Just starting the process...

[fedupw/ccdebt]

I am beginning the process of investigating a chapter 13 as we have huge amount of cc debt due to medical issues ($130,000)...have been looking at various websites for info (like this one), attorneys, etc... I have done one of the means tests that is available online and am not sure if I understand how it exactly works. I know that there are exemptions - allowances for different areas, such as mortgage, etc... but am wondering how that exactly works. For instance, if the allowance for the house is $1200 but my mortgage is $815, then I assume that I do not get to "keep the difference".

Also, with a chapter 13 and the 5 year plan, if all of the creditors do make claims is it necessary to pay back all of the amount or just what is able to be paid with my disposable income?

I have tried to work with our creditors to lower interest rates, payments, etc but to no avail...it is almost mind boggling how they raise the interest rates and expect people to actually be able to keep up with things. Had never been late, ever, until January 2005 and was late one month and presto... it all went to hell! Discover's min. payment is $296 a month, with $281 of that interest!!! Chase is charging almost $900 a month in interest. I could comfortably make a monthly payment of around $1100 a month but wonder if that would even be enough for these blood suckers thru a chapter 13.

I am literally at my wits end on this... It is amazing how quickly things can go downhill with your life, and how it affects others close to you. i am hopeful that a 46 year old man can make a fresh start of it with this but am beginning to wonder if that will ever happen.

Any advice or words of wisdom would be greatly appreciated...

[Granny]

Hi Fedup, welcome to the forum. There are many wise people here who will be able to answer your questions better than I can, but with it being a holiday weekend, they may all be out. So hang in there, and I'm sure they'll be back in soon.

One of the first questions they will ask you is what state are you in?

I can answer the house question. Your housing costs consist of much more than just the mortgage payment. There are maintenance and repair costs, taxes and insurance if that is not included in your mortgage payments, HOA dues if applicable and of course utilities.

In case you haven't been there yet, check out this link for the means test. It seems to be a good one that is recommended often here.

http://www.legalconsumer.com/bankruptcy/bankruptcy-means-test.php

No, you don't necessarily pay 100% of all the claims that are filed. Your payment plan is determined from Sch's I & J and that's what the creditors get. Now, this can change depending on the amount of your secured debt that you are keeping. In my case, I have a lot of secured debt and my unsecured creditors (CC's) get NADA.

Take it from me, your age is not a big deal here. We have several people in your age bracket, myself included and there are many younger and I'm sure some older. We come from all walks of life, all came here because of different reasons.

The wise ones will also tell you to interview several attorney's. Don't go with the first one you talk to. You are sure to get different answers from all of them because a lot of this is just an educated guess on the part of the attorney. Most have free initial consultations, so take advantage of that and see several before you settle on one.

Good luck and check back after the holiday.

Granny

[CATCHMEIFYOUCAN]

Word to the wise, claim as much you can claim, any "disposable income," they see you have is money to the creditors. For example, my apartment rent was only $625 a month although the my states standards (Northern Virginia) allowed up to $1500. I had a good chunk of disposable income because my rent was small and my lifestyle was and still is frugal!

Best of Luck, CMIYC

[fedupw/ccdebt]

Thanks for the replies...this has been weighing heavily on mind all weekend (imagine that!). I live in Indiana, so am trying to find out about the exact nature of dealing with BK here. Re: my question on exemptions, so if I understand correctly, if my mortgage is $815 but for my size family I can have a housing exemption of $1,200 (in my county) I can claim that entire amount? I assume that I would be able to assume normal housing maintenance and repairs in that amount also...

Also, two of our cc's are with BOA, which also has our mortgage. Will this be an issue when dealing with a chapter 13? We have never been late on our mortgage in 17 years and are current?

I am just so furious with all this, at myself, at the cc companies, at the world... I am sure that everyone has said the same thing. It boggles my mind that the cc companies raise their interest rates so high to make it impossible for people to pay even the minimum...and then they are surprised and ticked that that happens. I have always prided myself on paying my bills, and on time...but this has gotten beyond my control.

[DeadManCrawling]

It boggles my mind that the cc companies raise their interest rates so high to make it impossible for people to pay even the minimum...and then they are surprised and ticked that that happens. I have always prided myself on paying my bills, and on time...but this has gotten beyond my control.

We were late on ONE card by ONE day last summer. The next month that card's rate jumped from 12% to 32%.

The FOLLOWING month, all seven cards we used jumped to 32%. If not for this, we would STILL be paying minimums, and probably would until we died or were finally forced into bk. I actually regard this bit of foolishness from the card companies as a "gift" of sorts.

Had they not forced our hand and dramatically demonstrated for us that we were in WAY over our heads, they might have continued to fleece us for decades.

After we decided to file, back in April, I added up interest fees versus purchases. I discovered we had paid around 160k in interest. Our purchases totalled 55k or so. I was astonished.

The card companies are NOT upset. In fact, they are likely delighted. I have posted about this numerous times, and can show you why they would be thrilled that you are in this place.

I have read public financial statements from the major debt providers, Chase, MBNA, BoA, Advanta, etc. The most profitable sector of their business is people just like you and I. When we are close to the edge, they make a tremendous profit-through the increased interest rates.

And through your desire to "stay current", to "avoid shame" to "preserve a credit score". These are the tools they will use to extend their profits for as long as possible. Statistically, they have already predicted that you will be filing bk. If this has been a gradually growing problem, they knew about it months ago, maybe longer. The only unpredictable equation would be sudden illness or death. They even watch for trends in different industries, which can predict your chances of being fired or laid off.

So, what I am really saying is this:

At this stage of the financial spectrum, you are dealing with purveyors of fear. They trade in blood that runs green. They want every last drop from you, at the expense of your family and yourself. They will use any tactic possible to get it because THEY already know that time is short, and you, with your sky high interest rates, will not be a viable target for long.

Though they may SOUND angry or threatening on the phone, recognize the voices for what they are. They are trained to evoke these emotions from you, to scare you into paying what you cannot and should not be paying.

When I began to discover the depth of this treacherous industry, I felt much better and began to recover immediately from the "trauma" of bk.

I wrote of my discoveries and my reaction, all the things that helped me recover, emotionally, on this board, and it might be worth your time to take a look at it as well:

http://www.bankruptcyforum.com/showthread.php?p=89200#post89200

Best wishes to you,

DMC

[fedupw/ccdebt]

I couldn't agree with you more...it is absolutely frustrating how the cc companies make a mint off of people trying to just get by. I am actually hoping that this whole bk process is actually a godsend...that things will actually be better down the road. That is really the "thing" that I continue to hold onto.

Has anyone out there had any "experiences" in Indiana bk to pass along? I am hoping to meet with some lawyers over the next couple of weeks and would love to have some "real life experiences" to lean on...