Is Chapter 13 really that bad?

[Newday1]

Please, I am not meaning to insult anyone going through 13. I am just a little anxious over having our lives scrutinized for 3-5 years by someone who does not know us or have our best interest at heart. My spouse and I may not qualify for a 7, so I am coming to the 13 boards for a little encouragement.

Also, an attorney we looked at, seemed confident that our payment would not change over the course of the plan. I brought up my concerns about if my spouse's income increased would we have to pay more. He shook his head "no". Maybe it is just our district, but he was adament that the payment would be solidified and not change.

Thank you.

[AngelinaCat]

What district are you in? We are Florida Middle (Jacksonville). But there are huge differences in the different parts of Florida Middle District. I have read of trustees requiring home appraisals in the Tampa-Sarasota part, which the trustees in Jacksonville seem not to require.

As for payments, DH and I filed a Ch7, so do not have first hand experience with a 13, but I have read of some Ch13 trustees requiring payment plan increases when notified of an increase in income. (You are required to notify the trustee of changes in your income.) Also, you can request a modification to a lower payment if your present plan becomes too arduous for you. Read through the Chapter 13 board and you will see all types of experiences.

You are in the very beginning planning stages, though. You may very well be able to do a Ch7.

Just don't settle for only one or two consultations. If you have any doubts regarding the attorneys you have seen so far, keep looking. Read through the boards and get a good idea of questions to ask a prospective attorney.

Good luck to you and welcome to the forum.

[woeisme]

my trustee doesn't care about any change in income that is 10% or less at a time (so my 3% annual raises cause no changes in payments) and even told us we could take on overtime if we wanted to with no penalty. he thinks it is in the best interest of the creditors for people to complete their CH 13 plans as opposed to those trustees who seem to think making CH 13 so painful that people drop out of them is somehow in the best interest of the creditors. but as AngelinaCat said, every trustee is different so your lawyer is the best source of how your particular trustee acts, and it seems your lawyer is saying your trustee is reasonable.

[TheBajan]

The three years leading up to our chapt 13 was far worse the the 9 months we have been in it. Every trustee seems to be different. Make sure you find an attorney who really knows your particular trustee, not just the general bankruptcy practices in your area. Our trustee is only interested in our tax returns. He could raise our payment but our atty said it's not the norm and only if we have more than a 10% increase in income.

BTW.... welcome!

[Newday1]

Thank you to everyone who replied! We are in the middle district and our attorney is very knowledgable of the TT's in our district. That will prove to be very helpful I am sure. Thank you to those who have also shared how BK has impacted your lives. It seems like most people agree that life is better after.

Thanks again for your feedback.

[katztoo]

The chapter 13 gave us a great payment relief. Before 13 we were paying $1200 a month on unsecured debt and $600.00 a month on car loans for a total of $1800. Our plan payment was $874 including both cars. We have completed our five years and are waiting for discharge now. The cars were paid in full and unsecured got 10%. It was a long five years but it was worth it. We were paying the minimums and would have never paid it off. It also taught us a big lesson...never get in debt again! Its nice to actually have money left at the end of the month now that we don't have to pay to creditors. Our payment did go up once by $114 but that was because we changed the exemptions on my husbands pay so that we would bring home more money and switched to a HSA (they said a HSA doesn't count as an expense so that is "disposable income"

[salsa]

We are 5 months into a 60 month plan. So far we have a pretty liveable plan. All I know it's nice not being afraid to open the mail anymore...

[angel7821]

We are 5 months into a 60 month plan. So far we have a pretty liveable plan. All I know it's nice not being afraid to open the mail anymore...

I so agree with the mail part of this post!!

[AngelinaCat]

The chapter 13 gave us a great payment relief. Before 13 we were paying $1200 a month on unsecured debt and $600.00 a month on car loans for a total of $1800. Our plan payment was $874 including both cars. We have completed our five years and are waiting for discharge now. The cars were paid in full and unsecured got 10%. It was a long five years but it was worth it. We were paying the minimums and would have never paid it off. It also taught us a big lesson...never get in debt again! Its nice to actually have money left at the end of the month now that we don't have to pay to creditors.

Our payment did go up once by $114 but that was because we changed the exemptions on my husbands pay so that we would bring home more money and switched to a HSA (they said a HSA doesn't count as an expense so that is "disposable income"

I have to bookmark this post, as there is another thread about whether HSAs are protected or not. It is a matter that seems to be largely undecided, and is dependent on the individual State exemptions, and/or the individual BK districts.

Here, you have told us how South Carolina views HSAs. Thank you!

[KAM465]

Woeisme,

Curious what Ohio district are you in, I am about 6 months in my Ch13 after converting Ch7 originally file Oct 2011. Planned Confirmation was Sept 2012 5%.

Have a potential pay increase of about 10% but want to stay under the radar since I will have to petition to incure debt late spring next year when my car lease expires and will have to get a new/newer car to replace it.

I am in the Northern District of Ohio - Akron Region.

KAM

[spidge]

People are getting raises? That sure would be nice. Its been 6 years since the rate has increased for my position. Many employers around here have the attitude that any monkey can do your job so take it or leave it, and that includes more work and overtime than one can sustain for very long.

OK, stepping down to get back to the topic.

I just completed my 2nd full year of payments , and there have been some challenging times. I have had a small emergency fund here and there, just to end up spending it on life's needs. My wife totaled her van shortly after we filed, but that worked out OK so far. The replacement car needed a major repair a year later, but we had the cash, and even though it drained us it was nice to not have to worry about where the cash came from.
One of my biggest challenges has been taxes. I try to get as close as possible so there is no refund, but I missed by a grand the first year and am making small strides on that balance. Another is that my wife seems to race me to the cash causing shortages. We have both learned to communicate much more effectively to better insure that shortages are avoided. We always have different ideas on what we need to do for the family, and that's OK. We just need to manage it.

So, life is better overall.

[katztoo]

I have to bookmark this post, as there is another thread about whether HSAs are protected or not. It is a matter that seems to be largely undecided, and is dependent on the individual State exemptions, and/or the individual BK districts.

Here, you have told us how South Carolina views HSAs. Thank you!

We had a regular plan when we started the bk and our insurance cost was a permissible expense. When we switched to a HSA it cost us $100 less a month and we put $100 a month in the HSA (and spent it all on medical expenses). That and the $14 less being taken out of our pay made our payment go up $114.The trustee discovered this through asking for our pay stubs because we didn't get a tax refund. Maybe they look it it like you are saving the money but we did spend it all on medical expenses every year. We switched back to a regular health plan last year but since we were nearing the end of the bk we didn't bother to get our payment reduced.

[LadyInTheRed]

Is Chapter 13 really that bad?

Assuming you are not try to keep assets you can't afford, you have a competent attorney who will get a reasonable plan confirmed, you are willing to make any changes necessary to live within your means, and you have no decrease in income during your plan, no, it's not that bad at all. That may sound like a lot of conditions, but only one is beyond your control and there are ways to cope with it if it happens.

I just made payment 31 of 60. As soon as I filed, I had more money to spend then before I filed. I was paying about $1100 per month to credit cards and my second mortgage. Those payments were replaced by a $500 plan payment, most of which goes to pay off the car I bought a month before filing. After 29 more payments, I will have discharged the $88K 2nd mortgage and $30K in credit card debt (other than less than 1% they will be paid) and my car will be paid off.

Nobody is scrutinizing my life. With 2 annual raises and a 3rd raise that came with a promotion, my income has increased by over 10%. Every time I tell my attorney about a raise he says "congratulations, keep making your plan payments." There are trustees who will go after increase in income, but based on what your attorney has told you, it doesn't sound like yours is one of them.

I am still adjusting to not being able to pull out a credit card when I need or want something I don't have enough cash to pay for. But, it feels great to know that I will not be working the rest of my life to pay off creditors like I would if I hadn't filed BK.

[lillymarlene]

I am now 25/48 payments into my chapter 13, and living this way is tough but doable. It seems that I just finish one thing, last week I made my final payment on my back taxes for 2010, and now I need a lot of dental work. I just found out if I don't start tending to my teeth soon, I'll probably be running around with a badly fitting pair of cheap dentures. Then, of course my old car needs repairs.

But there is an upside to living this way. I sure have learned great patience, waiting for things instead of mindlessly reaching for a credit card. I'm no longer digging my black hole of debt deeper and deeper. Like salsa, I'm no longer afraid to open the mail or answer the phone anymore.

[Newday1]

Wow, thank you to everyone for sharing. It seems like even though it might be tough going through it, that there is a common theme and that is theme is a sense of "relief". I really appreciate hearing your stories. I since have gone back through old posts and it is evident my question has been asked before. I guess I am pretty normal for being a bit anxious over change. But, I am glad for the change. I am really very glad...And, great job to all of you who have finished the plan or who are in the midst of it. Time passes and it will soon be behind you! I am pretty confident we have a great lawyer. He has been doing bankruptcys in town over 40 years. He is quite possibly the oldest BK attorney in town. Well, he says he is. He has been extremely patient and he listens. I think my spouse and I need to spend more time listening to him and not interupting him. I am sure we will learn a thing or two and we don't want to miss important instructions.

Thanks again to everyone who shared..