Another question regarding to choose a 7 or 13>

[mesa777]

Can someone please advise me how the chapter 13 bankruptcy is decided. I can barely make my payments each month on my current salary. I spoke to an attorney today and he told me that I would have to file a chapter 13 repayment plan.

Dont know how the heck I will be able to repay more than $50 a month. I make $52,000 a yr, am single and live in AZ. Dont really understand how I am being forced into a chapter 13 bk when I cant even pay the bills I have now!!

Can someone please shed some light on this. Is there some sort of a hardship situation if someone can barely pay there bills, and thats before the bk filing.

Thanks!

[coma]

In a 13, they take your income, deduct allowable expenses in your budget and deduct secured loan payments that you plan to keep, and what is left, your disposable income, is what you pay into the plan. You do not count your unsecured payments. If you make 3500 per month after taxes, you can deduct your living expenses (housing, utilities, clothing, food, transportation, household goods, cell phone, insurance etc) from that. If you have 3 k in expenses, then you are left with $500 disposable which is paid to the trustee for his benefit, attorney fees, arrearages (if any) on secured property you want to keep, back taxes, and lastly, unsecureds.

That is a very simplistic way to explain it, but basically, that is what they do. You will ahve to tighten your belt on expenses, such as try to reduce electricity consumption, cut food bill, eat out less, have less recreation, etc, to make the payment. You are not paying your credit card bills on top of that, though.

So, if the plan is viable, it will leave you enough to live, though not as lavishly as before, and enough to apy your trustee. However, there is not much room for savings and emergencies are not budgeted in, so that can be a problem if a car breaks or a big medical emergency happens, though the plan can be adjusted for that.

[nc73]

Can someone please advise me how the chapter 13 bankruptcy is decided. I can barely make my payments each month on my current salary. I spoke to an attorney today and he told me that I would have to file a chapter 13 repayment plan.

Dont know how the heck I will be able to repay more than $50 a month. I make $52,000 a yr, am single and live in AZ. Dont really understand how I am being forced into a chapter 13 bk when I cant even pay the bills I have now!!

Can someone please shed some light on this. Is there some sort of a hardship situation if someone can barely pay there bills, and thats before the bk filing.

Thanks!

If your primary debt is credit cards, going into the plan would rid you of most of that debt. So in reality you should be able to afford it under chapter 13. It will work out. It will just suck for 5 years. All you have to do is make less than the median income for AZ and you are set.

[danaf]

In order for you to qualify for a ch 7 in AZ as a single person, you'd have to be making $39,811 or less. If you were married you'd might be able to qualify under your current salary.

But you don't so your only option right now is a 13....that is if you stay at your job, don't move, etc.

I'm not sure but you might be able to save your house if you go with a 13 - and the creditors would get less. I think....not sure. Others will clarify.

[jp2861]

If your primary debt is credit cards, going into the plan would rid you of most of that debt. So in reality you should be able to afford it under chapter 13. It will work out. It will just suck for 5 years. All you have to do is make less than the median income for AZ and you are set.

How do you figure filing a 13 will rid him of unsecured debt? Any disposable income will go towards paying the debt off for 3 - 5 years. That's hardly ridding him of the debt.

[nc73]

How do you figure filing a 13 will rid him of unsecured debt? Any disposable income will go towards paying the debt off for 3 - 5 years. That's hardly ridding him of the debt.

I said most not all. Who knows he might end up paying everything. I don't know just guessing at the moment. If he doesn't file it will take him much longer. 3-5 years is nothing.

[Bandit]

Can someone please shed some light on this. Is there some sort of a hardship situation if someone can barely pay there bills, and thats before the bk filing.

Thanks!

Well, if you lost your job or fell off a bridge & suffered serious injuries so you could not work for several months, then that would qualify for hardship. Or like farmers & the crops fail with his wife ill, then that would qualify.

Or you could have lost to stolen property... maybe get called into the military.

What kind of hardship do you have?

[lrprn]

Can someone please advise me how the chapter 13 bankruptcy is decided.

Check out these links that explain how Ch 13 works first - http://www.uscourts.gov/bankruptcyco...chapter13.html and http://moranlaw.net/13workings.htm#C...013%20practice

As already explained, in an overly simplistic way, all payments to your unsecured debt are removed from your income/expenses flow, then your six months' income and allowable expenses that are left are plugged into the Means Test and Schedules. The disposable income to pay into the ch 13 plan comes from not paying your non-secured creditors at 100% (usually).

To me, since we can't file Ch 7 due to our incomes, I'd rather pay the court for five years and emerge with no non-secured debt at all just like Ch 7 filers do than struggle with a mountain of debt we can NEVER reduce for the rest of our lives until we die. It's all a matter of perspective.