Why did you file Chap7/Chap13?

[Lesa13]

Just curious as to how people came to their decisions on which to file. Or if you were "told" by your attorney or someone else what you should file.

[Lesa13]

I guess I just wanted to know why it seems so many picked 7 over 13, not necessarily reasons for filing BK per se...
thanks though

[edwards2]

Simply put because Chapter 7 totally erases all of your debts and you have to make payments in a Chapter 13. In our case we did not have disposable income to pay our debts even if it was pennies on the dollar. Your attorney will advise you as to which Chapter you will be eligible to file.

[keepmine]

Lesa, at the end of the day we all act like good capitalist and we act in what we perceive to be our own best interest. A chapter 7 is total and complete destruction of all unsecured creditors and is usually done in 90 to 120 days. Neat clean and economically efficient as opposed to dragging it out over 36 to 60 months in a 13.
If you qualify for a 7, go for it.

[Titan]

I filed because I was in a relationship in which my girlfriend/soon to be fiance was helping support me financially and then ended the relationship, leaving me holding a mountain of debt which I accumulated throughtout the relationship.

It was part my fault as well, I don't pretend to be a complete victim. I tried very hard the past year to make the minimum payments while I relocated and acquired a new job. The snowball finally got too big, and I had to file in order to be able to live.

I did a 13 because my car has too much value on it to be exempt. I own it outright, but the car's value is over $10,000. It would cost me more in the long run to sell the car, buy a used beater, and then have to pay constant repairs on a vehicle that would suffer breakdowns.

[StaciMM]

There are advantages to 13's, but it all depends on your situation. For someone who is behind on their house and cars, can make normal payments but are having trouble getting caught up because the creditors want it all now, ch 13 puts the past due amount (and perhaps a portion of unsecured debt) into a repayment plan - and you don't lose the house/cars.

If someone has some disposable income, but not enough to pay the creditors as they want, a partial repayment thru a ch. 13 allows you to be done with the debts after 5 years. Rather than struggling to make minimum payments for a lifetime.

[copper2]

For what it is worth, I chose to file Chapter 7 after doing a ton of reading and observing what I saw around me. Bankruptcy is bankruptcy, really, though one does look slightly less terrible than the other. I had no assests to protect (big point) and nothing to lose after my exemptions. A 13 would have been a "moral" choice for me and that is a big thing to consider. However, I was seeing my work outsourcing to India on a regular basis, the collapse of my employer, my creditors defaulting my interest rates because they could, the deregulation of credit card interest rates in Washington, The War and the obscene national deficit which I knew MUST be addressed at some point, and lastly people in my extended family making more money than ever off their investments in the stock market. It was clear to me I was on the wrong side of this "playing field" and needed to change. When I began to imagine myself as "company" and not an individual, there was a clear business decision for me. I have paid interest to creditors for 20 years. Realistically, I reason that some of what was written off has already been paid for over the last two decades. I filed Chapter 7 and am changing how I live and what I antcipiate in the future. Good luck you and your decision!

[StaciMM]

Most people don't have the option of choosing between 7 and 13. Either you can afford a 13 payment, or you can't. For us, we were doing good on covering our monthly living expenses, but couldn't afford anything to pay old debts. When one of those started garnishing DH's paycheck, the house of cards fell.

Of course, some people may have room in their budget to cut out some things-in order to be able to make a ch. 13 payment. Alot of people here (from what I recall of different situations) had cut those things out before reaching the decision to file.

[Busted42]

My divorce killed me....and 1 creditor is trying to make sure that I don't 'come back to life'.

[jane taylor]

We make "too much money" and don't qualify for medical hardship to qualify for Chapter 7. Also, we want to keep our home and vehicle. We have cut back significantly over the past year. It is really hard with two teenagers. I know they don't need all the latest gadgets or designer clothes, but it would be nice to be able to afford a used vehicle for my son to get to and from work. The flip side is that now we are actually able to save a little bit of money for emergencies.

[13inOR]

Like most, we didn't have a choice, we had a 13 because we wouldnt have qualified for a 7, and our primary reason for filing in general was not credit card debt, but was medical bills and mortgage arrearages that we could not catch up all at once. We had a good income to pay all our monthly bills but the mortgage company wanted their money immediately or they would foreclose.
It worked great for us, we ended up in a 100% plan for 29 months. We just refinanced to pay off early this week after being in it for 18 months. But it was great to have relief from the morgage lender breathing down our neck.
It gave us time to get our bearings and move on! We did not regret if for a second!

[Minnymouth]

When you file bankruptcy, which kind you are allowed to file is determined by your income, assets, ability to repay, and the descrection of the Courts.

[StaciMM]

I can only think of one situation where you'd have a 'choice' - other than cutting down to bare basic expenses to be able to afford a 13 payment. (And that isn't a good idea, because it would be hard to live that way for years!)

Lets say you have $800 in 2 car payments, and ~3 years left on each vehicle with not-so-great APR's. With those expenses, you have only about $75 remaining each month so not enough for a valid plan. If you included the car payments in the plan, to be paid at 100%, it may be possible for the plan to reduce the interest being paid on the loans & to lengthen the time they take to get paid off. So $875 becomes your plan payment, that pays off the cars, and by reducing the rate & stretching out the # of payments it also allows some money for other creditors (and the trustee). In this scenario, if the vehicle payments were at 15% and the BK reduces to 7%, and lengthens from 36 payments to 60... The plan would pay $456 combined to the car loans, leaving a little more than $400/mo for the trustee fee & other debts.

I could see that being a good thing if someone is behind on their mortgage, has IRS debts, etc. and needs BK protection to be able to get caught up, on secured property.