First post, have some questions

[Nicki8875]

I am very confused about what exactly a Chap 13 BK is?

I have read that I will have to repay $100-$200 per month back for 3-5 years. What determines the amount I pay and and the amount of time?

The only 'secure' debts we have are our house, the van, and the bronco. The house we have some equity in but the van we owe $13,000 and it is worth about $5,000. The bronco is worth about $1000 but is used as collateral for a $16,000 loan.

We have about $25,000 in CC debt.

I guess my questions are how much we will have to pay and how long and also how long this is on our credit? I have read 7 years, but is that from the time we file or from when we make our last payment? Should we purchase a new vehicle for my husband before we file b/c the bronco wont make it 5 years, and do we have to turn over tax refunds each year towards the debt? I thought I read somewhere if we are upside down in a vehicle we only have to repay the fair market value?

Thanks in advance for your help...it is all very confusing.

[optimistic1]

There are lots of complexities in a 13. The notion you will only pay back $100-$200 per month is just simply not true for all cases.

The question to ask yourself is this.

Are you behind on your mortgage?

The van, did you make the loan, refinance or not, within the last 2.5 years.

The 16000 loan is for what?

A 13 is on your credit for 7 years from the date of filing.

Are you below or under the State median income from the USDOJ.GOV website.

When you run the means test on Legalconsumer.com, what is your Disposable income?

In your case its one thing at a time, I understand you have lots of questions, so did I.

[Peevee]

100 to 200 a month would be nice. Mine was $155 a week deducted from my check. It's over and done with now.

[Nicki8875]

There are lots of complexities in a 13. The notion you will only pay back $100-$200 per month is just simply not true for all cases.

The question to ask yourself is this.

Are you behind on your mortgage?

The van, did you make the loan, refinance or not, within the last 2.5 years.

The 16000 loan is for what?

A 13 is on your credit for 7 years from the date of filing.

Are you below or under the State median income from the USDOJ.GOV website.

When you run the means test on Legalconsumer.com, what is your Disposable income?

In your case its one thing at a time, I understand you have lots of questions, so did I.

No we are not behind on our mortgage. That is our first priority and is only $450/ month.

We have had the van loan since November 2006- so over 3 years.

No we are not below the state median. Between the two of us we make about $75,000 per year.

The $16,000 was just a consolidation loan and we had to provide *something* as collateral and they accepted the title to the bronco which I guess is valued at more then $1000- but only about $1800.

What is disposable income? Income after we pay bills? Thanks for your help! Everything I read is confusing and conflicting. Especially b/c I am reading that only secured loans need to be repaid, but only that $16000 is secured.

[optimistic1]

Ok, so based on what you stated here is my beginner synopsis.


You wont pay arrears on the mortgage because you are current.

The van loan can be "crammed down" to the current KBB fair market private party value, the remainder will be considered unsecured debt.

If the only thing that they used is a bronco worth $1000, I would just give it to them and stop paying on the loan. Go out and buy a new car to replace it.

Your disposable income can be calculated with the means test, as well as determining what is left over after your pay all of your necessary living expenses not exceed either the trustee standards or IRS standards, it varies based on districts, based on my personal experience.

Whatever is left over, is your monthly payment.

The first people that get the money from your plan, is your attorney, the trustee, then secured creditors, then priority secured claims, then unsecured debt.

You might be in a district that requires that unsecured creditors receive atleast 10% of what you owe.

Secured loans are NOT the only thing that needs to be paid.

Based on that you are over the State median income, your plan will be a 60 month plan, no less, unless something changes over the time you are on the plan, and somehow it can be less, but Im not sure on that.

[Nicki8875]

Umm, I must be doing something wrong on that test b/c it says my disposable income is -$15. I make $1691.00 per month and my husband makes $3569. We have a family of5 (us and 3 kids). Our house payment is $450, van payment is $480 and $16000 bronco payment is $290. I dont know if I entered that info wrong or the other info wrong?

[optimistic1]

The $16000 payment for the bronco, this is a consolidation loan for what? Credit cards? In that case, you wouldn't neccessarily use that into the calculation, but I could be wrong. If based on those numbers you came up with, you have negative disposable income, that just means that your unsecured creditors might just be getting nothing at all, and then your plan payment is basically the crammed down auto loan, the trustee fees, the attorney fees, and thats it. I cant be sure about the whole consolidation loan. Thats why I said, just let them have it, why would you continue to pay on a $16000 loan, where the only thing it is secured by is a van worth only $1000.

[catleg]

You should consider what would happen if you ditched your current vehicles and got two "new" used cars on credit (assuming you can)
Usually the ownership expense is allowed for chapter 7, might help you qualify
Even if it doesn't it means your chapter 13 payment plan will go towards the cars and not towards the unsecured debt.
Standard playbook for a chapter 13 is to upgrade your vehicles with secured financing before you file.
You also want to pay your taxes "just right" and not get refunds, if you are getting a refund this year, be sure to spend it before you file.
A 7 really might be better for you ..if you are close to the median income maybe you could take a few weeks of unpaid leave and engineer things so for a 6 month window you get your income low enough to qualify for a 7?

[outsidetool]

Get a good lawyer who's not afraid to really work the numbers. If there's any way you can file a Ch 7, then life is MUCH better not having to bow at the trough and whim of the Trustee and court for a 60 month payment plan. I can't say for sure based on your info that a 7 would fly for you--but I'd highly urge that you closely look at the possibility before committing to a 13. I was told originally by EIGHT different lawyers that I could only file a 13; then heard about one that wasn't afraid to take on a real case--he actually urged me to file a 7. And it worked, despite a few tense moments.

[Nicki8875]

Dh and I have already filed a 7 that was discharged in January 2003 so we cant file a 7 again and have to do a 13. At the time we did the 7 it was b/c of a house issue. Then we got back on track and were doing great and his hours got cut which cut out over $1000 a month of our income and now it has become a struggle to maintain our bills. That is why a 13 is so confusing to me...the 7 was easy but we really just had the house then. If we start with a 13 can we file a 7 in 2 yrs?

[Nicki8875]

The $16000 payment for the bronco, this is a consolidation loan for what? Credit cards? In that case, you wouldn't neccessarily use that into the calculation, but I could be wrong. If based on those numbers you came up with, you have negative disposable income, that just means that your unsecured creditors might just be getting nothing at all, and then your plan payment is basically the crammed down auto loan, the trustee fees, the attorney fees, and thats it. I cant be sure about the whole consolidation loan. Thats why I said, just let them have it, why would you continue to pay on a $16000 loan, where the only thing it is secured by is a van worth only $1000.

Dh is having a fit and does not want to turn the bronco over b/c he is afraid the place will put it out front for sale and everyone will know he did not pay for it. He is very worried someone will find out. I do not really care if people know b/c our lives took a turn we could not predict happening and we need to do what we need to do to provide for our family.

[optimistic1]

I think there are more important things to worry about than a stupid car, honestly. I seriously doubt that they would "put it out front" and sell it. You want a fresh start, or a re-organization plan, correct? You want to possibly rid yourself of the 25,000 of credit card debt right?? Well then, the bronco is like the least of your worries.

I proudly tell people I am filing for bankruptcy "protection"

Yes, I too can be like major corporations that have hard times, and utilize my rights as a consumer.

This is my bailout.

I am not the least ashamed, and neither should your DH.

[Flamingo]

Dh is having a fit and does not want to turn the bronco over b/c he is afraid the place will put it out front for sale and everyone will know he did not pay for it. He is very worried someone will find out. I do not really care if people know b/c our lives took a turn we could not predict happening and we need to do what we need to do to provide for our family.

Ah, filing BK is tough...Emotions run high prior to filing and the thought of a Chapter 13 can be daunting. You do what you gotta do to take care of yourselves and your family. Tell hubby he will eventually get over what other people think because most of those people he is worried about are deep in debt themselves. When the job loss comes, the debt is high and there is no money to pay the debt along with food/essentials, you are up against the wall. It's a hard pill to swallow and a hard lesson learned as to what debt can do. Learn from this because you are going to have two BKs on your credit reports which is going to make it tremendously hard for you in the years to come until that 7 comes off in 2013. The Chapter 13 will stay on for 7 years after the date you file. Right now material things are the least of your worries. Get yourselves together financially and over the coming years learn to change your lifestyle and habits that are putting you in debt or you will be filing a third BK in several years and never get out of the cycle. Best of luck to you!

[Nicki8875]

What are all these exemptions people are talking about? Is that equity in your house, or vehicles you own? Do they count household items? Can we list future tax refunds in our exemptions?

[Nicki8875]

Ah, filing BK is tough...Emotions run high prior to filing and the thought of a Chapter 13 can be daunting. You do what you gotta do to take care of yourselves and your family. Tell hubby he will eventually get over what other people think because most of those people he is worried about are deep in debt themselves. When the job loss comes, the debt is high and there is no money to pay the debt along with food/essentials, you are up against the wall. It's a hard pill to swallow and a hard lesson learned as to what debt can do. Learn from this because you are going to have two BKs on your credit reports which is going to make it tremendously hard for you in the years to come until that 7 comes off in 2013. The Chapter 13 will stay on for 7 years after the date you file. Right now material things are the least of your worries. Get yourselves together financially and over the coming years learn to change your lifestyle and habits that are putting you in debt or you will be filing a third BK in several years and never get out of the cycle. Best of luck to you!

Yes, the friends he is worrying about caring are the type that write bad checks and cant pay their bills but look down on people that file BK. I'd be more embarrassed to be writing bad checks all over town but that is just me. BK is really something no one even needs to know about unless we tell them.

I didn't think we could even try to get any credit during the 5 years we are in 13? So that would push us past when the 7 rolls off our credit.