Is Chapter 13 too Invasive?

[meinnc]

Hello,

Thanks to all for being here and offering support. This is my first post.....

I am considering bankruptcy in my name only, although I'm married. I have done free consults with two lawyers and waiting on appointments with two more for more free consult. I would like some real world opinions from you all on my situation if possible.

We live in NC. My husband and I have two children. I have $35,000 debt in my name only, mainly credit cards and a few medical bills.

Together, we own a home (tax value $162,000- and we owe $117,000- plus a $25,000 line of credit that we want to refinance) and an almost paid off minivan together. I own a paid off older model vehicle. This is pretty much all we have in assets.

Hubby's income is $35,000 a year, about equal to my credit card debt. I bring in about $10,000 a year doing side jobs and selling on EBAY. We pass the NC means test with ease, I believe, as the NC means income for family of four is $70,000 and our income is about $45,000.

I want to be done with the credit card debt. Sounds like Chapter 7 would be the way to go if we can reaffirm our house and van payment.

From what I have read here, Chapter 13 sounds very invasive. I sell on EBAY and feel that my income could increase in the next year or two and I am afraid they would confiscate my money if I get on a Chapter 13 payment plan and start earning more money.

We need to do something because as of right now, we are short each month about $1000. Without credit card payments, though (which we are paying minimums), we would be fine. That is why we need the bankruptcy.

Any thoughts on this situation? Thank you very much in advance!

[justbroke]

Chapter 13 is a Reorganization Plan, and not a traditional liquidation. It allows you to keep creditors at bay while you re-organize your finances and stabilize yourself. I wouldn't call that invasive!

While your income is subject to annual review... to determine how much you can contribute towards unsecured debt that will be discharged... it's only fair in that you have the full equitable power of the U.S. Bankruptcy Court keeping your creditors away from you.

As for Chapter 7... if you qualify for it, and can keep your home (are current on your payments), then it's quicker... but could be more painful and immediate hit. (The pain is if you have a lot of non-exempt assets that the Trustee will want to liquidate. They won't be taking the shirt off your back, but it may seem like that.)

[krielly]

I can only speak for my own personal situation, but 13 has not been terrible for us. Not pleasant, but bearable nonetheless.

We are 41 mos into a 60 mos 13. In a lot of ways I am greatful for this opportunity to learn to live within my means. I'm not so sure if we had filed a 7, if I would have truly learned as much about financial restraint as I have. It would have been over and done with so much quicker.

Being in a 13 for over 3 years now has given me no other recourse. For me an my dh, I think it's actually been a good thing, and a well learned lesson. I feel fortunate, in some ways, to have learned this well before the economy went south. Seems like we are a bit ahead of the game in that department.

Again, this is just me, and my own experience.


K

[BigJohn]

13 hasn't been invasive to us. I gave photos of everything we have, records for about one year, etc. Actually I think I gave them too much, but then, they can't say I was hiding something.