Voluntary Dismissal Question

[em96]

I am 1 year into my Ch 13. We filed to save our house from foreclosure and also included all our credit card debt. After 2 more payments, the past due amount on our house will be caught up. Once that happens, I was thinking about voluntarily dismissing my case. Before filing, the credit card companies / collectors were pretty good with settlements or repayment plans. If they are still willing and my house payments are up to date, I don't see why I should continue with bankruptcy. I crunched some numbers on paper and it looks like I can repay my credit cards without that huge monthly Ch 13 payment. Any advice or similar experiences from anyone would be appreciated. Thanks. We live in Pa if that helps.

[HHM]

Bad idea, you are far better off just staying with the plan. The damage is already done by "filing" the chapter 13, might as well stick it out and get your discharge. Keep in mind, you said, "before" you filed bankruptcy, they were good about settlements and payment plans, that won't necessarily be the case if you dismiss, especially with payment plans. You will need to offer lump sum settlements if you dismiss.

[frogger]

Don't do it! Debt settlement is the gift that keeps on giving. You won't like it.

[em96]

Wow, pretty stern answers. I thought it seemed like a good idea. But I see I need to give it a lot more thought. HHM are you saying creditors won't be as negotiable as they were before bankruptcy? And if so, why not? Thanks for your honest answers.

[papie]

There is advantage to finishing a chapter 13. That advantage is that creditors cannot come after you when you are in an active bankruptcy and they can't come after you after you complete the plan. If you complete your plan, the judge will discharge your case, and all of those creditors are done. It's all over and you are debt free. There is nothing those creditors can do to you.

If you have your case dismissed, they have full rights to sue you, have your wages garnished, refuse to accept a settlement, place a lien on your home, etc. When you filed bankruptcy they had to cease all collections activity. When the case is dismissed they can back charge you interest and fees. If they sue you, you will be eligible for all court costs also. It's highly unlikely that they're all going to say "sure, let's set up a monthly payment so you can take even longer to pay this off." They're going to see that your bk was dismissed and assume you can't even make chapter 13 payments, so why give you another chance? It's much easier for them to sue you and garnish your wages, which is a guaranteed payment.

I'm not saying that's what they're all going to do, but it's a pretty big risk. I think you would be better off finishing a chapter 13 and being done with creditors as compared to opening yourself up to collections, legal fees, and collection costs.

[secondtimer]

How about having your plan modified now that your secured/priority claims are satisfied?

[em96]

I guess I should just stick this out. I appreciate everyone's replies. Thanks