Going to file a 13, questions

[drivermom]

In order to save my house from foreclosure, I'm going to file a 13. I have spoken to an attorney. I have some general questions.

1) So, at some point in the pay off I can refinance and pay off the 13? How does that look on the credit report?

2)If one of my creditors is a cell phone company, how hard is it to get an account with a cell phone co?

3) So, if I have some bad checks outstanding, can I file on them too?

Anyone have advice on staying on a budget?

I know these questions sound dumb but I appreciate your responses. Thank you for all the info on this site.

[Jman30]

Your questions are not dumb - I had these same questions when I first filed in Dec 2004. I wish I had found this board back then, but I didn't find it until months after I already filed. This board would have saved me a ton of stress and sleeplessness had I found it earlier.

So welcome to our little community!!

Let's look at your questions:

1) So, at some point in the pay off I can refinance and pay off the 13? How does that look on the credit report?
Yes, you can! I am in the process right of doing it right now. There are some things you need to know though. If you are paying back LESS than 100% and you refinance BEFORE the 36th month (3 years) you will have to pay back 100% of the debt instead of whatever % you are paying. Additionally, and this may obvious but many people don't think of it....you need enough equity in the house to cover your mortgage plus the chapter 13 plus a little more, because you will never get 100% LTV. Lastly, you need at least 12 months of consecutive ON TIME payments before you can even consider a refinance buy-out of your Chapter 13.
BOTTOM LINE: If you are paying less than 100% in your Chapter 13, it is best to wait until the 36 payment to try to refinance. If you can't wait that long, you need to wait at least until the 12 month.
And as far as how this looks on your credit....don't worry about that. If you are filing BK your credit is probably already messed up. Worrying about your credit at this point is just an added stress you don't need. Check out the Rebuilding Credit forum for information.

2)If one of my creditors is a cell phone company, how hard is it to get an account with a cell phone co?
Probably almost impossible. Your best bet here is to get a Pre-Paid Cell Phone. If you do find a company that will give you a cell phone on a monthly plan, they will probably want a few hundred dollars down as a deposit. And in a Chapter 13, you won't have that lying around.

3) So, if I have some bad checks outstanding, can I file on them too?
You can file the receipient of the check as a creditor. Say you bounced a check on your mechanic. You include the mechanic as a creditor so he can no longer collect on you. Do you don't file the checks themselves...you file on the payee.

Anyone have advice on staying on a budget? BUDGET BUDGET BUDGET. Nothing will teach you how to budget better than being in a Chapter 13. Watch EVERY penny. Start cutting luxuries - dump the top of the line cable TV package and downgrade to basic cable TV. Dump your phone and maybe do an internet phone like vonage. Vacations? Forget them. Name Brand Foods? Nope - start loving the store brand labels.

Hope some of this advice helps and don't feel bad about asking any question. There are so many people here who are helpful such as Miinnymouth, 13inOR, BKbiker, SinkgFast and so many others.

[lrprn]

Great answers, JMan! Just one thing....

I hate to throw a bucket of cold water in here, but under the new bk law passed last October, it's not a given any more that you can pay back early or at less than 100% after a certain period of time. Currently it's dependent on your trustee and local district practices, and it's a real moving target at the moment with more cases coming before the bk judges for decisions about this all the time. For example, a recent case in Missouri moved things towards requiring a 100% payback no matter when you pay off early during your 13 plan . It's still possible (thank god!) to pay off early under the new law (especially when you have a less rigid trustee), unfortunately it's just not as straightforward as it was before the new law passed.

[coma]

Great answers, JMan! Just one thing....

I hate to throw a bucket of cold water in here, but under the new bk law passed last October, it's not a given any more that you can pay back early or at less than 100% after a certain period of time. Currently it's dependent on your trustee and local district practices, and it's a real moving target at the moment with more cases coming before the bk judges for decisions about this all the time. For example, a recent case in Missouri moved things towards requiring a 100% payback no matter when you pay off early during your 13 plan . It's still possible (thank god!) to pay off early under the new law (especially when you have a less rigid trustee), unfortunately it's just not as straightforward as it was before the new law passed.

I really think that that is the key...the case law here is going to be huge when all of these issues shake out. Stay tuned...

[Jman30]

You are both right...I filed under the OLD laws, so I forget about new law sometimes.

[coma]

You are both right...I filed under the OLD laws, so I forget about new law sometimes.

Yup...that was my only saving grace. The CH7 was old law, so even though we had to convert in Feb., it was still old law...thank heavens!