Venting about Chapter 13

[spearmint]

Why is it when you file Chapter 13, it takes away all your hopes and dreams for the next five years. I SO wanted to start a business of my own again and was in the process of doing so, but now I have to file Chapter 13 to pay back a debt that is not dischargeable.

I don't mind paying it back - and should pay it back - BUT I really object to the courts running my finances for 5 years. It makes it pointless to start a business, earn additional income, etc. because the courts will take it. This is the part about Chapter 13 I object to the most.

How do others feel?

[Flamingo]

You have to look at it this way. The Government gave folks a way out of their debts legally to give those that needed it a fresh start. However, those laws make certain items nondischargeable just as other laws have boundaries and limits. Under Chapter 13, you will be able to pay this bill back in segments instead of not being able to pay it and get hit with all sorts of interest and penalty charges, have a judgment placed against you and your wages eventually garnished or your tax refunds taken away. There is a positive side to most things in bankruptcy. After it is all over, you will see those positive sides when you are able to get your life back into order.

[spearmint]

You have to look at it this way. The Government gave folks a way out of their debts legally to give those that needed it a fresh start. However, those laws make certain items nondischargeable just as other laws have boundaries and limits. Under Chapter 13, you will be able to pay this bill back in segments instead of not being able to pay it and get hit with all sorts of interest and penalty charges, have a judgment placed against you and your wages eventually garnished or your tax refunds taken away. There is a positive side to most things in bankruptcy. After it is all over, you will see those positive sides when you are able to get your life back into order.

I hear you but it still feels like a five-year "sentence". It's not me just to sit and collect my regular paycheck. I like to make moves to get-ahead and I won't be able to.

What is really depressing is I will be 62 when it is discharged - if I get that far! Too late to start a business or do much of anything!

[Flamingo]

This is a life event for you and as in all things in life, you do the best with what is handed to you. Unfortunately, you ran up a lot of debt that under the law you are reponsible for so the best thing to do is bite the bullet, do the best you can and get through the situation and lay down the groundwork for things that you can do when it is all over. Yes it is hard but believe it or not, you do get through it.

[hey72]

I have to agree, you "reep what you sow".

I don't mean to be harsh, I am in the same posistion as far as the "5 year sentence". I understand there are at things like medical bills and layoffs, that we don't really control, but you have to accept these things as your life, and move on in the best, most positive way you can. There is no other way.

[BigJohn]

Why is it when you file Chapter 13, it takes away all your hopes and dreams for the next five years. I SO wanted to start a business of my own again and was in the process of doing so, but now I have to file Chapter 13 to pay back a debt that is not dischargeable.

I don't mind paying it back - and should pay it back - BUT I really object to the courts running my finances for 5 years. It makes it pointless to start a business, earn additional income, etc. because the courts will take it. This is the part about Chapter 13 I object to the most.

How do others feel?

The probability of success with a small business is not in the entrenapeur's favor. Add to that, possible problems managing money in a down sized economy. I would say count your blessing because I think you have several.

[floridian]

they invented chapter 13, because is sounds better than "indentured servant"..

[spearmint]

they invented chapter 13, because is sounds better than "indentured servant"..

That, I can believe!

[lrprn]

Spearmint, we would have loved to be able to file Ch 7 and start over in 3 months so I can understand your frustration feeling trapped for 5 years. If it helps, my husband will be 66 and I'll be 60 when our plan is over. You aren't alone being old and broke

But to be brutally honest, you are in a bed of your own making. Continuing to take unemployment compensation when you were employed is what started this ball rolling. It was a conscious choice on your part. And now it's time to pay the piper.

I hope with time you will be able to feel more gratitude that you have a legal option to get out from under a very heavy financial burden. Five years is a long time to have your finances controlled by your trustee, yes, but it's not the end of the world. Far worse things can and do happen to people all the time. In the long run, this is just a bump in the life road, then you can move on.

Spend the five years building solid business plans for your potential businesses so that when you are discharged, you can really hit the ground running. Good enterpreneurs are ageless!

[HHM]

Plus the idea of being under "control" for five years is an over-statement. In a very real sense, all a chapter 13 is is a debt consolidation program. You round-up all your debts and make one payment. As far as "hopes and dreams", pleeeeeeaaaaassssseee. You are overstating the risk. 95% of trustees could really care less about what you do after your chapter 13 is confirmed. The only meaningful restriction is that you cannot incur new debt (which is a good thing). There is a "risk" that if you make more money during the course of a 13, that that money would go to the chapter 13 plan. But honestly, I have never actually seen it happen.

[spearmint]

Plus the idea of being under "control" for five years is an over-statement. In a very real sense, all a chapter 13 is is a debt consolidation program. You round-up all your debts and make one payment. As far as "hopes and dreams", pleeeeeeaaaaassssseee. You are overstating the risk. 95% of trustees could really care less about what you do after your chapter 13 is confirmed. The only meaningful restriction is that you cannot incur new debt (which is a good thing). There is a "risk" that if you make more money during the course of a 13, that that money would go to the chapter 13 plan. But honestly, I have never actually seen it happen.

The attorney I spoke with said the trustee(s) in this area are dreadful. I do need to ask him specifically what would happen if I earned money doing freelance work, though.

If things will be the way you suggest, then I feel much better about doing it. At the very least, I expect it to bring me some financial stability.

[floridian]

i know i will get harpooned for saying this, but i should have lived a more lavish lifestyle and bought a bigger house.... my lawyer said that if i had a bigger mortgage and more expenses, i wouldnt have too much disposable income and not be 13 bait...

i know i shouldnt criticize the infinate wisdom of trustees, but if you pass the means test, that should be the issue, not DMI...
yeah i know, that if i had an additional 300 bucks a month DMI, i would be out of control and run amok! i might even be able to help my elderly mom in her last years...

i would say that the men who made these laws didnt participate, but i see that numerous members of congress have filed bk and still live it up! my salary is beer money to many!...

yes i know, i brought it upon myself and i shouldnt have listened to the lawyer, that told me it wasnt a problem!





thats the way i feel about it, your opinion may be different..

[HHM]

The attorney I spoke with said the trustee(s) in this area are dreadful. I do need to ask him specifically what would happen if I earned money doing freelance work, though.

If things will be the way you suggest, then I feel much better about doing it. At the very least, I expect it to bring me some financial stability.

Spearmint, you can't have your cake and eat it too. If you can make money, go MAKE MORE MONEY and PAY OFF YOUR DEBT ON YOUR OWN. However, if you cannot pay off your debt on your own even with your "freelance" work, then you need to sleep in the bed you made. I don't know what else to say.

[spearmint]

There's no way i could ever pay it off on my own, not 100%

[HHM]

There's no way i could ever pay it off on my own, not 100%

The basic question when it comes to debt is
Pay it in full, or don't pay it in full.
90% of the time, the decision is made by your circumstances. So, you fall into the "can't pay it full" category.

Ok then, the next question is, what are your options.

1. Consumer Credit Counseling, a decent option if you can afford it, (i.e. able to PAYOFF the debt in 36-60 months if the interest was reduced to about 6%. Most people let their situation deteriorate well beyond the point where CCC could have helped.

2. Debt settlement; typically a waste of time and money. Not a very cost effective option. This is really more for individuals that have equity in assets that can be liquidated to settle debts.

3. Bankruptcy. Ideally, if you qualify, chapter 7. (assuming the bulk of your problem is unsecured debt). However, as many many people are finding out, you can still be POOR yet make a decent amount of money, hence you only qualify for a chapter 13.

4. Chapter 13 BK. You let the chips fall where they may. It is a FALSE Choice to compare a 7 to a 13 because you don't get to choose. Its as silly as asking someone to choose between paying cash for a new Hyundai or a new Mercedes yet they only have $15,000. No matter how much you "want" the Mercedes, you can't get it. No matter how much you may desire a chapter 7, the debtor won't qualify. Thus, the real choice is a chapter 13 vs doing nothing; which one is better for you. 9 times out 10, a chapter 13 is the best option.