paul to stay afloat in the Chapter 13. The plan is taking so much money out of us we cannot keep up the house we are living in....the car that we agreed to pay on is a gas hog and starting to break down.

What I am wondering is how long can I stay in my house if I decide to convert from Chapt 13 to Chapt 7? I have to save up money to rent.

I was in that situation just a few months in my 13, which is why I made the business(no emotional) decision to go to a 7 and give up the car I had originally included as secured in my case. The fact I was upside down by almost 8k, and it was starting to have costly repairs(transmission replacement etc) made it the smart thing to do.

[moe]

From what I'm reading here, Chapter 13 sounds like a nightmare. I am terrified. I desperately want to keep my house. I just refinanced.

It sounds like they stick you with a huge payment every month--why is it so hard otherwise? And why do they do this anyway? It's like they are setting people up to fail.

[karm43]

I dont know why they make it so hard. Im scared I wont have any money either. From what I hear they take every dollar you have. Desperate need of chap7. It seems if your income goes up they take it and if it goes down they dont care. Considering debt settlement but cant trust these companys.

[IamOld]

karm43 do NOT NON NOT NOT NOT use a debt settlement co - EVER!! If yuo are interested in going down that route, find either a good BK atty who also does that sort of work, or a good consumer rights atty who does that sort of work.

DO NOT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! use a debt settlement co.

Look, spouse is in a 13. Is it easy? No - are WE paying less than before? Yes. As everyone would say, if you are considering a 13 PLEASE PLEASE PLEASE find the best lawyer you can - find someone who won't tell you X Y and Z before going through the "numbers" your OWN situation with a fine toothed comb. He/she may be more expensive, but it is WORTH IT!!!!!!!!!

The thing is, you have to have buy-in from all family members. Look, my situation is is a bit different in that we were living paycheck to paycheck - and them some - so a) we're used to it, b) didn't have time to stop paying cc and save that $$. Also, our atty had the 13 fee payable mostly up front (that can depend on atty) and I'm still saving for my case for Sept. So those are 2 expenses that you may not have.

For us the fact that spouse can't get new credit for 5 years...hehe - not like anyone would have given us credit anyway!

[jetsfan2010]

I am convering to a 7 and I truly believe just broke's analogy is best when it comes to a 13 and a 7. I also believe that getting the most experienced bk lawyer in your area should be top priority. Fees aside, the lawyer you hire to file your BK has your financial present and future 3-5 years in their hands.

[sunshinepa]

JustBrokes's analysis was right on as usual.

I myself am 19 days away from a CH 7 discharge ( barring any problems). However, had it been necessary, I would have done a 13, even wanted to at first because I made the debt. Boy did my attorney think I was nuts because I was below median and could easily make the CH 7. But I, like alot of folks here, thought the right thing to do was pay something back, it was very hard not to do that.

I think a CH 13 can go either way depending on circumstances. Posts here are all over the place, some are happy, some are struggling. What I do know is it would be better than trying to pay those cards off for the next 25 years!!!!

[LadyInTheRed]

From what I'm reading here, Chapter 13 sounds like a nightmare. I am terrified. I desperately want to keep my house. I just refinanced.

It sounds like they stick you with a huge payment every month--why is it so hard otherwise? And why do they do this anyway? It's like they are setting people up to fail.

I dont know why they make it so hard. Im scared I wont have any money either. From what I hear they take every dollar you have. Desperate need of chap7. It seems if your income goes up they take it and if it goes down they dont care. Considering debt settlement but cant trust these companys.

A Chap 13 hasn't been a nightmare for me. It sure beats going to work every day to make minimum payments on cards that may never get paid off. I have more to spend on daily expenses than I did before filing and there is light at the end of the tunnel. Yes, I have to watch my spending and make sure I save every month. But, even if I filed a 7, I would have had to start doing that to make sure I don't find myself in trouble again. The structure of the 13 gives me 5 years to form good habits. Being prevented by court order to incur debt makes it much easier to resist the temptation to pull out a credit card when things get rough.

A Chap 13 is hard, but if a plan is not livable it is because the plan wasn't drafted well in the first place, the debtor is not willing to make the needed changes to his/her lifestyle, the debtor is trying to hold onto assets they can't afford, or the debtor has income limitations (combined, perhaps, with non dischargeable debt) that a BK can't help or experiences a decline in income during BK that makes it impossible to come up with a feasible modified plan. As already said, it is important to get the advice and assistance of a good BK attorney to make sure you don't get into a Chap 13 plan you can't complete. That may include fighting for a Chap 7 if you are on the boarder for qualifying.

[karm43]

Thanks for advice

[moe]

Would your house be an asset you can't afford? You mean I can't get my actual mortgage included in my allowable expenses but I have to get the standard amount of the mortgage.

Then I'm totally screwed. I have to keep my house.

[LadyInTheRed]

Would your house be an asset you can't afford? You mean I can't get my actual mortgage included in my allowable expenses but I have to get the standard amount of the mortgage.

You can include your actual mortgage expense. But, in order to show they have a feasible plan, some people will reduce their Schedule J expenses to an unreasonably low level. If you have to do that to keep your house, you can't afford your house.

Then I'm totally screwed. I have to keep my house.

That's the kind of attitude that will doom a 13 if you truely can't afford your house. I don't know the details of your situation, but I can't think of any situation where somebody would have to keep their house.

[justbroke]

Would your house be an asset you can't afford? You mean I can't get my actual mortgage included in my allowable expenses but I have to get the standard amount of the mortgage.

Yes, your actual mortgage including taxes and insurance are allowable expenses.

I don't understand the phrase "I have to keep my house". If it's not actually financially feasible, not only do you "have" to keep your house, you pretty much won't be allowed to. The numbers must work in a Chapter 13.

Or, am I misunderstanding your statement Moe?