What is your best advice for a successful 13?

[fins22]

One of the prior posts was important. It said maintain self-control. That is what it takes. A little self-control and knowledge of what is going on. I spent 20 years as a certified bankruptcy Attorney and handled thousands of Chapter 13 cases. The majority of my cases were completed and discharged because my clients were aware of what was going on, what their responsibilities were and what they needed to do. I always felt that communication with your Attorney is critical. When you have questions, ask your lawyer, don't assume anything. The fees charged in a 13 are usually flat fee arrangements so you should not be charged for phone calls and correspondence. Their job is to help you get through the case and deal with the problems.

It is also very helpful to let your lawyer know if you are anticipating problems (such as inability to pay a required payment). This will allow them a proactive approach rather then reactive. Sometimes you can get a suspension of payments for a few months. It is easier to deal with than having to respond to motions to dismiss your case or to vacate your protection after the fact.

I also suggest a wage garnishment for your trustee payments. This assures the payment is made timely. It is easier to live on what is left (If you can't, the plan would fail anyway). Bankruptcy law is very powerful and affords a lot of protection and if you need it, it can get you straightened out and on the right path.

A prior post recommended hiring a Consumer protection Attorney. I ask why? The only thing they can do is protect you under the appropriate protection Statutes from illegal collection activities. This does not solve your problem with all your debt like a Chapter 13 does. Chapter 13 cases work when they are needed. Keep in mind also that maintaining all payments inside and outside your plan is essential to not only maintaining your plan but building your credit while you are in the plan. I had many clients build their credit so that when the plan was completed, they had substantially higher credit scores and were on their way to credit recovery as well as reduced debt. People believe mistakenly that your credit is ruined for 7 to 10 years. this is not true and what was your credit like before you filed?

Every Chapter 13 case is different and every case requires a different payout to creditors predicated upon your personal financial circumstances (ex.: your income/expenses and equity position of major assets.

Remember, credit is very important and during and after bankruptcy, you have to keep an eye on that. Good Luck

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[systemslt]

Just know that you will be loosing some control over your finances. Raises, tax refunds, bonuses... yes, they will most likely be taken. Just because the amount planned to pay back right now is 55%, that doesn't mean that you won't have to pay back 85% if you make more money. That's what so many are confused with. It's almost better to pay back 100% if you can, then as long as your plan is on track there won't be a need to take additional raises and you can pay off early. Anything less than 100% is a 5 year sentence where you are not in control. If it's the best you can do, it's worth it to get cleared out but don't jump to a 13 to "save" money on the payback. That's false in my opinion!

if you pass the means test your ch 13 can be 36 months.


more money, raises, don't turn them down trusty may not care about 10% increase. if you do some research you can figure out real close what will happen if you decide on bankruptcy. also you will have a clue if your lawyer is making mistakes. mine made a lot from cars that i never owned to creditors that were left out. value of items that were not even close to what i given them. i had to dam near hold the paralegal / accountant hand to fix there mistakes with out failing the means test.

the reason i did not represent my self is i though it would screw up filling a document and would be screwed forever.

at least the lawyer knows filing

[morpheus]

Just received word from our attorney that after running the numbers, it looks like we are definitely in a 13 and that our payment plan will be about $375 per month which seems to work out to a 55% repayment after factoring in attorney and trustee fees. Our cars are being paid outside the plan so now we just need to decide if we should cram down the older vehicle. We have three years left at $433 per month but if we do the cramdown it will take it out to 5 years at about $250 per month. But my understanding is that any "savings" we would see would go to unsecure creditors so that may not be the best strategy regarding the vehicle. Will talk to the attorney further about that.

Now for the advice. Since many chapter 13 plans fail, and my husband and I are not used to living on a budget, what advice can those of you deep into your plans or those that have successfuly completed your plan can you share with those of us who are just setting our feet on this journey? I would love to hear any tips or strategies you have employed. Thanks in advance!

Just know that you will be loosing some control over your finances. Raises, tax refunds, bonuses... yes, they will most likely be taken. Just because the amount planned to pay back right now is 55%, that doesn't mean that you won't have to pay back 85% if you make more money. That's what so many are confused with. It's almost better to pay back 100% if you can, then as long as your plan is on track there won't be a need to take additional raises and you can pay off early. Anything less than 100% is a 5 year sentence where you are not in control. If it's the best you can do, it's worth it to get cleared out but don't jump to a 13 to "save" money on the payback. That's false in my opinion!

[systemslt]

I am in a Ch 13 and wish I had not done it. As I see things now, we did not have to do it. If you stop paying the credit cards, because you can't and any unsecured creditor, you can use the $$$ to feed and clothe your family. The act of a BK will drop an atom bomb on your credit and all the threats of lawsuits, taking your children and harrasing phone calls can be stopped if you become familiar with the Fair Debt Collections Practices Act (FDCPA), a federal set of guidelines. http://www.ftc.gov/bcp/edu/pubs/cons...edit/cre27.pdf


With a proper budget and lifestyle, with a new behavior towards credit, you can avoid this drastic decision. You don't need to spend big $$$$$ to have a company "settle" your debts, and I know the BK attorneys won't like me, but you don't need them either. the debt settlement companies are ripoff schemes, I know I got ripped off. You just need to decide that you, and only you will decide to deal with all of this crap and devote an average of 20 months to get out of debt without a BK. You can settle for pennies on the dollar by yourself. I don't have any book to sell, nothing to sell. I can show you the way and I won't charge you $1. I am trying to help others avoid this.

Thank you and stay strong. Hug your wife, your children and your husband. Stay close to good relationships during this difficult phase, it will pass. But I say NO to BK! contact me at [email removed] if you want more info.


NOBK

using the Fair Debt Collections Practices Act and i net forums that support it i kept the collectors at bay, most jest sold the debt to another when challenged them. this worked for about 3 years till 1 debt collector decided not to give up so easy. they used some tactics that blind sided me like the "hip pocket summons" i was severed and i answered i checked the court house to see if they payed the 250 to file. and i was ready to pay 250 to file if they did. well i did not know the clock was ticking do to my failure to a supply a affirmative defense and some other documents in the 30 days. after i received them in the mail. when the 30 days were up they went to the court house saying that i failed to respond and paid the 250 and a default judgment was granted that day. with in a week the money in the bank was taken pay check garnished and a letter sent wanting to know all property i have. bankruptcy
saved my house.

when you get served requiring you to answer to a attorney you need to make some fast decisions.

till then read this forum to make you best case if and when that time comes.

[flyinbroke]

I will be. This was only the first one visited. I am going to shoot for at least 3-5.

I don't think he figured in my actual rent which was twice the IRS guidelines. He even mentioned that this city has too many low income people, which drives the rents down. I said I had yet to find rent close to that number that was not in drug/gang hell.

Am I correct in surmising from this visit that secured debt and student loans are not going to be standalone expenses; rather, they will be folded into a BK?

[HHM]

You do not need to shut off your 401(k).

I think you should talk to some more attorneys.

[flyinbroke]

Because there is no way I can keep up with the rising interest rates. If I can postpone, then I can pay off smaller bills as I am only delinquent on five of 16 (though the balances are huge on these) because they are closed/opted out on.

Minimums are coming to 2800 with a 13 coming in at 2400. CCs are closed, which leaves no wiggle room. I assumed (wrongly) that things like student loans that are not dischargeable, and my car would be figured in separately (car only has about 12 payments before being PIF) and disposable would go to unsecured.

I will have to mull this one...800 a month is not going to be enough to cover insurance, utilities, feeding me and pets, car maintenance and potential emergencies. I guess I am expected to shut off my 401K because voluntary retirement plans are considered luxuries. I am in my 40s, so this is not gonna happen. At any rate, I will need to stockpile some cash so when it is time to file I will be able to survive contingencies.

[HHM]

I owe 138K and will be stuck with a 2400 payment according to lawyer #1. It is only a few hundred less than the minimum payments I was making before I quit paying, and also leaves no wiggle room for emergencies unless I cancel my phone, stop contributing to my 401K, sit in the dark and eat ramen and peanut butter.I don't think this is a viable solution.

If that is really true, it sort of begs the question as to why you simply can't pay your debt?

You need to look at from a time perspective as well...even if your chapter 13 payment is close to what you were paying before, keep in mind, you will be out of debt in 5 years in a chapter 13, which cannot be said for making the minimum payment.

If you can come-up with the cash to settle, great. Anticipate around 40-45% to have a realistic shot at settling all debts.

[flyinbroke]

I owe 138K and will be stuck with a 2400 payment according to lawyer #1. It is only a few hundred less than the minimum payments I was making before I quit paying, and also leaves no wiggle room for emergencies unless I cancel my phone, stop contributing to my 401K, sit in the dark and eat ramen and peanut butter.I don't think this is a viable solution.

[ABC]

In the case of a large 2nd lien strip , I can see a big difference.

[HHM]

I am in a Ch 13 and wish I had not done it. As I see things now, we did not have to do it. If you stop paying the credit cards, because you can't and any unsecured creditor, you can use the $$$ to feed and clothe your family. The act of a BK will drop an atom bomb on your credit and all the threats of lawsuits, taking your children and harrasing phone calls can be stopped if you become familiar with the Fair Debt Collections Practices Act (FDCPA), a federal set of guidelines. http://www.ftc.gov/bcp/edu/pubs/cons...edit/cre27.pdf


With a proper budget and lifestyle, with a new behavior towards credit, you can avoid this drastic decision. You don't need to spend big $$$$$ to have a company "settle" your debts, and I know the BK attorneys won't like me, but you don't need them either. the debt settlement companies are ripoff schemes, I know I got ripped off. You just need to decide that you, and only you will decide to deal with all of this crap and devote an average of 20 months to get out of debt without a BK. You can settle for pennies on the dollar by yourself. I don't have any book to sell, nothing to sell. I can show you the way and I won't charge you $1. I am trying to help others avoid this.

Thank you and stay strong. Hug your wife, your children and your husband. Stay close to good relationships during this difficult phase, it will pass. But I say NO to BK! contact me at [email removed] if you want more info.


NOBK

Hmm, sounds like someone is misinformed.

1. Debt settlement and bankruptcy are equally negative on your credit report.
2. Why put your financial future in control of your creditors, when you can force a settlement on them with a chapter 13?

[nobk]

Don't Do A BK!!

I am in a Ch 13 and wish I had not done it. As I see things now, we did not have to do it. If you stop paying the credit cards, because you can't and any unsecured creditor, you can use the $$$ to feed and clothe your family. The act of a BK will drop an atom bomb on your credit and all the threats of lawsuits, taking your children and harrasing phone calls can be stopped if you become familiar with the Fair Debt Collections Practices Act (FDCPA), a federal set of guidelines. http://www.ftc.gov/bcp/edu/pubs/cons...edit/cre27.pdf


With a proper budget and lifestyle, with a new behavior towards credit, you can avoid this drastic decision. You don't need to spend big $$$$$ to have a company "settle" your debts, and I know the BK attorneys won't like me, but you don't need them either. the debt settlement companies are ripoff schemes, I know I got ripped off. You just need to decide that you, and only you will decide to deal with all of this crap and devote an average of 20 months to get out of debt without a BK. You can settle for pennies on the dollar by yourself. I don't have any book to sell, nothing to sell. I can show you the way and I won't charge you $1. I am trying to help others avoid this.

Thank you and stay strong. Hug your wife, your children and your husband. Stay close to good relationships during this difficult phase, it will pass. But I say NO to BK! contact me at [email removed] if you want more info.


NOBK

[BnkrptcyLwyr]

Budget, budget, budget ... and be realistic about what you can afford to pay.

My clients do really well because I go through every item in their budget (all the nickel-and-dime stuff especially).

The biggest mistake to make is the "I must attempt to keep everything" attitude, and consequently the slashing of the budget to make the payments "work."

My experience is that people just don't know how to cut back, and that they think they can just cut back 200/month on food. They can't - you can't slash necessities. Write down exactly what you spend on everything ... and then see what you MUST cut back on. I had a woman who was insistent on keeping her two ATV's and wanted to keep making the payments on them. Of course, she didn't have the money to do that, and keep her house ... and yet she was insistent on keeping the house. I laid it clearly on the line ... you either get rid of the ATVs, or your getting rid of the house. They got rid of the ATVs.

A realistic budget is key ... don't kill yourself trying to stretch and make it work. My clients end up being able to save money, and I hear no crying about how tough things are. I just had a client say to me that she went over her budget, and she realized how good a job I did, and that she would be very comfortable.

[morpheus]

As stated by many, budget is the key. I was divorced 2 years ago, and started my ch13 1.5 years ago, a 5 year plan. Part of my issue was the person I was with, I always wanted to "go cash" and get debt free but I could never do it in my past relationship. For whatever reason, combined we were a failure. But now I am doing what I thought would be impossible, making it on cash with a ch13 and alimony for part of that time. I have been able to pay all of my bills and keep at least a small reserve in the bank. As long as my payments stay where they are at, I will be ok. I am proving that I was right, and that feels good. I look forward to paying off the alimony, the 13, and getting my life back in order but I take pride in how well I have managed. I track everything on a debit card and keep a spreadsheet check ledger that is balanced every day... I know down to the penny exactly where I am at, which is important when things are tight. My attorney modified my plan to allow for the purchase of a new vehicle when my lease ran out, which will gives me dependable transportation for the remainder of the 13. Manage your limited cash, but splurge every once in awhile if you can without messing up your bills.

My summary (hope these work!)
1. Budget and cut out anything that doesn't add real value to your life, it's not forever
2. Keep a small savings and try to grow it, even if it is slow progress... you will need it
3. Take pride in your paid bills and debt free future, many will envy you in a short time
4. Balance your bank account everyday, managing cash flow will help to make your cash available when you need it, don't pay ahead on one thing if you are going to be behind on another!
5. Hope that your good faith effort and payments keep the trustee out of your life.. It is a fear that they will take every good thing you do to save money and take it away. But they most likely don't have the time... good luck, see you on the other, debt free, side...

-peace

[wildflowers]

Just a few ideas from my experince with 13

I just finished my last payment on August 15th paying back $106,000 @ 100 % for 5 years.... its been a rough road and I sometimes wondered what the light at the end of the tunnel was going to actually be ...thankfully it wasn't a train ! There will be times of tears and you may think you'll never make it but things always seem to fall into place and lady luck was also on my side...I would first and foremost say you need to have newer cars with low mileage on them if you're in this for 5 years... luckily we made it on older cars and driving 50 miles each way to work our one car just turned 290,000 miles and knock on wood its still going without any major problems....that was my major fear ....no car no way to get to work...our plan also included overtime and to me that's a sham... I'd suggest you stop working any overtime before you file because they will make you work it if not... in this economy most don't have jobs let alone have a guarantee you''ll work overtime for 5 years! We also let our kids ..(teens at the time) know the mess we had gotten into and let them know "life as they knew it" is now over... it has been a great learning tool for them also they're now young adults on their own with wonderful spending habits so that was a real plus out of all of this for them not to repeat the cycle. Other than that just fasten your seatbelt and ride the ride that may be bumpy at times and tears will be shed but with determination, creative skills and a little luck it can be completed.... Good Luck all !