Met w attorney today for ch13

[mechanix]

We were told we can do a ch13 for 36 months. I have a few questions I forgot to ask.

-The payments are taken out of my check. Will my employer know what the payments are for?

- What are the chances of the 36 months getting extended, and why would they?

It seemed like this is very do-able. I don't understand why so many people say ch13 is so difficult. Do all ch13's start out good and then something goes wrong??
The attorney we saw does 50 bankruptcys a month. They charge $395. It sounds very reasonable. I got good feelings from this guy. It is my first time dealing with a lawyer. Should I still get a second opinion on my situation?

Thanks in advance,
Fred

[edwards2]

We didn't file a Chapter 13 but I think the reason some people have trouble managing Chapter 13 is the amount of disposable income they have after the bills are paid. Emergencies happen and sometimes there isnt enough money to cover them. I have also read that you can "redo" your Chapter 13 if that happens. I am sure others on this forum can better answer your question about pitfalls with a 13. $395 sounds like a very reasonable fee; and in fact, we paid nearly 3x that for a Chapter 7.

[HHM]

Did your attorney tell you that the money is taken from your check (that is usually optional and some districts don't allow it).

Chapter 13 only get extended if the secured and/or priority debts cannot be paid within the 36 months. (i.e. Mortgage Arrears, Tax Lien's, etc).

As for the fee, $395 is all you have to "come out of pocket" up front, the reality is, the balance of your fee is paid through the Chapter 13 Plan. But that is no big deal.

The difficulties arise in estimating disposable income, (for example, 401K loan repayments are not allowed expenses), and in having enough disposable income to pay off certain debts in the chapter 13, and yes, paying for 3 years is just, in itself, cumbersome.

[$$onlynoplastic]

I had to convert to a chapter 13. My car loan will be paid outside of the plan,the only thing in the plan will be unsecured debt and that will be for five years. I am confused. HHM, can you explain?

[HHM]

Well, there is another technical matter having to do with liquidation value (its not that commonly applied). In a Chapter 13, your unsecured creditors must recieve at least the amount that they would recieve under a chapter 7. (i.e. value of non-exempt assets).

But generally, you should not have to be in a 5 year plan to pay back only unsecured creditors.

Anyway, all I can suggest is to talk it over with your attorney and ask him/her directly why you have to pay for 5 years instead of 3.

[mechanix]

Thanks for the replies. I have another queston. We have a mortgage in a year that is going to be changing from an interest only to a principal and iterest. Also the interest rate is going to be adjustable every 6 months. I talked to my mortgage guy today, and he said if it was to happen today my payment would increse $190 a month with todays interest rates. Could our payments to ch13 adjust to cover this change. Also how difficult is it to get it changed.(could this also cause our time to change from 36 to 60 months?)

OR should I just refinance now while I still have pretty decent credit, so we don't get this change in the middle of a ch13?