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    How Hard is a Chapter 13?

    Hi, I am brand new here and have been reading all the posts and have gotten very confused. I am considering filing for a chapter 13. I am noticing that everyone is speaking on how difficult and hard it is? I was under the impression that the payout while under a chapter 13 is less than what was being payed out before? Doesn't this leave more money every month? Why would that be more difficult? And answers would be greatly appreciated.

    #2
    Hi cborn. Welcome to the Forum.

    I moved your post from the back of that old thread, into a new thread of it's own. That way your question is more likely to be seen and responded to.

    I am an Asset Ch7, so do not have first-hand experience with a Ch13, although when we were planning for one.

    From what I read of people's experiences, it is basically an enforced budgeting process where someone else is monitoring your progress. This can last between three and five years. For a variety of reasons, many Ch13s are not completed. Many of those are converted to Ch7s. Others are dismissed. But a great many people are able to complete them and feel justly proud of their success and new start.
    "To go bravely forward is to invite a miracle."

    "Worry is the darkroom where negatives are formed."

    Comment


      #3
      Hello cborn: There is no sweeping generalization that applies in all cases when it comes to the difficulty or ease of getting through a Chapter 13 bankruptcy. Most people file for bankruptcy because they have no choice; and individual debtors who do not qualify for Chapter 7 are required to file for bankruptcy under Chapter 13.

      If you are "considering" filing for bankruptcy under Chapter 13, then you are probably trying to decide if it is a better idea than simply maintaining your debt load. One thing is relatively certain - unless you hit the lottery or receive a large inheritance, the chance of finally getting clear of unsecured, high-interest debt is virtually zero. You will just be throwing a great deal of your hard-earned money away if you decide to float your debt indefinitely. Some people are in a position to do that, but not many.

      Getting through a Chapter 13 plan successfully usually requires some lifestyle adjustments. Everyone's situation is different. My own Chapter 13 was an unbelievable cake walk. Others posting on this forum have been to hell and back. My case was easy because I am an old guy with no responsibilities - no mortgage, divorced long ago, kids are all adults, all my toys were paid for, my needs are few. That made Chapter 13 a no-brainer for me.

      Good luck to you.

      Comment


        #4
        Very well said. Thank you.
        "To go bravely forward is to invite a miracle."

        "Worry is the darkroom where negatives are formed."

        Comment


          #5
          Hey cborn, welcome to the forum. You are correct... a 13 theoretically shouldn't be worse than what came before.

          A WELL-PLANNED (caps for emphasis) 13 need not be hellacious. Most of the people here do NOT have terrible experiences with their plans, providing they found this forum first and understood such concepts as spending down excess cash, getting accurate and realistic estimates of their assets' worth, and providing in advance for their transportation needs. A WELL-PLANNED 13 can even allow for some emergency savings and perhaps even the occasional glass of bubbly.

          Additionally- it is entirely possible that you are not going to have to do a 13, but may instead be able to do a 7. We don't know because we don't know your story. But there are lots and lots of folks who were told initially that they had to be in a 13...and then learned that a 7 might be a better and/or viable option.

          Occasionally there will be a difficult trustee (see Alorth) or some other wildcard thrown in. But mostly, to paraphrase our esteemed Lady in the Red, "in 13 but NOT in hell". Good luck, keep reading and keep asking!

          Keep On Smilin'

          Comment


            #6
            Hello, it's hard to get used to being on a budget if you have never been disciplined with $. It's hard emotionally for a bit but that soon passes when you think about why you made the decision and you keep your eye on the goal. It's hard and stressful to wonder what might happen down the road that is out of your control while in a 13, such as health or job loss.

            Chapter 13 (ESP a 5 year plan) is not for the faint at heart! It's very serious commitment and that is the hard part for me. Once you are in it, there are no take backsies!

            Living paycheck to paycheck is easy when you don't throw away $ on interest, but it's not a cake walk either. I still need an emergency fund!

            Good luck,
            Discharge date: October 2017 (will it ever get here?)

            Comment


              #7
              Thanks so much for the replies and they do clear things up for me bit. I have been living paycheck to paycheck for a long while now and have racked up almost fifty grand in unsecured debt. We have 2 cars and an upside down mortgagee that is deliquent on property taxes. I just have dug myself a huge hole that I can't seem to climb out of. There is never any money left after all the bills are paid and it's been this way for a while. I truly could use some relief as I have learned a lot from this ordeal but I'm really scared to file bankruptcy. Man I wish I could just hit the lottery!!

              Comment


                #8
                Don't we all lol. You will be less scared as you become more knowledgeable. Startvrounding up some attorney's numbers and making at least 3 appts to discuss your situation. Then let us know what they said

                Keep On Smilin'

                Comment


                  #9
                  The best advice I will add is that you look into a lien strip of that second mortgage! The good news is you are underwater and can get rid of it as well as unsecured debt! That alone makes a chapter 13 the best decision I ever made! Keep posted, see a good lawyer, and you will then see some light at the end of the tunnel. One adviser here says if you can't pay off your debt I. Five years alone then you should file. There was no way I could pay it off and I am in my 50s so retirement is looming! It is really a financial strategy for those of us that are in too deep. Good luck!
                  Discharge date: October 2017 (will it ever get here?)

                  Comment


                    #10
                    Chapter 13 is not a cakewalk, but it's not a jail sentence either. We, like many other posters, have experienced ups and downs over the course of our plan. We have had to watch our finances closely and put enough away each month to cover the inevitable surprises that will occur over 3-5 years (heat pump, water heater, plumbing disaster behind the wall etc)

                    With all of that, we were still able to take a family beach vacation each year, albeit much more modest than previous vacations. By not spending money on frivolous items and questioning every expenditure on the basis of is it an absolute need or just a nice to have, we have managed to save a respectable reserve fund.

                    All through the course of this plan, I have questioned whether it was worth it and the answer is still yes. Had I been in possession of more knowledge upfront, I might have positioned myself better for a Chapter 7, filed earlier and avoided wasting a lot of retirement funds trying to dig myself out of a hole that was already too deep. I didn't do that, so Chapter 13 was the best option for me even though I could have qualified for a Chapter 7.

                    The prize at the end of the tunnel will be no debt, other than student loans and a house that was 30% underwater when I filed but is currently 10-15% positive equity because I was able to strip out a large second trust.

                    So, do your homework, talk with several attorneys and decide what is the best strategy for you.

                    Comment


                      #11
                      Yes. If you are considering bk you already know that you cannot sustain your current lifestyle. A good attorney will help your decision making whether it be a 7 or 13. Your income and assets you want to keep weigh heavy on the chapter you file. Getting a good attorney is vital in completing a livable 13 plan. We saw at least two before making a decision. Our plan has been quite livable and vital lessons have been learned throughout our last 4 years. We have only 10months to go and I can tell you we look at everything that involves $$$$ differently. No $$$, no buy!
                      Filed July 2009. Discharged 08/08/2014. Awaiting closing. We made it !!!! Woo-hoo!

                      Comment


                        #12
                        agree with all the others; Ch. 13 isnt a cake walk, but its not that difficult either. You must know / learn how to live within a cash budget and be realistic with what you can afford. First thing for any one to look at entering into a Ch. 7 or Ch. 13 is what can you afford within your budget?

                        One of the big questions for those looking to file Ch. 13 should be, if you're attempting to strip your 2nd, can you afford the house even with the 2nd stripped off in the long run?

                        Remember, Murphy comes knocking all the time, so make sure you have a way to have those unpredictable moments covered. We've had so many things happen during our 3+ years in our CH. 13 plan thus far and I'm amazed we've made it though all of them at times. It hasnt been easy, but we've come through them all.

                        Comment


                          #13
                          Originally posted by Pandora View Post
                          Remember, Murphy comes knocking all the time, so make sure you have a way to have those unpredictable moments covered. We've had so many things happen during our 3+ years in our CH. 13 plan thus far and I'm amazed we've made it though all of them at times. It hasnt been easy, but we've come through them all.
                          Yup! And remember this 'Cat IS a Murphy--with three independent Murphy lines! I know all too well how all of those laws work!
                          "To go bravely forward is to invite a miracle."

                          "Worry is the darkroom where negatives are formed."

                          Comment


                            #14
                            I am 35/48 months into my Chapter 13, and while it certainly is not easy, it is not one of the worst things that has ever happened to me. Mostly I get by by acting as if I hope to qualify for the "Extreme Cheapskate" show Maybe not quite that bad, but I've learned to question every little purchase, whether I want it or really need it.

                            Comment


                              #15
                              Originally posted by cborn View Post
                              Hi, I am brand new here and have been reading all the posts and have gotten very confused. I am considering filing for a chapter 13. I am noticing that everyone is speaking on how difficult and hard it is? I was under the impression that the payout while under a chapter 13 is less than what was being payed out before? Doesn't this leave more money every month? Why would that be more difficult? And answers would be greatly appreciated.
                              Why do you think you must file a 13?
                              Have you consulted with any lawyers?

                              Comment

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