Am I missing something?

[newlife13]

I'm going to sign my paperwork to file for Chap 13 next week. Based on my income and expenses, my attorney says my payment will be about $181/month. I owe $63K in unsecured credit card debt. How can this be? For the first time in *years*, I feel like I can sleep at night, just *knowing* how small my payment will likely be.

I was working with a debt settlement company and realized I could not even afford to pay them the money that was being held in escrow for settlements. Since I hadn't received any offers or settled, they refunded all of my money (less $22 for account set-up fees) which I used to pay my one-month past due utilities, my pre-filing attorney fees and my rent. I haven't been current with my rent and all my utilities at the same time in over two years!

So, I know everyone says how hard Chap 13 is and that most don't finish/succeed. Am I crazy to think this is going to be relatively easy if I spend wisely and adopt a simple, frugal lifestyle? My minimum payments to credit cards were >$1200/mo, prior to June when I stopped paying three of them. My monthly payment to the debt settlement company from June to November was $795/mo. Neither were remotely manageable and I burned through all my savings, and thus, continued to accumulate debt on the other cards that are in good standing. $181/month sounds like a breeze...

[justbroke]

I'm going to sign my paperwork to file for Chap 13 net week. Based on my income and expenses, my attorney says my payment will be about $181/month. I owe $63K in unsecured credit card debt. How can this be? For the first time in *years*, I feel like I can sleep at night, just *knowing* how small my payment will likely be.

A Chapter 13 Reorganization Plan, also simply called the Plan, allows you to discharge thousands if not millions of dollars in debt, based on you paying back what you can afford. Any unsecured debt, those credit cards, are subject to discharge if you complete your Chapter 13 successfully. You will pay a token amount -- which appears to be $181/month -- based on what "extra" income you have after your bills are paid (also know as the disposable monthly income or DMI).

I was working with a debt settlement company and realized I could not even afford to pay them the money that was being held in escrow for settlements. Since I hadn't received any offers or settled, they refunded all of my money (less $22 for account set-up fees) which I used to pay my one-month past due utilities, my pre-filing attorney fees and my rent. I haven't been current with my rent and all my utilities at the same time in over two years!

You have found what most people find with debt management and debt settlement companies. Approximately 90% of those plans don't work and you would likely end up filing for bankruptcy... after wasting your time and money.

So, I know everyone says how hard Chap 13 is and that most don't finish/succeed. Am I crazy to think this is going to be relatively easy if I spend wisely and adopt a simple, frugal lifestyle? My minimum payments to credit cards were >$1200/mo, prior to June when I stopped paying three of them. My monthly payment to the debt settlement company from June to November was $795/mo. Neither were remotely manageable and I burned through all my savings, and thus, continued to accumulate debt on the other cards that are in good standing. $181/month sounds like a breeze...

Chapter 13s work if you and your attorney are reasonable and resist undue pressure, from the Trustee, to do (more) belt tightening. Never tighten on your food budget, ever!

[newlife13]

Chapter 13s work if you and your attorney are reasonable and resist undue pressure, from the Trustee, to do (more) belt tightening. Never tighten on your food budget, ever!

Yes, my attorney said that the trustee is going to balk at my food budget because I have only one dependent (for tax purposes), but in fact, have to feed two teenage boys who I share custody of with their father. He said I have to stand my ground on the food because that is my biggest expense, other than rent. I'm in a funny spot because I have to maintain a household of three, but due to the IRS rules and my separation agreement, I only claim one of them on my taxes.

[justbroke]

Stand your ground! I like your attorney!!!

[newlife13]

Is it weird that I'm so excited to file? I feel like I'm truly getting a second chance!

[justbroke]

If you feel really excited about filing now, just wait until the day you actually file. I couldn't keep from smiling. People on the street saw a confident and happy person strutting along the sidewalk like they just won the lottery. I technically did just win the lottery. I discharged over $1,000,000 in debt.

[Chrysalis]

If you feel really excited about filing now, just wait until the day you actually file. I couldn't keep from smiling. People on the street saw a confident and happy person strutting along the sidewalk like they just won the lottery. I technically did just win the lottery. I discharged over $1,000,000 in debt.

Is there an extra zero in there? o_o

[justbroke]

Is there an extra zero in there? o_o

No. I had two investment properties and near $200k in unsecured credit. It's actually higher than that. There are others,that have discharged over $2,000,000 of debt.