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    New, filed chapter 13 and could use advice

    Hello! My husband and I are filing chapter 13, we have our meeting 341 on January 24
    we had a lot of credit card debt and medical debt from hospitalization, we are not behind on car or house payments, we wanted to do chapter 7 but our lawyer said we would lose at least one of our vehicles most likely as well as some other items my husband uses for his second job ( trailer and trenching machine) so we went with chapter 13
    our first payment to the trustee is incredibly high, our lawyer told us to pay at least half this month and he hopes and can’t guarantee, but is hopeful that this payment is going to go down after the meeting of creditors. I’m so scared. If all these creditors do show up and this payment remains this high? We’re not going to have enough to pay our regular bills and put food on the table. How likely do creditors from credit card places just walk away? I know the medical will probably want something. I’m just so scared I can hardly sleep. We’re in MN
    thanks for any thoughts

    #2
    Hi, and welcome.

    The Ch13 monthly payment is not dependent upon whether or not creditors show up to your 341 meeting; it is dependent upon which creditors file proofs of claim with the court.

    In our case we had nearly 35% of our total credit obligations "erased" by failure of the creditors to file proofs of claim. This included medical bills and major CC companies and banks.

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      #3
      Thank you for your response. So did your monthly payment to the trustee go down? Our lawyer said he believes our monthly payment is going to be way less than this initial amount he’s giving us for January once we have our 341

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        #4
        Yes, the payment went down substantially. We were in a 100% plan.

        HOWEVER

        The process of reducing the plan payment took several months. For about 4 months we paid the higher amount until the Trustee was finished with his part of the process.

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          #5
          All of my junk debt buyers filed proof of claims. All of the secured creditors filed too. The vast majority of my non-JDB creditors filed claims too. For some reason, your lawyer has hope that your results will be a lot better than mine. I guess some of your creditors tend not to file proofs of claim for 13s.

          To keep your property, you have to buy it back from the trustee only capped at 100% payback of unsecured who file proofs of claim without regards to whether you can afford it according to your chapter 13 budget. You either repurchase your non-exempt property or surrender it if using BK. That's the only two options. If all of your unsecured creditors file proofs of claim and you can't afford the payment, you can't afford to keep your non-exempt property. Weigh that against your creditors getting judgments on you outside of BK and draining the equity in your house, your paycheck, and your bank account with their wide array of judgment enforcement actions.

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            #6
            Thank you so much for the information

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