Filing Chapter 13

[yomama]

I never thought my husband and I would end up in the mess we're in, but we're to the point where we have to file for bankruptcy. We had a free consultation with a lawyer. Being that they had a tight schedule, we were probably only in for a total of 10 minutes and I don't know much more than I did other than the lawyer said we'd go for Chapter 13 and only file for 7 if 13 didn't work out.

Is it standard procedure to have to list basically everything that you own no matter which one you're filing under?

We have a 20-year old (soon to be 21) daughter living with us who goes to college. Does everything she own have to also be listed? For example, she has a stereo. She also has a laptop computer, but we didn't buy it; my parents did. I didn't know if we had to list those things or not, and we didn't think at the time to ask when we were at the lawyer's office. It's hard to think of things in such a short period of time.

Our daughter has a $750 certificate of deposit, which is basically all of her money that has been given to her as presents over the years. Unfortunately, my husband's name is also on that account. Could she lose it all?

I don't know how much the stuff we own is worth, so my husband has just basically been guessing at what he thinks the stuff would sell for. I hate seeing everything we own on that list...our cars, stove, refrigerator, tv, computer, stereo, camera, life insurance policies, my husband's pension, our meager $150 savings account (pathetic that in 26 years that's all we have!). I could just bawl, this has me so upset. I don't want to lose everything, and of course maybe they would say that we should have thought of that sooner. You know how you wish that things will get better and it turns out they never do. I've been having trouble finding work and my husband lost his job earlier this year and things have been going even more downhill ever since.

Are the courts and creditors so merciless that they wouldn't care if a person has no way to get to work and no way to keep food and cook meals? Do you get to keep everything doing a Chapter 13? How is it determined how much you will pay back to your creditors? Ours is almost all credit card debt, and my husband has about $20,000 in student loans (which I understand you HAVE to pay back the entire amount). We really didn't want to file for bankruptcy last year when we finally faced the fact that we could no longer keep paying on these credit cards, so we signed a contract with a company that has been negotiating for us to try to get our amounts lowered. The problem is that both times they could get us a "deal" we couldn't come up with the money due to my husband being suspended from his job without pay (which his only fault was being naive and trusting people and now has a criminal record because of being setup at the prison he worked at). Anyway...till all is said and done, with the retainer fees and other fees, the company now has more of our money than what we will have, but it's not that I blame them for anything. It just makes me wish that we had filed for bankruptcy last October instead of insisting that we do the "right" thing and pay off our creditors by going through this debt company. Now in the past year our credit cards accumulated approximately another $10,000 in finance charges and late fees. I think it's plain ridiculour what the credit card companies are allowed to charge. They already know that you can't afford your monthly payments and they just keep socking it to you!

Including what my husband owes on his car yet and his student loans and our daughter's student loans, our credit cards, and a loan my husband co-signed on with one of our daughter's friends (yeah, like we could afford to do that!), we are about $100,000 in debt. Pretty much for a person who only makes $9/hr. Is there any set amount that you have to pay back to the credit card companies? I know with just our credit cards we owe a little over $60,000. The lawyer mentioned a 36-month payment plan, but being that it was our first meeting and a fast one, we didn't get into the specifics. Someone once told me that when you go bankrupt, you only pay pennies on the dollar. Is that true?

What really gets me is that the lawyer said that till all is said and done, we'll be looking at paying $4000 to file, for credit counseling, etc. (I don't know what all the fees were that he mentioned. I'd like to know how the heck they think a family can afford that kind of money when they don't have that much on hand??

I'm sure I'll probably think of more questions, and this has already gotten long enough. Thanks in advance for any answers you can give me.

[anonymuse]

Suffering insomnia right now (2 am here) so not going to try to answer the questions; however, one thing struck me right away with this post--the lawyer only spent 10 minutes with you. Go to at least 3 free consultations (mine last from 30 minutes to over an hour)--you need to feel comfortable with your attorney.

Some basic info we need to help you out:

What state do you live in?
What is your income (to determine if it's below the median in your state)?
What is the size of your family?
How much equity do you have in your house?
How much equity do you have in your car(s)?

[yomama]

Sorry, I was going to mention my state but guess I forgot. It's PA.

I'd say that my husband's income is probably $15,000-$20,000. Last year before he lost his job it was about $30,000. He was going to go for his master's degree so we could better our lives, but now with the criminal record he can forget that. Also, we owe so much now, he wouldn't be able to pay back even more school loans. He just got his bachelor's last year, but I guess it was for nothing as far as getting a decent job.

There are 3 of us, him, me, and our daughter.

I don't know how much equity we have in our cars to be honest. My car is a 1993 Mazda Protege, which I can't imagine is worth much now anymore. Of course it's paid off by now. His is a 2005 Pontiac Vibe that he still owes over $9,000 on.

The house we live in is owned by my parents and they don't charge us rent. They told me I'll get it someday anyway, so we might as well live in it right now. It was my grandparents' house when they were living yet.

Sorry I couldn't be more specific about the equity stuff. All I know is that my husband's car cost around $24,000 when he bought it new.

[yomama]

Another thing I am concerned about is our credit report. Can the courts look upon that unfavorably and dismiss a bankruptcy case because of the report? My husband printed our report from Equifax. I had no idea that he had opened so many credit card accounts! I counted over 30 on that report that were opened within the last five years. What he did was keep transferring balances to lower interest cards. It looks like he had quite a juggling act going on! I wish he'd have agreed with me four or five years ago already when I wanted us to quit using credit cards, but he wouldn't. Now this is causing me a lot of distress and I've been majorly depressed because of it. Right now I don't see a hope in our financial future. Neither of us will ever make much money, and I haven't had a job for four months now. My OVR counselor actually recommended that I apply for social security benefits (disability) because of my depression, anxiety, and ADHD. It's hard for me to function on a job, but I really try. If my husband and I would be younger, then I'd probably have some hope, but being that I'm 50 and he'll soon be 54, I can't see us having any money saved up for retirement. We basically have nothing. I guess we'll be eating soup and sandwiches (and even soup is expensive these days, I think). So many things are so high priced compared to a person's wages. I wonder how people manage! Anyway, I hope that if the courts have access to our credit report and see that long list of credit cards (even though most of them are closed except the ones that we owe on...7 of them), they won't say tough luck. I'm worried about all this money we owe too. Just how much are your debts reduced when you file under chapter 13? If we're going to be paying our creditors for 3 years, I can't imagine paying back $100,000, but I guess it wouldn't be that much, right? Oh, how I wish we could turn back time! Believe me, we're done with the credit card thing. We haven't used them ever since last year when we turned the accounts over to that company to negotiate for us.

Btw, this lawyer is the only bankruptcy lawyer in our area. We have our next apopintment with him in two weeks. I think it's then that he wants the $500 retainer fee.

[katze]

How much you will pay back depends on how much disposible income you have after paying your living expenses. We are paying less then half of the $90,000 we owe to credit cards. The court will not look at your credit report. We also have a mutual fund that is in our daughters and our name. Our attorney said that the court wasn't interested in that. We have been in chapter 13 for one year and it is tough but you have to look ahead and think about how great it will be when it is all over. Hang in there things do get better. Spend alot of time reading this forum, there is alot of good information here and alot of smart people.

[dac67]

$4000. that seems way steep. Our lawyer was 2400.00 with the misc. fees.
Credit couseling is only 50.00, so I am wondering how he is coming up with such a high figure.
You will be way better off in this state then plugging along with all the debt over your head , that you won't be able to ever pay off. In 3 years you will be debt free and than can start over, if you didn't file you would never be able to start over.
Best of luck.
My hub and I are only paying back crditors 7%. We don't have student loans. We are on a 3 year plan.

[CATCHMEIFYOUCAN]

Bankruptcy

Is it standard procedure to have to list basically everything that you own no matter which one you're filing under?
List what is reasonable so the Trustee is not suspicious. I am single and live in an efficiency. I don't own expensive things, just the usual stereo, computer, tv (you know what i mean) if you OWN anything (like your cars, even though they are paid off than you must list those)
We have a 20-year old (soon to be 21) daughter living with us who goes to college. Does everything she own have to also be listed? For example, she has a stereo. She also has a laptop computer ..
I would list the stereo, not the labtop (not every "kid," has a labtop - i still dont)
Our daughter has a $750 certificate of deposit, which is basically all of her money that has been given to her as presents over the years. Unfortunately, my husband's name is also on that account. Could she lose it all?
If it is in your husband's name, than you have to list it, If you haven't cashed it out - you might be safe not having to give it up - because im sure there would be tax consequences and the trustee could probably take it!
Are the courts and creditors so merciless that they wouldn't care if a person has no way to get to work and no way to keep food and cook meals? Do you get to keep everything doing a Chapter 13? How is it determined how much you will pay back to your creditors?
Find out what the IRS gives families like yours as far as the cost of living, and try to figure out what you actually pay - get it as close as you can to the standards as possible. They don't ask for receipts, etc. But if you are not realistic and you go over than what the IRS allows, than they might. So play with it (know what i mean)
Trustee is more interested in what you actually can pay back, after you've listed all your assets, cost of living, etc. They are not merciless, only when it comes to your disposable income, so make sure you list all your expenses! Even if it doesn't sound reasonable, let the lawyer decide that, people tend to leave things out - like cost of your daughters books, school fees, lunches (LIST IT), her clothing (you take care of her - you buy her things - she is still part of your expenses - raising a child is costly!)
we are about $100,000 in debt. Pretty much for a person who only makes $9/hr. Is there any set amount that you have to pay back to the credit card companies?
Don't beat yourself up about this. I've been a foolish gambler, so I owe money for a really really really stupid reason. If you fall into a chapter 13 - the trustee is the one that dispurses your amount to the creditors.
And one more note, get out of that debt management program - they are rip off, they probably made more money in their pockets than they did paying back your creditors! I was in one and am glad i got out. Afterall with the new laws they make you sign up for one anyways. It it turned out i wasn't able to pay back anything - so onto the next step - FILING!

Best wishes, Catchmeifyoucan

[CATCHMEIFYOUCAN]

Need more room !

Me again, your post is long and I don't mind giving my input on all this, I'm filing in the State of Virginia by the way, and I'm single, literally no assets, I just own a car - which the the dealer has already acknowledge I'm in Bankruptcy. Some people I hear put their cars included in the repayment plan of BK, I wouldn't simply because if you can pay for it separately (you still have to list it) but make payments (and use it as part of your expenses) than do so, it will reflect on your credit history (thats already damaged) that you are paying back on something.

What really gets me is that the lawyer said that till all is said and done, we'll be looking at paying $4000 to file, for credit counseling, etc. (I don't know what all the fees were that he mentioned. I'd like to know how the heck they think a family can afford that kind of money when they don't have that much on hand??
That does sound pretty steep, my lawyer charged me $3000, however, $1000 of it is going through the chapter which means he gets paid the remaining amount through the trustee (at a minimum rate all the creditors are getting their dough).

I'd say that my husband's income is probably $15,000-$20,000. Last year before he lost his job it was about $30,000.
Sounds to me you would fall below a the given state median for a family of 3 and could possibly shoot for a chapter 7, the only thing is i think you are obligated to pay back govt funds (school loans, taxes etc) but im not a lawyer!

I don't know how much equity we have in our cars to be honest. My car is a 1993 Mazda Protege, which I can't imagine is worth much now anymore. Of course it's paid off by now. His is a 2005 Pontiac Vibe that he still owes over $9,000 on.
You would need to look up the Kelly Blue book for the value of your cars (thats what they did with me when i had one - paid off and everything - than WHAM a month before i filed, my car got flooded! now i had to go out and buy another one! now im stuck with a secured loan - but it is safe from BK)

The house we live in is owned by my parents and they don't charge us rent. They told me I'll get it someday anyway, so we might as well live in it right now. It was my grandparents' house when they were living yet.
Ok, this sounds sneaky - is there anyway you can just say you pay rent? Write them out a check each month, than just have them give you the money back later. Ok, Im suggesting you lie, DONT GET CAUGHT! anything dishonest, your BK can and will be dismissed. Just not having to pay rent is a big LESS EXPENSE you claim on the BK. I pay $600 a month, but the IRS allows me $1600 (had I paid more rent - less disposable income id be giving to the trustee) know what i mean.

Another thing I am concerned about is our credit report. Can the courts look upon that unfavorably and dismiss a bankruptcy case because of the report?
They are more interested in what you owe, who you owe, so make sure you claim everyone - even if you think you've paid them back, you never know who you might have left out. You must list all your creditors, you dont want anyone of the to come back and haunt you!

My husband printed our report from Equifax. I had no idea that he had opened so many credit card accounts! I counted over 30 on that report that were opened within the last five years. What he did was keep transferring balances to lower interest cards. It looks like he had quite a juggling act going on! I wish he'd have agreed with me four or five years ago already when I wanted us to quit using credit cards, but he wouldn't. Now this is causing me a lot of distress and I've been majorly depressed because of it. Right now I don't see a hope in our financial future.
You are not alone, could of, would of, didn't. But BK is a workable thing, you will feel somewhat relieved after all this. Initially it is a very stressful thing, and still is, but bare with it, it it is offered for a reason.

Catchmeifyoucan

[lrprn]

I never thought my husband and I would end up in the mess we're in, but we're to the point where we have to file for bankruptcy. [edit] Thanks in advance for any answers you can give me.

Most of the questions you asked have answers that depend on how your family income vs expenses matches up on the bankruptcy Means Test. Also sounds like you could use an easy-to-understand explanation of Chapter 7 and Chapter 13 bankruptcies. Check out these websites - they explain things in a way that makes what bankruptcy more understandable when you are first getting started:
- http://detroitbankruptcylawyer.com/D...background.htm
- http://www.personal-bankruptcy-chapt...bankruptcy.htm

You aren't alone in your situation, so keep posting questions. We'll help every way we can.

[SinkingFast]

OK,...............

In PA you get to choose which exemptions you use. Federal or State. If you choose Federal, you have to inventory your whole house, daughter's clothing and furniture included. If you choose State, generally using State, you just list your's and Hubby's things and the common use areas of the home.

You'll have to pick which set of exemptions will give you the best coverage. State or Federal. And then work from there. Federal has specific guidelines you have to follow. ONE TV, ONE radio, ONE computer, etc. Generally, if you use State, you don't have to abide by that. Your things are yours and your daughter's things are hers under State.

You do not have to itemize everything you own. 10 pairs of panties. 2 pairs of shoes. One sofa. Although there is one attny here that does that, most of the rest of them just "lump" things together. Most petitions here attnys just say "Miscellaneous Household Goods." There are certain things the BK Law requires be broken out and listed seperate. CD's, collectibles, hobby things like camping/hunting/fishing gear, cameras, that sort of thing.

If I were you, I'd take Hubby to the Bank and get his name off your daughter's CD. Just a CYA to be on the safe side there. Don't want the Trustee to come after that as an asset of yours.

Does daughter live at home or go away to go to college?? One thing you should know is the BK Courts are not allowing parent's expenses for kids in college. Books, tuition, fees, those sorts of expenses. Some BK Courts won't even allow you to count her as a household member if she's going away to college. If the child lives with you while going to college, that's one thing. If they are going away, it's another.

Anon gave you a VERY good suggestion,............... Make some more Consult appointments and chat with a few more attnys. If he/she won't give you more than 10 minutes time in a Consult, I certainly wouldn't want to live with him/her for 3-5 years in a Ch 13. If there's a problem with my Ch 7, will he/she be there to deal with it??!!

[yomama]

How much you will pay back depends on how much disposible income you have after paying your living expenses. We are paying less then half of the $90,000 we owe to credit cards. The court will not look at your credit report. We also have a mutual fund that is in our daughters and our name. Our attorney said that the court wasn't interested in that. We have been in chapter 13 for one year and it is tough but you have to look ahead and think about how great it will be when it is all over. Hang in there things do get better. Spend alot of time reading this forum, there is alot of good information here and alot of smart people.

Well, we probably won't have much disposable income after paying our living expenses because we can barely make ends meet now that my husband lost his job and his present job is much lower paying. We want to file for Chapter 13, but could the courts look at what little amount we have left after paying our living expenses and then say that we have to file under Chapter 7 and so therefore would lose everything, if I understand right, since our assets would have to be liquidated. That's why I don't want to go with Chapter 7 if we can help it if that means they would take everything. If we lose everything, I'll be heartsick. I just feel so bad about all of this if our daughter will end up losing any of her stuff. She didn't make these debts; my husband and I did, and she shouldn't be responsible for our debts. This is a hypothetical question. Does anyone ever store belongings at a family member's house until a certain point in time? Does someone actually come to your house and physically go through it to make sure everything is on the papers that should be? If things are liquidated, do they give you notice when they are coming to take things away from you?

I'm glad that they weren't interested in your daughter's mutual funds. How old was she when you filed for backruptcy though? Since ours is 20 and will be 21 in another month, I'm not sure if her age would influence their decision about her certificate of deposit.

Yes, this will be great when it's all over. Right now I'm going through heck with my anxiety and depression. If only I could turn back time, we'd have done things differently, no vacation once a year and no going out to eat once or twice a week. I guess we just wanted our kids to enjoy vacations like their friends do with their families and wanted to go out to eat as a family, but now we're paying for all of it dearly with our emotions. Who knows what all this is doing to our physical health. I will read here and ask questions. The way I feel right now, I think it's what will get me through this without having a nervous breakdown or something. I really am distraught.

[yomama]

$4000. that seems way steep. Our lawyer was 2400.00 with the misc. fees.
Credit couseling is only 50.00, so I am wondering how he is coming up with such a high figure.
You will be way better off in this state then plugging along with all the debt over your head , that you won't be able to ever pay off. In 3 years you will be debt free and than can start over, if you didn't file you would never be able to start over.
Best of luck.
My hub and I are only paying back crditors 7%. We don't have student loans. We are on a 3 year plan.

Compared to your costs, I agree with you that $4000 is steep. I'm really starting to not like the idea of going back to that lawyer after reading people's responses on here. I think we'll at least get a second opinion and see how much the next lawyer charges. We'll have to go out of our area, but I think driving 50 miles to the lawyer is still going to be a lot cheaper. You said the credit counseling is $50. Is that a one-time thing? Do they do that right at the lawyer's office or is that separate?

It will feel really good to be debt free. I only wish we had done this a year ago before those d@*$ credit cards accumulated another $10,000 in interest and late fees! Yes, I realize it finally that if we didn't file we'd never be able to get out of debt for the rest of our lives and this would always be hanging over our heads and causing us (me especially) a great deal of stress.

Wow, I think 7% is decent! I said to my husband that even if ours is knocked down to half of what it is, I still don't know how we'd pay that amount. I wish I knew what the amount would be set at. Who exactly decides anyway?

[yomama]

Sorry but I'll have to reply to the other posts tomorrow. Thanks to all.

[SinkingFast]

First, calm down. Take a breathe. Relax. You're rushing along like a freight train.

Just because you file a Ch 7 does not mean the Court will sieze and sell a thing. You will have Exemptions to cover your property. So much for your home equity, so much for household goods, so much for vehicles, etc. The values you and your attny set for your posessions determines whether anything will be sold.

You are worrying too much into the future. You need to learn first and cross other bridges as you come to them.

Maybe do one thing tomorrow. Take Hubby to the bank and take his name off Daughter's CD.

Look at your exemptions. This is property you can keep.

Pennsylvania Exemptions:

http://www.bankruptcyinformation.com/PA_exemp.htm

Or, Federal Exemptions:

http://www.bankruptcyinformation.com/exemp-fed.htm

You can choose which ever set of exemptions will work best for you.

Note, the Federal says those can be doubled if you both file a Joint BK Petition. Not sure about the PA exemptions as it does not say they can be doubled.

Exemptions are property or cash money you can keep. The Court cannot take it.

Believe it or not, the average household contents are only worth $3K, maybe $4K tops.

The Homestead Exemption isn't the value of your house. It's for the equity you have in your house. If your house is worth $100K and you owe $90K on the mortgage, you have $10K of equity. $10K is all you'd need in Homestead Exemption to cover and keep your house.

Take your time. Deal with one issue at a time.

[yomama]

Okay, update here....I will still reply to everyone later, but right now I want to tell what transpired today. After reading from you on here that $4000 sounds steep, we called another lawyer further away from us that I found on the Internet and they want the whole amount right away but their total cost if $1250, including the counseling. It's scheduled on the same day as the one we have with the original lawyer. This new one is in the morning and the original one in the afternoon, so we will need $1250 for the one in the morning if we decide to go with him, and we will need a $500 retainer fee if we go to the one in the afternoon.

What I don't like about what this new one told my husband on the phone is that we have to have a household income of $58,000 or more to file for Chapter 13. If we don't have that, we'd have to file for Chapter 7. I really hadn't wanted to file for Chapter 7 because of everything being liquidated. I don't want to lose everything, which is what I understood is what will happen if we file Chapter 7. So now I don't know what we should do. HELP!