Chapter 13 questions?

[Mark80]

[needafreshstart]

The pre bk credit counseling is worthless. You just have to read some information take a quiz and fill out income and expenses and list your debt. There are online couneling you can do to satisfy this.

I would look into things further, if you think you could pay back 100% in 3 years, I wouldn't go the route of bk. My opinion bk should be the last option and if you think you could pay 100% of your unsecured debt over 3 years, there are other options. Unless I misunderstood what you were saying.

[Mark80]

If filed 100% at 3 years compared to my minimum payments I would save with 10% fee only 200 monthly. But in 3 years the debts would be discharged. If I just make the minimums now, which are actually falling behind because of late fee's. (25-40 each card) It would take 20-30 years to pay them off. Thats if I am understanding that the credit cards would not include interest during the re-payment plan?

I guess I am looking at Chapter13 as a way to pay back my debt in a short amount of time to be away from it. My credit is slowly being destroyed by late payments anyhow so that doesn't concern me. We just can't get out and I don't want to lose my home.

Thank you for the reply!

[needafreshstart]

I would consider looking into a debt management program before doing bankruptcy. They work with your creditors to lower your payments, there are reputable programs out. You pay a fee to them, but some cases it is worth it. They can set it up as a five year plan to lower your payments which would probably be less than chapter 13 bk, most places you can pay it off early if you want to be done sooner. Your credit will be better off rather than doing bk.

Also just because you want to keep your house or car doesn't mean you have to file chapter 13. But you may have to file a 13 anyways depending on income.

[Mark80]

I was considering the debt conseling thing but I have yet to find a real place thats not trying to rip you off? I posted this in the general forums ::


I know these places are usually a Scam. And well almost everyone here is using the site because they filed bankruptcy. I have been on the fence to file myself for months and I am falling more behind. Anyhow the only reason I can't make it is secured debt. I have way to much and was borrowing off one account to make the minimums on others. After being a few days late here and there some of the more resonable accounts jacked up the interest rates. (29%) I am maxed out, out of credit and can't make the minimums anymore. IF I could get lower interest rates to open some breathing room I would make it. I called my creditors and they almost laughed at my request. This was the first step I read to do, call and negotiate. That didn't work because everything is maxed.

Anyways, the Credit consoling agencies say they can work down your rates and make everything into one payment. It sounds great right? Well we all know most of these places are shady as can be and end up ripping off consumers and causing even more credit problems then you had before. But is there ANY reliable "real" places out there that can help in that situation?

If anyone knows of a legit place that could actually do something for me I would really appreciate hearing about it.


Thanks a bunch guys!

-Mark


::::::::::::


Like I said I would love to go head on into this with a reputable place that could lower my interest and help me out but I am scared of being scammed!

Thank you so much!

[needafreshstart]

There are reputable ones out there, I think some people think they are a rip-off because how much you end up paying them up front in your payments. I have a friend who used a debt counseling program, now his debt is gone and no bk is on his credit. Ultimately you have to do what you think is best, I just hate to see someone file bk if they don't have. Good luck in whatever you decide to do.

[Minnymouth]

Many times a debt consolidation is treated just as bad as a bankruptcy on your credit report. It's looked at the same way - you can pay your bills or manage your money - somebody else has to do it for you!!!

Often debt consolidation turns out to be "expensive" even though you are saved money on the credit card fees, etc.

The more late payments, collections you have on you credit report, the worse it hurts you, even more than filing bankruptcy. Then if you have a lot of late payments, collections PLUS filing bankruptcy - it even makes it worse on the credit report.

Personally, I would file bankruptcy before I would even consider a debt consolidation agency.....

Just my opinion....

[Mark80]

My mortgage broker told me that credit conseling looks worse to lenders then bankruptcy and that if I ever did one just to file. He is dug into the industry and I have grown to trust him over the years. I just though getting conseling would be the less complicated approach at the time, but after speaking with them things got into a grey area I wasn't comfortable with. That being said I still am interested in Chapter 13 and hope one of you guys could answer some of my questions.

Also if anyone knows a good lawyer that works out of the STL METRO area that would be great to!

Thanks

[lrprn]

First off I was wondering what the credit consoling deal entailed. I know I have to go through this before I can file? Is this working with one of those possible shady companies and having them try and budget my problems out? Can what the court requires be done online,

Check the list here for the approved Missouri pre-filing credit counseling agencies - http://www.usdoj.gov/ust/eo/bapcpa/c...c_missouri.htm . As already mentioned, this is mostly just a $35-50 hoop-jumping exercise required by the current bk law to file.

Also if you guys can recommend a trust worthy place to use to fulfill this requirement so I’m not scammed into something I would really appreciate it!

We and others here used the online Hummingbird course - relatively painless - http://www.hummingbirdcreditcounseling.org/ccfe.php . Others here have used CCCS chapters with success as well.

Do all people qualify for chapter 13?

No, not even close. You have to complete the entire Means Test and allthe Schedules to see if you have at least $160/mo disposable income and that your creditors will get at least as much as they woulld get in Ch 7. It's not just subtracting your income from your real expenses.

I have overwhelming unsecured debt that I keep falling farther behind on, but I own a home and a car, (both I owe 90% on) that I don’t want to lose. So I didn’t even consider chapter 7.

If your income is below the median for your state and your car and home payments are up to date, it's very possible you can file Ch 7 and still keep your home and car. You need to meet with 3-4 bankruptcy lawyers in your area to find out what's possible and what's not in your situation.

I could pay 100% back at the shortest period (3 years?) and be on track and make the payments. So is that pretty much the worst case scenario?

Nope. Worst case scenario is that if your income is above your state's median for your famly size and/or you show sufficient disposable income on the Means Test and Schedules, then you'll probably end up in a five year Ch 13 plan. Almost no one gets three year plans any more since 2005 unless you are filing Ch 13 with a below-the-median income.

How long does it take to actually file and have it all done with?

Depends on the complexity of your case and how much pre-planning needs to be done. You may need to wait to file to minimize the six-month-lookback for calculating income or because of recent credit card purchases or cash advances, etc.

Once I get the case open and started do I get to halt creditors calling for collection and defer any more payments until the proceedings are over?

Once you file bankruptcy (7 or 13), creditors and collectors are no longer allowed to contact you for payment of debts. It's called the automatic stay.

I have a personal loan from my parents that I pay 300 a month for. I make this payment every month and have records of it for the past year. I owe then 2 more years of payments. Can this be taken into consideration by the judge when disposable income is looked at to decide on a payment agreement?

If the loan exists on paper, has signatures, witnessed, etc - in other words, a real loan, not just a handshake agreement - then some trustees will honor that and allow the payments to continue during Ch 13. However, some will see this as a preferential payment to family insiders and not allow it (although you can pay the loan back after your case is discharged). This is a good question to ask an experienced bankruptcy lawyer familiar with the trustee practices in your local court. (And do keep in mind that no matter what, you will need to declare this loan if you file.)

And last, I am trying to find a legit attorney to deal with this. Is there anything to look for in finding a good one, any resources?

Start by asking friends for references to good lawyers they've used. Call those lawyers and ask for their recommendations for a bankruptcy lawyer in your area (That's how we found our fabulous lawyer!). Also Martindale's http://www.martindale.com/ and Lawyers.com http://www.lawyers.com/ will help you find bankruptcy lawyers in your area. Also you can get recommendations by calling the local bar association.

[Mark80]

Thank you so much for answering all my questions.


So on a 5 year chapter 13 plan what is the worst case scenario? 100% of what you owe to every creditor + fee's / months paid? That would still be alot less then what I'm paying now and I'm just paying the minimums. But maybe I am way off on this, I was under the impression you are required to pay back atleast what you would on a chapter 7, but isnt each chapter 7 different and a payback amount calculated for each case? Sorry If I'm not making sense I guess I am just seeing if Chapter 13 with the most required to pay would still be beneficial to me.

And your saying that the main way to be denied for Chapter 13 is to not have "enough" disposable income after filing to survive after paying what the creditors agree on?


Parents loan:
Thats one of my worries, I owe my parents 2 more years and all I have is cancelled checks for all the payments. It was a handshake type thing. I wonder if I can get a contract drawn up and have it binding to commit to the rest of the amount owed?

In anycase thats 300 bucks not reported as living expenses to the court, thats why I asked about it. If the problem can be "not enough" living expenses I wonder if that not showing might actually help in that case. That is if the worse case is 100% paid back no interest added / 5 years it would make a world of difference atm.

Anyways, thanks again!

[rrockinggramma]

your loan to your parents will be treated as unsecured and they would receive the same percentage as your other unsecured creditors. After discharge you might have to make up the difference if your plan is not 100 percent payback.

[Flamingo]

My mortgage broker told me that credit conseling looks worse to lenders then bankruptcy and that if I ever did one just to file. He is dug into the industry and I have grown to trust him over the years. I just though getting conseling would be the less complicated approach at the time, but after speaking with them things got into a grey area I wasn't comfortable with. That being said I still am interested in Chapter 13 and hope one of you guys could answer some of my questions.

Also if anyone knows a good lawyer that works out of the STL METRO area that would be great to!

Thanks

It never hurts to talk to an attorney to find out exactly where you stand. May I recommend you do what we were advised to do by a family friend attorney who I used to work for. Find out who are the outstanding BK attorneys in your state by contacting your State Bar Association. We utilized one of the best BK attorneys in our state after getting his name from our attorney friend. Our initial consultation was free and to it we took complete listings of all bills, monthly payments, sources of all income, listing of all assets and our most recent tax returns. We were given a complete breakdown of our situation and advice on what would be the best option for us under all the circumstances. Our attorney used to call us during our plan with updates and we could always reach him or his paralegal via phone or email.

If you do the above and make an appointment for a consultation, it will put a lot of your fears and questions to rest as you find out what your best options are and what you should do. It will not be pretty and it will take a while to get out of your situation and you will have to do major lifestyle changes along the way and learn to live without credit cards. Best of luck to you!