Chapter 13 questions

[2ndtimefiler]

I am debating filing chapter 13. I filed chapter 7 in 2003, and was discharged. I never thought in a million years I would put myself in this situation again. I am in debt again. I understand under new laws I need to wait to file 4 years from discharge. I emailed a local lawyer and he said I could file, but wants me to come in for consulation. I am beyond embarrassed to use the same lawyer I used the first time. I live in PA, filed alone. All debt (unsecured is mine). I just bought a car before things hit rock bottom. I am paying out for CCs 500 per month with 30% interest, my car loan through capital one is 20%.
How will be car loan be affected if at all?
What if I do not have enough disposible income? I pay 1/2 the bills and hubbie pays 1/2, I pay my car and the CC debt.
We are at state median for income for family size.
Does the plan allow money for our food/clothes/gas/etc or is that all set at a certain limit. Does it limit what my cbale/cell phone or Telephone bill can be monthly? I have 3 children and there are always expenses coming up for school.
What can I expect to pay back percent wise on the debt? I know it goes by income/expenses/debt, but if i have 2000 monthly income, how much can my monthly expense be...since now 500 right off the top is CC bills...200 is my car...then i have mortgage, electric, insurance, and all the usual expenses.
The lawyer I spoke with said I should stop paying my cc bills now and get a handle on finances before filing. What scares me about doing that is I can not live through the terrible time I went through before when the creditors were calling daily, at home/work/even to relatives for an unsecured loan to see if they knew my whereabouts.
I keep paying the 500 per month and some of the cards have over the limit fees. I am just terrified of the creditors hounding me. I am taking pay day loans just to keep ahead of the creditors.
Thank you. I really learned my lesson the hard way. Chapter 7 was terrible insult to me...but finding myself in debt again and having no way out again is the worst thing i've encountered. Please someone give me some advice?

[Lesa13]

Hello - wanted to tell you to hang in there

This is such a hard time for you - but you've found a great support group here and LOTS of knowledgeable people with good experience and advice.

I am in Missouri and in the middle of my Chapter 13 (filed under old laws) So here's just some of my general experiences FWIW - not advice, just some ideas.

First, try not to be so down on yourself! Because you are in debt doesn't mean you should be rooming with Charles Manson! It's debt - period. That's what makes the world go round! Believe me you are NOT alone. Everyone tries to keep on the up and up with their finances but sometimes life just doesn't allow that no matter how hard you try. I have been in the same boat as you - payday loans to try to just put food on the table or gas in the car to get to work. It's tough and I tell ya, life sucks sometimes and you have to do the best you can. You haven't murdered anyone, you haven't beaten your children - you have some credit card debt, so what.

Now, will both you and your husband be filing or just you or just your husband? You said you filed alone in 2003. Is it possible for your husband to file a Chapter 7 now on his own if you would choose to do that? Or will you two be jointly filing whehter it is a 13 or a 7?

I went with my 13 because I felt it was morally right to "pay back my debts." The one thing I did not realize then was that when you do a 13, you are budgeted. You wondered about disposable income. The purpose of the 13 is to make sure any disposable income (meaning not going to day to day living expenses) is shunted into the Plan and paid to your creditors. That means, if something happens (like you get in a car accident, you get sick and can't work and lose 2 weeks pay, etc.), there is NO wiggle room for that. You are budgeted relatively tightly and so it is very difficult to find money when something extra is needed. Just something to keep in mind!

So you would go to your attorney and he will give you some forms/questionnaires to fill out. They want to know about everything - house payment, food, gas for car, cable bill, etc. Let's say, though, you are spending $250 a month for a cable bill. Obviously, that's not going to fly. So there are guidelines that the court sets based on your income and family situation (ie, single, married, children, no children, etc.) and what is considered "reasonable". A "reasonable" cable bill might be $50 - not $250. So it isn't like you couldn't have cable - you just may be only able to get the basic cable.

Some things are not taken into consideration at all, depending on your state. For instance, I have several dogs and dog food and vet care was specifically NOT allowed in my budget. However, I have heard of others in different states that that was considered part of their food budget and went through with no problem.

So basically, the point of the budget is to find out how much you bring in and how much (realistically) you can live off of and still live okay (meaning, you aren't sleeping in a box on the street, but also not living in a million dollar mansion).

You said you just bought a car. I am not sure how expensive it was or what your payments are, but if it is reasonable, I would think you would be able to reaffirm that purchase and keep the car and make the payments. If it is a new Porsche - chances are it will have to go back.

Your credit card payments - and anything else that is unsecured debt - will be handled through the plan. That means, as of the very DAY YOU FILE, the credit card companies are not allowed to call you, your mom, your aunt bessie or your neighbor. Sometimes, if you know you are filing shortly, you can tell them "hey I am filing for BK next Monday and here is my attorney's phone number" and they will back down.

I know how stressful it is to have that constantly ringing phone and the rudeness of these people. You have to remember, it is their job to get money out of you. They get paid based on what they collect from you. If they have to be a little tough talking to get you to pay up, well, that's okay, they figure that's part of the game and that's how they make their living. I think we all probably know how many of them cross the line. It's NOT personal - just how those people get a paycheck.

I think your potential attorney is right though - you stop paying them NOW. The credit card companies are the least of your worries. They are like annoying gnats - calling, making trouble and embarrassment, but in the end, they get their money through the plan and go away. The money you would be paying to them, you try to set aside for living expenses.

So once you make the decision, you either shut the phone off (I haven't answered my phone in years People know to either leave me a message or send me an email!), let the answering machine take it or just have a little prepared speech ready when they do call telling them you are filing, here is your attorney's number and please don't call again.

Again, these are just my thoughts - not a legal opinion!

One more thing - hope the lawyer you are selecting is a good one. I think if you read these boards you'll see that BK lawyers tend to not be the most socially skilled nor the most communicative (I have one of those myself and he is one of the best known in my area). The attorney gets paid up front - once your Chapter 13 is filed and moving along, the attorney has really no more vested interest in you - he has gotten his money and he wants to move on to the next person so he can get some more money. So make sure that the way your attorney works is acceptable to you. If (like many of us) you need your hand held and your guy is one who can't even return a phone call, you might want to keep looking.

Good luck and God bless you!


Lesa
Missouri

[wayne-o]

On another note, I am in a chapter 13 and my attorney was paid thru the plan. He got paid before any of my unsecureds did. If I call him and have him do a lot of stuff. He can bill my plan with trustees approval and I may have to stay in plan a little longer so my unsecureds get their money. It was very helpful for me not to have to come up with attorney money before filing. I knew I was going to have to do a 13 to keep my house.

[2ndtimefiler]

filing alone

you asked if i was filing alone, and yes, that would be the case again. My husband has gone through some terrible medical issues and this is his 2nd bout and I hold all the unsecured debt again. We live in PA, and I was advised a chapter 7 the first time because all the debt was in my name and they couldn't touch my husbands things. I feel like a serial filer, I am in no way living beyond my means. The car I purchased is several years old, and is not brand new. My other car was dying, it had 150,000 miles on it and was a constant payment for repairs.
I guess my main concern is getting turned down once they see my bills, our income together and where do you find disposible income.
I have medical expenses for my daughter that have gone to collections, she is not even of age and they are sending her the bills, yet I carry the insurance. I am just afraid, and i've debated debt negoiation but i am not sure that is the way to go. There is an attorney I found on the internet in PA that does debt negoiation. my fear is that it also some sort of scam and I'd end up sued.

[aa06a47]

I have some advice.

1) Don't feel bad about yourself, as others have already stated, your in a group of people that DOES understand.

2)If I were you, I would consider doing some pre-bankrupcy counseling. If you feel the car you own now will not be reliable for the 3-5 years your in the plan, then I would buy a new one before filing. You might find great interest rates from Ford or GM. I understand GM is having a low financing incentives for low credit scores now through the end of the month. Ford I understand is pretty credit friendly.

3) In my opinion, don't do the debt negoiation. Even if the person does get an agreement to settle, you'll have to pay taxes on the amount of money that was forgiven, plus your credit will still be trashed.

4) Filing bankrutpcy is not only a personnal decision, it is also a "business" decision. Once you decide to file, you must take full advantage of the bankruptcy code. Don't get emotional because you really like that one creditor and want them to get paid and do something like pay them before you file. Use the money you have now to get the things you need to survive the Chapter 13.

All the questions you have asked about what % you will pay back will hinge on a number of circumstances and really cannot be accuratly answered. I would say if your currently paying 500/month in credit card bills and are struggling, you will certaintly pay less than that. If your on the med income limit, a new car might push you where you can file a chapter 7.

[SinkingFast]

When you're married filing Separate,...... It's kinda like filing taxes. The Forms start out with Hubby's income included, but then his income will be backed out later. From there, you go on with your income and the expenses you're responsible to pay.

Then, your income will be compared to the Median. If you have kids, they could be added into your family size. But your income would be the basis for determining the length of your plan.

If you're below the Median, you might get a Plan as short as 36 months. Just depends on your Debts. The type of Debt you have. How much in arrears to Secureds you need to make up. If you have Priority Debts that need to be paid. That sort of thing. We can't tell you a % because that's based on the type of debt that needs to be paid and your disposable income.

No need to feel embarrassed. We all have things happen that are beyond our control. You didn't go out asking for bills for illness and accidental injury expenses. At least you aren't burying your head in the sand and ignoring your problems. You're making a conscious decision to be proactive about your situation!

[jane taylor]

So sorry that you are having to go through this and I wish you all the best. My husband made a very good point today when he said that we are in the majority as most people in our country are in some kind of debt. Very few people completely "have their act together" when it comes to finances and that we are NOT bad people. We've made our mistakes just like everyone else. We have also had some really rotten luck with job losses and major medical expenses.

To tell you not to beat yourself up over this is so much easier said than done. It is so hard for me not to compare myself to my brother and other members of my family. It would have been easier to tell my family that I had committed a felony (of course I haven't!!) rather then tell them I'm in bankruptcy.

It is embarrassing, but you will get through it!

Hang in there, we're here to help you through this!

jane