Ch.13 vs. working with creditors on my own?

[frustrated1]

My husband and I are over the median for Ch. 7 and the lawyer briefly discussed Ch.13. My question is this... what can Ch.13 do different for me in comparison to just calling the creditors on my own and working out payment arrangements?

[HHM]

Chapter 13 forces settlement on your creditors. If you try to settle on your own, most peoples experience is hit or miss; some creditors will work with you, other won't. In essence, if you try to work it out on your own, you are at the mercy of your creditors; if you file chapter 13, the creditors are at your mercy.

[funspot08]

How Many?

Are you only dealing with a few creditors? If so, you could certainly try to work with them and get a settlement amount or payment plan with a reduction in balance, interest, etc.

Creditors still don't like to hear bankruptcy, so I'd recommend finding out what department needs to be spoken to at a creditor, not just your run of the mill customer service operator, and speak to them and let them know that if they can't work with you, you'll be filing bankruptcy and they'll be getting way less. You have nothing to lose at this point, so it's worth a try before bankruptcy. It's always a last resort.

[kornellred]

HHM summarized it pretty well. Negotiating with creditors, even when the debtor is successful, is time-consuming and not fun at all. If your debt load is approaching enormous, then just skip all the hassle and go BK 13.

[frustrated1]

My debt right now is just under $25,000 and I'm on payment plans but with the rise of gas and food those plans are getting further out of reach. So many tell me that $25,000 debt is not that bad??? Sure is for me!

[chloe0724]

Frustrated, debt is a realtive thing. PLease don't let anyone make you feel like youre situation is not difficult to be in.

[crookedoak]

if at all possible avoid filing, pay house, cars, utilities first, then deal with the rest.
13 saved me 10/04 but I have regrets now, still paying for cars that dont even run, cantget a new car loan, cant pay off early.

[lrprn]

if at possible avoid filing, pay house, cars, utilities first, then deal with the rest.
13 saved me 10/04 but I have regrets now, still paying for cars that dont even run, cantget a new car loan, cant pay off early.

It's too bad that your Ch 13 didn't work out for you as you hoped. Are you still in your Ch 13 now? What led you to file back in 2004?

Also you filed before 2005 - the law allows you to pay off early if you can (unlike after 2005 - early Ch 13 pay offs are still an unknown). Is it that you can't find a way to pay off early?

[crookedoak]

It's too bad that your Ch 13 didn't work out for you as you hoped. Are you still in your Ch 13 now? What led you to file back in 2004?

Also you filed before 2005 - the law allows you to pay off early if you can (unlike after 2005 - early Ch 13 pay offs are still an unknown). Is it that you can't find a way to pay off early?

I wouldnt say that it didnt work out. I think it really did help me to get where I am today. Financially things are great at this point.
Why did I file? My Father died and I incurred allot of expenses as a result. A little mismanagement of money also, got caught in the "skip one to pay the other" routine.
The 13 helped me getback to where I am today. I inquired about paying off early and attorney said it couldnt be done, that it would cost me more, than what my plan shows owed right now. Right now just 2 secured vehicles left for 6000 total. dont have one vehicle anymore, the other can't be driven.

[HHM]

$25K is that borderline debt load. Most people can manage to get out from under it with a little effort and proper money management. When you start getting over $25K, it becomes difficult.

Read through this thread and see if that plan would work for you.

http://www.bkforum.com/showthread.php?t=11328

Without more info about your finances (i.e. assets, income expenses), I can't recommend you attempt settlement. Keep in mind, in order to get settlement moving, you will likely need to default on the credit cards.

[keepmine]

Were I the OP, I'd see another lawyer or two and get someone to run the I and J schedules to get your disposable income. We've had many a successgul filer here who was over the median but, got a Chapter 7 discharge.
If a 7 is still a no go, ask what sort of percentage payback your unsecured creditors would get in a 13.