I'M SCARED. My lawyer just told me I have to file a Chp13...

[Justme79]

I'm in the process of filing... I wanted to file a chapter 7, but my lawyer is saying because of various reason, I'll have to file a chapter 13. All of my research has been about chapter 7's, I'm lost, I'm nervous, and scared. I have a few questions for those who have or are in the middle of chapter 13
Will my late payments continue to add up? Meaning every month I'm hit with late payments because I haven't been paying. Will this stop once I file? My score has gone from 740's to the low 500's since I have noticed all my creditors that I'll be filing, as well as me stop paying.
How often do I have to check in with the trustee? I feel like it's going to be like parole... I'm so depressed.
When I get raises I have to report them to increase my monthly fee to the creditors, correct? Am I able to get any credit? Secured? It's been so hard not having a credit card for some life situations, renting a car and etc. or am I on a cash basis for the next 5 yrs?
I'm scared.

[Justme79]

Congratulations. I'm in the process of filing... I wanted to file a chapter 7, but my lawyer is saying because of various reason, I'll have to file a chapter 13. All of my research has been about chapter 7's, I'm lost, I'm nervous, and scared. I have a few questions for those who have or are in the middle of chapter 13

Will my late payments continue to add up? Meaning every month I'm hit with late payments because I haven't been paying. Will this stop once I file? My score has gone from 740's to the low 500's since I have noticed all my creditors that I'll be filing, as well as me stop paying.

How often do I have to check in with the trustee? I feel like it's going to be like parole... I'm so depressed.

When I get raises I have to report them to increase my monthly fee to the creditors, correct? Am I able to get any credit? Secured? It's been so hard not having a credit card for some life situations, renting a car and etc. or am I on a cash basis for the next 5 yrs?

I'm scared. I wanted this to all be over...

Thanks for your reply

[justbroke]

I'm in the process of filing... I wanted to file a chapter 7, but my lawyer is saying because of various reason, I'll have to file a chapter 13. All of my research has been about chapter 7's, I'm lost, I'm nervous, and scared. I have a few questions for those who have or are in the middle of chapter 13

The typical reason for filing a Chapter 13, after one wanted to file Chapter 7, is that you have too much disposable monthly income (DMI) after the Means Test. If you're borderline you may want to shop attorneys. Some will be a little more aggressive to getting the Chapter 7 discharge while others don't want the challenge.

Will my late payments continue to add up? Meaning every month I'm hit with late payments because I haven't been paying. Will this stop once I file? My score has gone from 740's to the low 500's since I have noticed all my creditors that I'll be filing, as well as me stop paying.

Once you file, all reporting stops. The accounts will be marked as "Included in Bankruptcy" (IIB) or "Wage Earner Plan" (or some similar language). The payment history will be erased too. But they will be deragatory accounts. The fact that you told the creditors didn't affect your score. Late payments and chargeoffs are what cause the drop; multiple payments are chargeoffs are even worse. Going over 90 days past due is the death knell.

How often do I have to check in with the trustee? I feel like it's going to be like parole... I'm so depressed.
When I get raises I have to report them to increase my monthly fee to the creditors, correct? Am I able to get any credit? Secured? It's been so hard not having a credit card for some life situations, renting a car and etc. or am I on a cash basis for the next 5 yrs?
I'm scared.

You never check in with the Trustee once you are confirmed. In fact, you never want ot hear form the Trustee as that's usually a sign that you may have not paid or didn't do something that you were instructed to do (e.g. send a copy of tax returns each year, or turnover a refund). The Trustee will usually send a letter once a year with an accounting of what you paid to date.

You can not obtain credit in most jurisdictions. They do not want you back into the same financial trouble. In fact, most creditors won't issue credit during an active bankruptcy. You may be able to obtain a secured card by seeking permission. In some districts, you may be allowed to incur upwards of $5,000 of debt without permission (but that's rare).

[shipo]

Justme79, wow, lots to cover; I can probably answer some of your question:

• Will your late payments continue to add up? If I recall correctly, until you file and until a stay is grated, yes, they will continue to add up. That said, given you are filing, any additional interest and penalties are utterly and completely irrelevant. Why? Once you file, your attorney will present a plan to the Trustee for a monthly payment of a given amount. Assuming your payment covers all of your secured and priority debt (mortgage, car, tax, student loans...), then the remaining money you pay will be apportioned across the board of unsecured creditors. Said another way, if you have two unsecured debts, one for $1,000, and a second for $2,000, and all of your secured and priority debt leaves only $30 per month extra, then $10 goes to the company you owe $1,000 to, and $20 goes to the company you owe $2,000 to. At the end of 60 months, the former will have been paid $600 and the latter will have been paid $1,200, and both debts will be closed with $0 remaining.
• I believe the consensus among the collective here is you should not inform your creditors you are filing, just file.
• In the 60 months of my Chapter 13, I never once contacted the Trustee. That said, I did have a few questions which I posed to my attorney who in turn, posed them to the Trustee on an as needed basis.
• During the 60 months of my Chapter 13 I got six raises and six bonuses; the trustee never bothered me about increasing my monthly payment.
• Yes, it is kinda-sorta like being on parole. Basically, you keep paying your monthly, you hand over your annual tax return statement and any money above a predetermined threshold (it varies by locality), and you'll come through it perfectly well.
• Will you be able to get credit during your Chapter 13? No, sort of. You will not be allowed to incur any additional credit without court approval. That said, if your car croaks and you need a new one, you can petition the court to allow you to buy a car.
• Yes, you can get a secured credit card as that isn't really "credit".
• Regarding going a long time with no credit cards, yup, I hear you. The last time I had a credit card was during the summer of 2013; it does make things hard to navigate sometimes.
• Regarding being on a cash basis, yeah, pretty much.
• Regarding being scared, yup, I understand that as well. Get with your attorney, get the filing worked out, file it, tighten your belt, and ride out the next five years.

[justbroke]

(I moved the posts to the duplicate thread. Please remember to open a new thread when you have new questions.)

[Justme79]

justbroke - Thank you for your response. You have cleared up a lot of my concerns. As far as my income goes, I do have to contact the trustee when I receive raises, correct? & my taxes are taken every year?

[shipo]

justbroke - Thank you for your response. You have cleared up a lot of my concerns. As far as my income goes, I do have to contact the trustee when I receive raises, correct? & my taxes are taken every year?

I pretty much answered those questions above.

[Justme79]

shipo - Thank you so much for taking the time to reply. I'm scared. So scared. You and justbroke have been heaven sent.

Again, THANK YOU

[sophieanne]

Justme79 - Don't be scared...most of us are nervous before we file. Once you file and collection calls stop you'll know you're on the road to financial recovery.I know it's hard, but take a deep breath and let the process start...before you know it, you'll be done. Good luck!

[Carmella]

In our chapter 13 my husband and I are both allowed $500 in credit each. We have not applied for any cards, though I have thought about it. We get offers in the mail.

I was able to get a new cell phone from my current carrier without a problem. The attorney said something like it wasn't considered debt because it's a payment plan (don't quote me on that exact wording, all I know is they didn't consider it debt). I also applied for something like "After pay" it is a payment plan for shoes I bought for my daughter as a present. I had 3 payments automatically deducted every week, it was approved no problem.

[Justme79]

Good afternoon,

I'm meeting with my lawyer this week regarding going from chapter 7 to a 13. I've been dealing with his assistant and I asked for a meeting with him directly as he assured me I'd be able to file a chapter 7, now his assistant is saying I'm $12,000 over in assets so I have to file a chapter 13.

What are some questions that I should ask him regarding chapter 13? What are questions you wish you knew before you filed and learned after?

Any input will be greatly appreciated. When I meet with him, I want to be prepared.

[justbroke]

Well the first question is, "what do you mean by $12,000 over in assets?" Are they saying that your Chapter 7 Liquidation shows that you have $12,000 in unprotected (non-exempt) assets? Are they saying that you are over-the-median income?

As for Chapter 13, if you're over the median then you'll be in a 5-year Chapter 13; otherwise a 3-year Chapter 13.

As for what questions to ask... any question that you like. Ask them what it will be like. What has it been like for other of their clients. Is it difficult. Try to get a personal sense of your attorney and what you can personally expect.

What did I wish that I new before filing? That I shouldn't have tried to protect my investment properties!

[shipo]

Justme79, in addition to what justbroke said, ask your attorney about whether you should buy a new car prior to entering Chapter 13; take it from me, you do NOT want to go into a 5-year bankruptcy with an older car.

[Justme79]

Good Morning,


"Again, we still have issues with the life insurance policy (the cash surrender value is still over $1k) and personal injury lawsuits. Plus, we cannot guarantee that the trustee will not want the money."

The above is from the legal assistant.


Yes, they are saying I have $12,000 in unprotected assets (I told the assistant they could have them, I don't care) she also said my cash value on my life insurance policy is more than $1,000... It's $1,200

I have (2) pending lawsuits for (2) car accidents, I told her I would cancel them or whatever I get, I'll sign over, hell, It's not guaranteed that I'll get anything. I was involved in (2) car accidents in less than a month, neither my fault, South Florida living... my BMW X6 is totaled. I will cancel the lawsuits, I just want my back to heal..



THANK YOU justbroke and shipo

I will update you after my meeting with the lawyer

[Justme79]

Ps. I past the means test, I'm about $3,000 - $4,000 under (Miami, Florida)