what to expect now that my Chap 13 has been dismissed

[esmith1515]

I have been in a Chap 13 for almost 2 years of a 5 year plan and now my case is being dismissed. What should I expect to happen over the next couple of months. How long before all my creditors are notified and I start receiving invoices again? Has anyone been in this situation and contacted creditors about possible settlements? Both of my vehicles were "paid off" during the plan, but now that the plan is over, will the money that got paid to the vehicles be considered as paying down the principal I had remaining when the case got filed? Although I know these creditors may come after me for some past interest, I feel like I am financially comfortable now and I feel like I'm in a good position to start rebuilding my credit on my own. Just wanted to see if anyone in the same position has any advice. Thanks

[LostOne0069]

Sorry, not an answer to your question, but.... If you're doing better financially... why did your 13 get dismissed?

[esmith1515]

I thought someone might ask that. My payroll forgot to take the money out of my check for the month of August each of the last two years. We were supposed to send the money in ourselves and even though we had the money to do it, we just figured as long as the trustee was continuing with the plan, it was that pressing of an issue. We thought wrong. We owe $4000 and instead of trying to scrape that together by asking family members for loans, lets just let them dismiss. It may not be a good decision, but it's the reality of the situation now. The majority of the plans was student loans and my hope is that we can renegotiate a payment plan for those. The rest of my unsecured debt principal only totals roughly $13000 and since my wife just got a new job with a considerable raise, we will have about $4000 per month we can devote to paying down debt. I think I have a pretty good idea, based on other posts in this forum, and how we should proceed from here. I just wanted to see if there was any one else in a situation similar to ours that could give me some advice.

[SinkingFast]

You should be prepared that the automatic stays are gonna be lifted since your 13 has been dismissed. All your creditors are gonna come at you all at once, fast and furious. Just be prepared for that.

[edwards2]

Its amazing to me how placid you are about your case being dismissed. Just curious why that is okay with you. Your credit took a major hit...why not follow through to the end? And sinkingfast is so right the creditors will come after you with a vengeance. I would be upset but kudos to you if it isnt a big deal to you.

[esmith1515]

I know it's not a good situation. My credit has been taking major hits for the last few years and it's already shot. I was told I had 2 days to come up with $4000 and it wasn't possible. Even with a dismissed BK on my credit, if I start from here on out and show a positive repayment history and payoff all the unsecured debt I have except for the student loans, my credit will hopefully still start to improve. I feel like I will be able to get the situation turned around. I know it won't be easy, but I don't really have any other option.

[Minnymouth]

You sound like you have a a good "game plan" if the creditors will let you follow thru without law suits involved.

You state that you have approx $4000 disposable income each month to apply to past debts totaling approx $13,000remaining besides your student loans.
In this instance you should be able to wipe these out in 6 months at least if aggressive in your payment plans.

GO FOR IT..............

Probably would have been easier if you had stayed in the plan, but even then extra income would be paid out to the plan anyways.

In this instance though, you will not be paying back part of the debt - you will be paying back ALL OF THE ORIGINAL DEBTS - 100%.

You may have trouble with the creditors getting a repayment plan again..... they may demand payment in full or sue you..... so BE PREPARED......... for whatever comes down the pipeline.

Keep us posted on what you decide and how it goes..... we all are curious as to the outcome...

[esmith1515]

I want to throw out a typical scenario I'm going to be facing and see if someone can give me probable answer. Let's say I owed $5000 on a visa. My chap 13 plan paid $1000 lets say before the case was dismissed. They will not only want the $4000 I owed still in principal, but the interest that would have accumulated in the past 22 months. From what some of you are saying, they might demand all of this at once! If the visa was still an open account when I filed, won't I still be able to continue on a monthly cycle of payments on the new, now higher balance? Is there an outside chance they would take a settlement offer? I think I would be better off paying in monthly installments if they would let me because that's how credit gets rebuilt. If any of these companies sue, then since I don't own a home or have any property, then they would attach my wages if I can't come up with the amount they want. I'm just trying to prepare myself for specific situations I will be dealing with soon.

[StaciMM]

The bad news: the creditors can go back & add full interest, etc. The vehicles, if the 13 included a cram down, will add back interest based on the full balance rather than the cram down.

It takes time for creditors to file suit, and my theory is that you'll be able to work out payments before that happens.

[esmith1515]

I understand there will be interest from the last two years I've been in the plan added on to what I have to pay back. What I'm curious about is will some companies automatically seek a lawsuit. I'm hoping if I contact them before they receive notification of my case being dismissed and try my best to convince them that I am truly ready to work with them to get my debts paid off that they will work with me also and give me a chance to show that I will be dilligent with my payments and get my credit situation back on a positive track. I've heard the student loans companies are should be willing to work with me. I hope the companies financing my two vehicles will be willing to also.

[SinkingFast]

After 2 rounds with our extremely sympathetic (sarcasm) mortgage Lender, I can only imagine what you are in for.

Our deepest sympathies, Bud.

[FDNYLadder124]

ESmith,
I hope you have a damn good game plan set up, cause one second after the creditors get the notice that your 13 was dismissed, they are gonna be up your ass and down your throat. And, my opinion, you stuck it to them once when you filed a 13, and they aint gonna get stuck by you again, in the 180 days you have till you can re-file, I believe they are gonna have a field day with your paycheck, bank account, the equity in your home, ect. ect.
Why oh Why didn't you square things away with your trustee? And why oh why did you think that missed monthly payments were "no big deal"?
Good luck bro, I hope the hell everything works out okay for you & your family.
Tonka Truck

[esmith1515]

I just wanted to mention that my case is not being dismissed now as my lawyer was able to convince the trustee that, as long as my payments continue to be made through a wage order, and there are no more payments missed, that I can continue in my chap 13. After all the scare tactics everyone used to try to convince me to work something out, I'm glad we were able to.

[alrac]

My bankruptcy was just dismissed for non-payment to the trustee, what can I expect from the mortgage company? What is 722 Redemption?

[StaciMM]

722 Redemption is a clause in ch. 7 bankruptcy where you can redeem secured property at current value. Does not apply to ch. 13. It is also the name of a company that does 'redemption loans' in order for people to redeem vehicles.

If your case has been dismissed, I'd imagine that one the mortgage company receives notice they'll most likely proceed with foreclosure if you are still behind.