Ch13 Before and After Stories

[spearmint]

I'd love to hear some stories of what life was like before you filed Chapte 13 and what it was like after discharge.

Did filing bankruptcy improve your life and credit rating?

[Gerry]

Life years before the BK was great. Good paying job, bills paid on time, helped the kids pay for college, a fair amount going into a 401k, spare cash for a plane ticket to see friends a couple of times a year.

Life just before the BK sucked. No job, a failed business with buckets of unpaid bills, household bills late and piling up, no munny. Phone rang off the hook. Mailbox stuffed with angry letters. Felt the weight of the world on my shoulders.

Now, about a year after filing, life is somewhat better. Phone calls ended, mailbox less stuffed, kids graduated and getting jobs of their own. But still no job, despite months of sending resumes. Money is tight and I'm struggling to keep up with the trustee payments and mortgage. I may have to let the house go. I've plugged the new numbers into a means test and it's dire. I'm going to call Countrywide on Monday to see if they can help me somehow, and am also going to call my attorney to ask about lowering the trustee payments.

I know it'll get better. It's just a b*tch getting there.

[lrprn]

We tried CCCS debt management for eight months before filing - a complete waste of time and money. We were way over the median income, so when it became obvious that CCCS debt management was going to fail, Ch 13 was truly our only option. It took me three months to convince my husband (our family financial manager up to that time) that filing a 13 was our only way out.

Our 13 was filed almost three years ago and frankly it was the best thing we've ever done for ourselves. We very carefully researched Ch 13 lawyers in our area - ours is top-notch - and frankly that's what saved us from many of the dark holes that too many 13ers find themselves in. Our monthly budget is close but liveable, and that's what helps you to survive for 5 years.

Having an excellent Ch 13 lawyer can make or break you in a 13 right from the start. Writing a good Ch 13 plan that leaves you some breathing room is truly more an art than a science. Finding an experienced bk lawyer who knows the local court and trustee preferences and limits well and is willing to push to ensure you get all the legal exemptions and expenses coming to you - that lawyer is worth whatever fee they ask for.

[kornellred]

lrprn's assessment of Chapter 13 reality is spot-on. The right attorney makes all the difference in the world. I would caution those contemplating Ch 13 that there is an unavoidable element of....luck?...for lack of a better expression....involved in filing. For example, in my own case, my Ch13 filing was done right before my annual bonus check was received, and the 6 months previous to the filing were the months that I typically do not work any overtime hours. As a result, my income was computed at about $10K less on an annual basis than what is normal for me. I also have a company vehicle (which I am required to have) which cuts down on my actual transportation costs. This issue never came up at all.
So....I felt like a fat rat in a cheese factory for a while - until one of my sons ran into hard times. I had to move to a place where we both could live, which doubled my rent, tripled my auto insurance, and forced me to consider budgeting.
Life has a way of changing in unexpected ways. Chapter 13 is the ultimate solution to unmanageable debt when Chapter 7 is out of the question.

[crookedoak]

Life before was great until the wife and I had surgery and lost income. My Father died and unexpected expenses through us into the downward spiral. The final straw before filing was the REPO MAN stopping my 13 year old daughter on the way home from school.

Filing definitely took the heat off and seemed very much like the right thing to do.

Looking back as we await our official discharge 54 months later I sometimes wonder would Chapter 7 have been better.

[BNKRPTinNC]

We floundered for 2 years trying to stay afloat. The final straw was when the mortgage company started foreclosure proceedings that we decided to file. Boy those folks sure get excited when they don't get their money even tho we had kept them abreast of our financial situation throughout. The irony of it all is the mortgage co. is CitiFinancial which is part of CitiGroup which is getting bailed out. Go figure.

Before - we were getting upwards of 30 phone calls a day from bill collectors. The repo guy showed up for the car - he didn't get it as I informed him that I watch tv too and since we were already in the process of filing he couldn't have it. Funny thing about that was I was talking with the bank just prior, on being late (2 months) trying to make arrangements to catch up, and this guy shows up. Gave him attorney's name and sent him on his way.

After - we are in 100% payback on secured @1850 per month which is payroll deducted and we have electric, phone, insurance and the usual household expenses which amount to around $1,000. Learning to budget more closely and still able to bank some each month, so far.

All in all it was the best thing to happen for us as it is allowing us the opportunity to get a fresh start. Our trustee is known for being fair and reasonable and our attorney had a favorable reputation (repo guy knew him, commented that he was good and we live over an hour away from his office). Frankly, I am grateful that there are ways in which to start over when there seems no way out.

[or30313]

Chapter 13 was one of the best things that ever happened to my wife and me.

Four years ago, we owned a couple of businesses that, after many years of success, quickly deteriorated. When the businesses couldn’t support our day-to-day bills (groceries, utilities, gasoline), we started to use credit cards for the first time. Of course, it was supposed to be only a temporary fix until the businesses could get turned around. When we finally realized that things weren’t going to turn around, we were left with a pile of debt, a huge bill to the IRS, and four very expensive long-term commercial leases. We thought our lives were over.

Then, in the midst of the financial crisis, my wife got pregnant. Yikes.

The surprise pregnancy pushed us into action. We visited a bankruptcy lawyer just days after the positive pregnancy test. We had a fantastic lawyer who was incredibly supportive and understanding of our plight. The whole process ended up going much smoother than we thought. On the advice of our lawyer, we waiting until our plan was finalized to shut down the businesses. Since our plan was based off of meager business income at the time, our plan was actually quite manageable. Immediately after our plan was approved, we shut down the businesses and I went back to corporate America.

Since we filed, our lives have gone really well. My return to the corporate world has gone better than expected. I’m making nearly triple what I did when I first got hired four years ago. In fact, I make enough so that my wife can stay at home with the kids (we added a second one since). Since we filed under the old law, we were able to pay off early – 19 months early. Our Chapter 13 was just discharged last week.

Chapter 13 really allowed us to get a new start. With the exception of a small student loan that remained after the plan, we are debt free. We don’t owe the IRS, any credit cards, and most of all the massive commercial leases for our businesses. We don’t worry about money at all any more.

That’s not to say that the process hasn’t changed our approach to money entirely. Even though we have plenty of money to buy new cars, we still driving the old cars we had when we filed. We won’t buy any new cars or anything else unless we pay cash. We now live well under our means – we save nearly 50% of our after-tax income. We’re also going to teach our children to live similarly. Most of all, we will never be in debt ever again.

[walkthaplank]

The final straw before filing was the REPO MAN stopping my 13 year old daughter on the way home from school.

Umm... did this guy survive this episode? There are certain things that are well and truly beyond the pale and this is one of them. I would have been on an episode of cops if somebody bothered my kid because I owe somebody money.

[$$only4ever]

Before we filed chapter 13, we were paying everything on time but our credit cards were maxed out, I did not have any extra cash after paying the monthly payments and it was only a matter of time that we were doomed.

Even though I still have 12 more months left on my bankruptcy, I am better off financially now today than I ever was. I am able to save money every month and all my bills are paid on time. When I am discharged, I will be completely debt-free.

I have learned one valuable lesson: I will never have another credit card again. If I can't pay cash, then it doesn't get bought.

Life is good!