Chapter 13 payback

[rwcook]

I am very confused about my wifes chapter 13. Our lawyer has us figured for a 100% payback. I agree with this because I make enough money and we have extra money each month. Basically she claimed $11,000 in unsecured debt. Our payments were around $450 per month to our creditors. Now it is $250 through the BK. She had the 341 meeting today and all went well. None of the creditors showed up. My question is if none of the creditors contest the discharge after the 90 days, are we still obligated to pay the full amount? We are, by no means, complaining about it but just wanted to know how that works with the creditors. Our lawyer is not too helpful and he does not speak english too well. LOL

[alh]

Just a guess, but the payment difference might be due to interest charges (or lack thereof) during BK

[SinkingFast]

That's actually about right. $250/mo to pay back $11K over 5 years.

A 5 year car loan of $12K, or so, at 7.25% apr, was costing us $253/mo.

You figure in what ever % the Trustee will take and it's about the same.

The dollar amount of the payback get's set when you file. If you continued paying the CC's normally, interest would continue to accrue each and every month.

[aa06a47]

Your creditors must file a claim in order to get paid. As long as they all file claims, they will get paid. If they don't file a claim, then your 13 may get over with sooner.

I have a question, with only 11K in credit card debt and a good income why file bankruptcy?

[rwcook]

Mostly because she had alot of medical bills that went to collections as well as credit cards. When we went to speak to a lawyer, we thought that she had two additional credit card in her name but actually they were in both names. Since we did not add those to the list it reduced the amount we claimed. Since the payments were around 200 cheaper, interest free, she decided to do it anyways. Also, we always had the theory that we would not charge on them and every month they were maxed out. This is one way to keep from charging everything.

We do not need her income for any other reason but for extra spending money. And she always takes her money and does what she wants with it. She is a great wife and an exellent mother so she deserves it.

What determines if it will get discharged early?

[Jman30]

Mostly because she had alot of medical bills that went to collections as well as credit cards. When we went to speak to a lawyer, we thought that she had two additional credit card in her name but actually they were in both names. Since we did not add those to the list it reduced the amount we claimed. Since the payments were around 200 cheaper, interest free, she decided to do it anyways. Also, we always had the theory that we would not charge on them and every month they were maxed out. This is one way to keep from charging everything.

We do not need her income for any other reason but for extra spending money. And she always takes her money and does what she wants with it. She is a great wife and an exellent mother so she deserves it.

What determines if it will get discharged early?

Ok, before I start on this....please note that I am not trying to be a jerk or judegemental. Ask anyone on this board.....that is not my style. But there is so much about this post that caused me have to read it over and over to make sure I was seeing it right, I have to at least respond with my thoughts.

When we went to speak to a lawyer, we thought that she had two additional credit card in her name but actually they were in both names. Since we did not add those to the list it reduced the amount we claimed.
How did you have two credit cards floating around out there under your name and you didn't know??? Did she know??? This isn't something all that common...it begs the question how many other credit lines out there are in your name that you don't know about?? Also, what do you mean she did not add them to the "list"??? If it is debt, you are REQUIRED to add it to your list of debts. You can't cherry pick. Additionally, if the credit cards are in your name as well, you will have to be included in the Chapter 13. You are both jointly responsible for that debt....the CC's will just come after you if you are not on the BK filing.

Also, we always had the theory that we would not charge on them and every month they were maxed out. This is one way to keep from charging everything.
I am working on the theory that is sentence is a joke, right? To see if we are paying attention?? Are you saying that you maxed out your credit cards in order to prevent you from charging on them any further???????

We do not need her income for any other reason but for extra spending money. And she always takes her money and does what she wants with it. She is a great wife and an exellent mother so she deserves it.
Maybe this is the problem. She just declared a Chapter 13. You stated there were unpaid medical bills and unpaid credit cards. You also stated that you have extra money every month and make a good salary. Yet, your wife, whom I have NO DOUBT is an excellent wife and mother, is out spending her money any way she wants????? Why wasn't this extra money going towards the medical bills or the credit cards?? If you had the sort of debt that was pushing you towards a Chapter 13, she should not have been spending the extra money any way she felt like it.

I don't mean to get on a soapbox and maybe I am misunderstanding what you are saying here......but it seems there are two types of people who declare BK: Those who really have bad luck or life throws them an unforseen circumstance or disaster or emergency and they have tried to pay their bills....and they have no choice. And then you have those who declare it because they just simply felt like spending their extra money on whatever they wanted instead of paying their bills.

Maybe I just woke up on the wrong side of the bed this morning. But I look at when my wife and I saw things heading towards BK...we took EVERY single extra penny and tried to avoid BK. My wife's "extra money" was no longer extra but was a critical source of income as we tried to stave off having to file BK. Even now, 20 months in a Chapter 13, we have no extra money. We track every single cent that comes into the house.

I don't know your circumstances and I apologize if I have offended, but it seems like you need to get control of what is going on. There is no way there should be two credit cards out there and you don't know that they are in your name. If you have unpaid medical bills and maxed out credit cards, there is no way your wife should be spending her "extra" money any way she chooses. And above all, maxing out your credit cards so you wouldn't be able to use them....well, I don't even know what to say about that.

Ok....everyone can smack me around now for being grumpy. I deserve it.

[SinkingFast]

Ok, before I start on this....please note that I am not trying to be a jerk or judegemental. Ask anyone on this board.....that is not my style. But there is so much about this post that caused me have to read it over and over to make sure I was seeing it right, I have to at least respond with my thoughts.

Also, we always had the theory that we would not charge on them and every month they were maxed out. This is one way to keep from charging everything.

We do not need her income for any other reason but for extra spending money. And she always takes her money and does what she wants with it. She is a great wife and an exellent mother so she deserves it.

I don't mean to get on a soapbox and maybe I am misunderstanding what you are saying here......but it seems there are two types of people who declare BK: Those who really have bad luck or life throws them an unforseen circumstance or disaster or emergency and they have tried to pay their bills....and they have no choice. And then you have those who declare it because they just simply felt like spending their extra money on whatever they wanted instead of paying their bills.

I don't know your circumstances and I apologize if I have offended, but it seems like you need to get control of what is going on. There is no way there should be two credit cards out there and you don't know that they are in your name. If you have unpaid medical bills and maxed out credit cards, there is no way your wife should be spending her "extra" money any way she chooses. And above all, maxing out your credit cards so you wouldn't be able to use them....well, I don't even know what to say about that.

Ok....everyone can smack me around now for being grumpy. I deserve it.

I think the OP was saying if they filed BK, that would be a way to insure they didn't use CC's to pay regular monthly bills.

But I do hear ya, JMan. There are other ways to avoid using CC's than filing BK. Much less detrimental ways, I might add.

RW,......... You do realize that this, BK, is gonna be on your Credit Reports for at least 7 years?? That you cannot take on new debt, except to buy a house or a car and only with the permission of the Trustee after being in the plan for a year, the whole time you're in Ch 13 don't you?? BK has serious consequences.

The second point you made, JMan,....... About one spouse's income being theirs to spend as they want and not contribute to the Household expenses,.......

We know a couple like that who are in the process of filing Ch 13. The guy has a side hobby where he got paid. Umpiring for High School and College level games. His hobby not only brought in money, but cost money too. Shoes, shirts, pants, gear. Whenever the guy bought umping stuff, he spent Household funds for that. Whenever he got paid for umping, the money was his to spend as he saw fit. The wife kept telling him he needed to put back what he spent at the start. Then she tried to tell him "they" needed the money to pay bills. He didn't listen. Now they are filing Ch 13.

When you're in serious trouble with bills, there is no "Her money to spend as she see's fit." All money that comes into the Household is for the benefit of the Household.

When you sit down with an attny or the Trustee and go over your income and expenses, the attny or Trustee isn't gonna set her money aside and say, "OK! That's her money to spend as she see's fit." The attny or the Trustee are gonna include that money in the overall Household Income toward paying Household bills.

[rwcook]

First off with all due respect you do not know every single detail. I tried to explain it as "brief" as I could to get the point across. Maybe I did not explain every detail. The past 4 years I worked on average 600 hours of overtime. I make good money when that occurs but so far this year, I have worked maybe 15 hours. So needless to say, we are not making it.

There were two credit cards that we opened about 10 years ago. I assumed they were hers because they came addressed to her, I never got a credit card in my name and it showed up on her credit report. It wasnt until I got my credit report that it showed on mine as well. Maybe 10 years ago we both took out the line of credit. No big deal. We will just keep paying on them as we always have. The lawyer asked us if we wanted him to include them on the BK and I said no because I did not want the BK to show up on my credit report. He said no problem because as long as we are paying on them every month, it was ok. He does have a record of all the debts my wife has because he has the Credit report. Right or wrong who know, our lawyer is not too sharp.

By no means did I mean that we max them out so we can not charge on them. That was written as a joke. Yes my wifes credit cards are maxed out. I think that everyone on this forum has done that one time or another. Call to see what the balance is so you can buy the baby diapers, wipes, clothes and sometimes groceries to live. That is what I meant by them being maxed out. I also did not mean that she is out spending it on foolish things, we have one child in private school and she has paid for that the entire time. That costs us $300 a month. Without getting too much into my personal life, she felt like I have been paying all the bills, and she wanted to contribute to the bill so she wanted to pay her bills as well as the tuition cost.

If it means declaring BK in order for my kids to have the best education (public schools are not great in my town) and have clothes on their backs, well, it was a no brainer.

Roll over to the other side of the bed tomorrow. Your grumpy today. LOL

[Jman30]

Well, I admitted I was grumpy! I apologize if I offended you...it was not my intention at all.

You explained yourself much better in the second post than the first - I understand what you are saying.

However, you have to admit...the way you stated that "And she always takes her money and does what she wants with it" leads one to believe that it was being sent on frivolous stuff.

Usually, the more information you can provide and the more details you can provide, the better. BK is such a complex thing that it is tough to discuss without knowing your situation in as much detail as you care to divulge.

But you are right....I am grumpy today. I am just days away from doing a Chapter 13 buy-out via a refinance and I am so close I can taste it...I was up all last night thinking of all the things that could go wrong......I am convinced the bottom will drop out and I am freaking myself out.....

[rwcook]

You do not have to apologize, what I want to say is never what is typed. I suck at typing. I always forget the details. I agree, y previous posts did indicate that she spends the extra money on whatever she wants. Which is so far from the truth. My wife cries because we do not go on vacations, can not take my kids to the local carnival etc. I keep telling her we do not have the money for that. We almost got divorced because of all this and I do not want anybody to think that I am taking this BK lightly. I cry when I read some of the other people on this forum and the hard luck they are dealing with. You included. I thank everyone for the feedback and I am sorry if I gave everyone the impression I was "not responsible" for my debts.

Congratulation on your success. As everyone will agree it has been a long time coming and without even knowing you, I know you deserve it. Take care.

[rwcook]

Now that everyone knows alittle about my situation can you answar me this:

1. My wife filed chapter 13 on her own. None of the unsecured credit is under my social security number. Will this BK show up on my credit? (Lawyer said NO)
2. I think I know the answar from previous post but if none of the unsecure creditors contest the bk (not sure if I am wording it right) will we only have to pay the trustee, lawyer and not them? Will that lower our payment or just shorten the length of time?
3. What happens after the meeting with the creditors. Obviously we start making payments, but what are some of the things that would confirm or not confirm the BK?
4. Is it safe to say that even if you finish the repayment plan nothing is guaranteed until they discharge the BK.

[lrprn]

Let's see....

Now that everyone knows alittle about my situation can you answar me this:

1. My wife filed chapter 13 on her own. None of the unsecured credit is under my social security number. Will this BK show up on my credit? (Lawyer said NO)

If her unsecured debt is not connected to you in any way, then it should not appear on your credit report. If it does (sometimes happens when you are listed as an authorized user on a credit card), you should contest that as incorrect and get it removed.

2. I think I know the answar from previous post but if none of the unsecure creditors contest the bk (not sure if I am wording it right) will we only have to pay the trustee, lawyer and not them? Will that lower our payment or just shorten the length of time?

Won't lower your payment, just gives a higher % payback to those who have given notice to the trustee and courts that they want to be included. Typically this won't shorten the length of time either EXCEPT when the amount you are paying exceeds 100% payback over the currently allotted number of months - then you may see a shorter time period.

3. What happens after the meeting with the creditors. Obviously we start making payments, but what are some of the things that would confirm or not confirm the BK?

You must make your first payment to the trustee WITHIN 30 DAYS AFTER FILING!! Your case can be dismissed if you don't. Depending on your individual case, there are many areas for potential objections - too many to list here.

4. Is it safe to say that even if you finish the repayment plan nothing is guaranteed until they discharge the BK.

Although it would be very unusual for a confirmed Ch 13 plan to have problems after it's successfully discharged, if there's one thing for sure, never say never when creditors and their lawyers are involved!

Hope this helps!

[Jman30]

Can't even add to that...lrprn said it all!