Dismissal=Refile or not

[gerald13]

I was in a Ch. 13 for 3 years and recently received a dismissal for nonpayment. My husband had lost his job and things got crazy. By the time I sent in the explanation after receiving the notice to dismiss, I received the order to dismiss. I know that there were many things I could have done like consult my attorney to have it converted. I did not know that things would happen so quickly or that they would reject my explanation with no warning. Well here I am. Lost. I just met with a new attorney since I am in a different state. He basically laughed at the amount of debt that I have. (approx 12000)not including student loans or mortgage obtained while in bk. It seems as though we make enough but we have payday loans and negative bank accounts, past due utilities, new credit card debt. We just can't catch up. Our car was included in the plan and could be repossesed soon. We still owe about 5000 on that. I am unsure of whether or not to file a 7 or 13 or nothing at all. I am mostly concerned about which will affect our credit the most. Does the dismissal restart the ticker on the 7-10 year count? If not, I would like to struggle and pay everything off to rebuild credit. If the ticker is restarted well I may as well get a fresh start with a 7. Also, if we surrender the car without filing for bk again does that look just as bad as filing on the credit report? I just would like to know what is the best option at this point. I do not want to add any more time to the 7-10 year ticker if possible.

[SinkingFast]

The $12K of debt. Is that's what remains based on your Ch 13 Plan Payments? Unless you were in a 100% payback plan, your true debt level could be higher than that.

Once a BK gets dismissed, the Creditors go after the original amount. Not the settlement amount from the Ch 13. Generally, a Ch 13 plan stops all interest from accruing or the Trustee sets a certain %'age for each Creditor. So, your Creditors could add back all lates, penalties, fees, and extra interest. Increasing your debt levels even more.

Since your BK was dismissed, do you know if you were dismissed with or without prejudice. That will determine how quickly you can refile.

There are a couple of places you can check for info on your case.

http://pacer.psc.uscourts.gov/

PACER should have all the info about all the filings in your case. You'll have to register. PACER will assign you a User ID and password. Then you can look at all the filings that have happened in your case.

https://www.13datacenter.com/index.asp

This site has all the info about your Ch 13 plan finances. Shows money that came into the Trustee. Who the Trustee paid. And how much each Creditor got.

[HHM]

Sorry to hear about your situation, it is regretable.

As for the dismissal, it will generally be "without" prejudice so you can refile, and I imagine the attorney you saw probably told you, you generally need to wait at least 180 days from the day of the order of dismissal before you can re-file.

Also, as SF has already pointed out, you probably need to get a better sense of what you actually owe since interest will be updated.

[gerald13]

It was dismissed without prejudice but he did not say that I must wait 180 days to file. Actually, I have about 12000 in new debt, that does not include the debt in the bankruptcy. For that, I had about 7,000 left to pay. I do have a Pacer account but have not looked there yet. I will have to check it out. But what I am most concerned about is the credit reporting of the dismissal. I know it all looks bad but the length of time is important to me since we have already done over 3 years "hard time" I am hoping that the dismissal will not begin the 7 year count again. Well, I guess even if it does, it doesn't matter because I probably will not be able to pay off all of those new fees that go along with the old debt etc.. so I will be forced to file anyway. And then the ticker would restart anyway. Hopeless

[Grace]

I didn't think you were allowed to take on new debt in a Ch 13. How did you get payday loans and credit card debt by the trustee?

[SinkingFast]

I didn't think you were allowed to take on new debt in a Ch 13. How did you get payday loans and credit card debt by the trustee?

People slip up, Grace.

From your comments to various posters here, I'm gonna guess you've never had a financial problem in your life. You probably save money every month.

OK. Let's pretend for just this split second, that your monthly savings are your proposed Ch 13 Plan Payment. PROPOSED. Your attny is filing your plan in good faith that you've committed every penny of disposable income to your Ch 13 Plan.

Now, step back from your own budget, and look at it thru the eyes of a Trustee.

Grace has the premium Cable package. Our Court only allows for the regular Cable package. WHACK. Kah Ching. The Trustee adds $50/mo to your Plan payment there.

Grace spends $600/mo on food. Our Court only allows for Grace's family size to spend $500/mo. WHACK. Kah Ching. The Trustee just added another $100/mo to your Plan payment.

Grace spends an average of $100/mo on clothes. Our Court only allows for Grace's family size to spend $50/mo for clothes. WHACK. Kah Ching. The Trustee just added another $50/mo to your Plan payment.

So now, instead of what you normally save/month, take an extra $200/mo and put it away. Live without the extra $200/mo for 3 years like Gerald did.

Now,.......... Your car breaks down. You've got to have it repaired. The repair bill is $300. You cannot use your savings. Remember,......... Your savings is your Ch 13 Plan payment money. You don't have any family or friends who can afford to "loan" you the money.

If you don't get the car fixed, you can't get to work. If you can't work, you can't pay your Ch 13 Plan payment. So you've gotta get to work.

How do you pay the bill??!!

[Grace]

SF, so trustees allow people to take out payday loans and rack up credit card debt while in a Ch 13? If I remember correctly, you didn't file a Ch 13. You filed a Ch 7. Maybe someone who has Ch 13 experience can help out here.

[SinkingFast]

Read the first line of my response, Grace.

People slip up.

NO, the Trustee does not allow people to get CC's or take on PayDay loans while in Ch 13.

There's only 2 types of debt a Ch 13 filer is allowed to incur during their Plan. A mortgage. And a car loan. Both after you've been in the plan for a year with on time payments. And both with the approval of the Trustee.

The Trustee did not give Gerald permission to take on CC or PayDay loan debt. Gerald just did it.

Like I said,.......... People slip up sometimes.

[HHM]

But what I am most concerned about is the credit reporting of the dismissal.

Frankly, that should be the least of your concerns. You have much more immediate pressing concerns than what your cedit report will look like in 7 or 10 years. If that was a real concern, you would not have let you Chatper 13 get out of control. You need to take a bit of a reality check here, you have a dismissed chapter 13, a possible car repo in the near future, new payday loans (frankly, that was a stupid move, but I think you know that). I think you need to buck up a little and face the here and now.

As for your credit report, so long as you maintian good credit habits, about 80-90% of the negative impact of a BK on your credit report is gone after 2-3 years.

As whether to refile or not, unless you can think of a way to get yourself out of debt in the next 3-5 years that does not involve BK, then you should refile.

[gerald13]

Sinking Fast you are EXACTLY right. When you have kids in this situation(Ch.13) it makes things really rough. Well, we worked really hard to stay on time for 3 almost 4 years making on time payments. I worked so hard to improve are credit during that time. So hard that we were able to purchase a home 1 year after being in the Ch. 13. All of my new debt was after my husband lost his job, tax bills started rolling in, medical and dental expenses,etc.. This dismissal is a hard thing to face when you worked so hard for so many years. You are right though HHM I have to face it because it is done. I will not have the money to get out of debt without bankruptcy. I just used to look forward to the day that I would not have the filing on my credit report. It is my worst nightmare now that the countdown will begin all over again. But thanks for the reality check. I just hope that we can start all over with a 7. After reading all of the posts, it just seems to be a better deal for a fresh start. Thanks so much for all of your responses. You guys are so supportive. I have actually been a lurker for years now. It is so important to have this "support group" for us.

[macsen]

Read the first line of my response, Grace.
There's only 2 types of debt a Ch 13 filer is allowed to incur during their Plan. A mortgage. And a car loan. Both after you've been in the plan for a year with on time payments. And both with the approval of the Trustee.

That's not true. Student loans are permitted and I assure you, debts incurred from medical needs are permitted as well.

[Spartan]

Wait 6 months. Refile Ch7 if possible. And this time, w/o the Ch13 repayment, it will be easier. Don't worry about credit rating. Most people have no problem overcoming that in a few short years. Your focus is on how to fend off the creditors for the next 6 months, and how to live within your income in the future. It should work out ok.

No need to worry about the credit report. If you can get your financial house in order, the problem will simply take care of itself in a few years.

[SinkingFast]

That's not true. Student loans are permitted and I assure you, debts incurred from medical needs are permitted as well.

Those 2 additional types of debt make sense, Macsen.

The first attny we saw figured a Ch 13 plan for us. He's the one who told us the only new debt WE could get would be a mortgage and possibly a car payment if needed. So I guess I should qualify that remark.

[gerald13]

Thanks Spartan you are right. I am a little relieved at the idea of having a 7 instead of a 13. I do have two other concerns. First, I am a little worried after reading so many posts that we will be forced into a 13. My attorney said as long as we are tithing(10%) then we would qualify for a 13. But I sensed some hesitation from him. I am going to see another attorney this week. Also, we did qualify for and use several credit cards while in the 13. I assumed that once we had a letter to incur new debt we were okay. That was in Georgia. Now we are in CT and I am wondering if the trustee will I don't know fine us or something?
Thanks again for all of your responses. I did not realize how much I missed out on by not posting and just reading. What a great support group

[bige1030]