In the process of filing...

[sonrisagirl]

Here is my situation...

I have gone through horrible year-long depressions twice in my life. The first time, I "woke up" to 30,000 in credit card debt. I went through a debt management company and paid off all of the debt. It was so, so hard but I worked extra jobs to be able to make payments. Thankfully, nothing major happened during those years and I wasn't stuck with a huge emergency. This was several years ago.

Vowed I would never allow myself to get into that position again. Not sticking to a budget and another year-long depression later, I'm at 34K in credit card debt. While I had a good experience with the debt management company the first time around, I found the amount of the monthly payments very difficult and not all creditors would become part of the plan. My credit score took a major hit, obviously, but i haven't been late on any payments since then and my score has gone up.

I met with an attorney a few weeks ago to discuss my options. By going the 13 route, I will actually have a lower payment than if I did a DMP and I know that creditors won't have a choice and cannot harass me. I am not worried about the monthly budgeting because I have done it before, at much higher payments. I will be on a 100% repayment plan for 5 years. Because of that, my attorney told me that I will be able to take a PT job if I want and be able to rebuild more of my emergency fund and savings and even pay off the debt sooner if I choose to do so. Until this month, when the attorney told me to stop paying my credit cards since I had started the c13 process, I haven't been late on a payment at all and am not behind. I will now be a month behind on all creditors within the next month.

I think I'm just a little scared. Will I be screwing myself for years by doing c13 instead of a DMP? Should I stop the c13 process and go another route? I like my attorney a lot--I'm just having last-minute second thoughts, I guess. Any thoughts or advice? Reassurance? LOL Something?

[keepsmiling]

Welcome to the forum!
A DMP is just missing one letter lol...."u"....
Without knowing much about your situation, I'm gonna guess a 13 would be a good idea for you. In this case, better than a 7. It will teach you how to budget and live on cash- which sounds like what you need. You may not necessarily be 100% tho. We can bang that around if you like. Keep reading and you'll see what I mean.
No judgments, just thinking. We're all in the same boat here.

[tobee43]

a 13 stays on your record for 7 years, a late payment the same...7 years.

as keepsmiling points out, it may be best for you to help you learn to budget and or manage your money in a more efficient way. at least you have a plan! or have began one. so good for you for taking a step forward towards helping yourself. you'll do the right thing.

and welcome to the forum!

[LadyInTheRed]

I met with an attorney a few weeks ago to discuss my options. By going the 13 route, I will actually have a lower payment than if I did a DMP and I know that creditors won't have a choice and cannot harass me.

Read your own words again for reassurance. In a DMP, you will still be paying interest to unsecured creditors. In a Chap 13, that interest stops. As you learned before, not all creditors will participate in a DMP. They have no choice in a Chap 13. A Chap 13 puts you in control and the payment is based on what you can afford, not what the credit card companies will agree to. You won't be forced to get a second job. But as your attorney advised, you can get one if you want. If your income drops, you can modify your plan in a Chap 13 or convert to a 7 if the drop is significant enough. Creditors aren't likely to agree to modify a DMP because it wasn't based on what you can afford in the first place. I'm not telling you anything you don't already know. You've made the right decision. Stop second guessing yourself and move forward.

ETA: Your credit score will probably start improving while you are in Chap 13. Did that happen while in a DMP? (I don't know if it does, but I doubt it).

[dgifta]

Sorisagirl, rather than address the financial question, I'm concerned about the emotional/psychological aspect.
When you say you woke up tp $30,000 CC debt, do you mean you didn't realize what you were doing?
I'm concerned about that state of mind, and it continuing to get you into trouble.
Are you getting some emotional/psychological support to examine that? I hope you can address that with some professional
who could help you become more aware of what you're doing with money.
I apologize if my response has been too personal.

[murph996]

I have a couple points to throw out there..

My score improved 70 points shortly after filing--although I had plenty of late payments and maxed accounts prior to filing.

I'm in a 100% plan and it is a lot less restrictive than plans paying less than 100% plans. You shouldn't have to provide tax returns, you wont have to provide any refunds to the trustee. They won't take any wage increases, etc. If you can comfortably make the payment in your 5 year plan - then you likely wouldn't qualifty for a plan less than 100%.

Basically a 100% CH 13 is a DMP with all interest stopped. Additionally it's **possible** that not all creditors will file claims and you will be able to pay off earlier than 5 years making the payment you are expecting based on your 34k of debt.

[sonrisagirl]

Thank you so much everyone for your replies--I really appreciate it! Just so nice to know I'm not alone. I meet with the attorney to sign on Friday. Hoping that everything will go smoothly since it will be a 100% plan.

dgifta--thank you for your concern and no reason to apologize. Yes, I am getting professional help. Trust me, definitely don't want to end up here again!

[murph996]

good luck! You will do fine. The key is budgeting. And learning not to be able to rely on cards or other methods of credit when things get tight.

[sonrisagirl]

Officially filed this week and have the dates for my 341 meeting (beginning of August) and my confirmation meeting (beginning of Sept). I wasn't very emotional about it until today, but I know this is the right decision. I think I'll feel more settled once everything is set and I start making payments. Having a plan is a comfort. Thankful for this wonderful site, that's for sure!

[AngelinaCat]

Congratulations on filing! You are on your way to your new life!

[dmc-2008]

Best if luck to you!