Told Have to go Chapter 13

[hybenamon]

Folks,

I could go into all the reasons (most of it stupidity), but my wife and I have decided to go with filing bankruptcy.

I am retired and my wife works. After taxes we have a combined income of almost $4,000. We have a house worth according to the paper work of about $110,000.00 and have equaity of around $6,000. House payment is around $1,000.00 According to what I have read we don't have enough equaity for them to come after it under our state laws.

We have two older vehicles paid off worth $2,600.00 and $1,900.00. And a secured travel trailer. Very little in the bank.

Now the bad news. We have $120,000 in unsecured debit -- ie Yes, credit cards. None of it built up fast in the last two years either. It was over time.

We thought we could declare Chapter 7. We knew we would loose the cars, the small bank account and our income tax return. But the lawyer we went to stated that we would have to go Chapter 13.

I have read up some and from what I have read Chapter 13 is for those that have property they don't want to loose, etc. But we are willing to give up everything but the house and there is not that much equality.

According to what I have read, in Chapter 13 you have to be able to pay off all or most of the debit. If we do that we will have to pay $2,000.00 to $3,400.00 A MONTH. And even if it is just $1,000 a month if we have any disaster we won't have any spare money saved. The lawyer has already stated they will want the income tax return. It has my wife worried sick.

And I have checked, Chapter 13 is like having no credit till the bankruptcy is dismissed three to five years later where with Chapter 7 you can restart building credit and saving money.

Finally, Did the Bankruptcy Reform Bill Pass. If not are Bankruptcy Judges, Trusties and Lawyers "defacto" having the bill enforce where it is hard to do Chapter 7 and they want everyone to first do Chapter 13? Any answers would greatly help.


Sincerely yours HybenAmon

[robivi3]

It depends on your State. You need to confer with another Attorney (second opinion can't hurt) also. Your going to take a hit creditwise. It's better to go Chapter 7 and get it over. In some States (I am in Ft. lauderdale, Florida) you are able to retain all of your home. We paid 86,000.00 for our townhome and they are currently going at about 175,000 - 190,000 but it was untouchable in Chapter 7.

[robivi3]

As to the "defacto" question. Yes, to some extent they are getting stricter because of pressure and because the BK Bill has not passed. My Attorney says that that is why I went through such a nightmare.

[Oliver]

It would appear to me that Ch-7 should be a viable option for you. I'm not certain if this would depend on which judge you eventually appear before - it would seem like the law should be clear cut however, and not by the willfulness of the judge at hand. I too am concerned with the recent changes in the BK law and not sure how it might ultimately affect any potential case I will file.

[edwards2]

Only a small minority of us on this forum elected to go Chapter 13. It certainly would not be my option of choice. If we had to go Chapter 13 it would not ruin us but it would create an extreme hardship on us. We simply do not have disposable income either for daily living much less emergencies. I would definitely consult another attorney. I am sure we would have had our attorney told us what yours told you. In fact, our attorney did say he was worried the trustee might recommend we go Chapter 13 because of an expense we claimed which was over and above the normal monthly expenses. At our 341 we justified(I think) why that expense was necessary. Our attorney did tell us the trustee did not seem to have a problem with it; we were pleasantly surprised as was our attorney. We still have a ways to go but we are 27 days since our 341. No creditors showed up at our 341 either. Whatever you do, don't delay. October will be here before you know it.