Just found this forum and have a million questions

[helluvaman]

Bankruptcy has been in the back of my mind for a while, but I really do not want to pull the trigger and go that route. I guess it is the "stygma" that is really bothering me

I have spoken with an attorney on the phone and she wants 1250 up front to look at it for me. she says her total costs are 2500 plus fees. Does this sound about right?

Due to a messy divorce and poor choices during the marriage, I currently am sadled with 56k in unsecured debts and 9k in a secured loan on my vehicle
The 9k is thru a credit union that I also use for my checking/debit card account.

I make too much to qualify for ch 7, so ch 13 is the option I am looking into.

I printed off the form 22c disposable income form and roughly went thru it filling out the information. It looks like I will be on a 5 year plan, with 550 in disposable income.
Obviously, these figures are not concrete, but are a baseline for me to try to make an semi-informed decision.

Couple of other points.

I have done seasonal landscape work the past couple of years, that has netted a loss, taxwise. I have not done much of any that would show up income wise the last 6 months or so, but will begin to show up in the coming months. I feel a bit guilty, because even though it would be following the letter of the law, my income is going to increase in the coming months.

Since I will be paying off my note on the vehicle, will the credit union cancell my checking/debit card account?

Will all of the 550 in disposable income be applied to the pay-off for the 5 years? Or just a certain % of it?

I have managesd to stay current on everything, except one CC bill. It had a minimum payment of 600ish that I have always made, on time with a little extra. 2 months ago, they cancelled the card and sent me a replacement card because their system had been compromised. No problem, except their computer system would not allow me to access the old account to make my payment on-line. When it became 10 days late, they called me, and I explained the situation, made a payment by phone and they fixed it so I could access the account on-line again, and removed the late/over fee and dropped the rate back to 20% from the 30% they had jacked it to when I became 10 days late. I log on to pay a couple of days ago, and the rate is back to 29.9% and has a minimum payment due of 1800.. WFT

Currently, the interest alone on the Cc debt is 1/3 of my take home pay, and there is no light at the end of the tunnel.

Sorry for the length. Any suggestions??

[optimistic1]

It really is a stygma, and a bunch of myths, dont feel bad to exercise your rights, big time banks and companies are doing it all the time, why not get your own bail out?

$2500 total for a Ch.13 case, is really cheap, I would clarify exactly how much you are paying, sounds like she is rolling the $2500 remainder into your plan, and the real total is $3500-4000. When she says she wants 1250 to "look at it" for you, try to get some clarification about what she means by that, that sounds kinda funny if you ask me. Dont just pick the first attorney you call, act like you are hiring a employee and interview several. The first one I hired, would never return my phone calls, I fired him, and hired another one. He calls me back or emails me the same day within hours.

You are paying off the 9K note on the car? You do realize, that if you do that, and your state exemption for a vehicle is say 5K and its worth 7K, you would need to pay into the plan the non-exempt amount to the creditors. I would just cram down the auto loan and pay it into your plan. I dont see why they would want to close your checking/savings for doing such a good deed.

The complexities of a 13 cannot give your answer here you may need to pay more or less into it, unless you really have looked at everything in your particular case and you can provide more details. The entire $550 is what the claims will receive, whatever that amounts to in 5 years is what they get, nothing more. There are certain districts where there are stipulations to percentages of payback and such, your attorney should know these things.

If you are putting off filing, you can make your CC go late more than 60-90 days or so, they will then be much more willing to lower your interest rate. I had BofA and Juniper both tell me about "programs" with interest rates at like 5%. So, they just dont want you to file BK, cause they wont get a dime. Although, in your case, they would get something, but not all of it.

My suggestion, is, you obviously need relief, so dont feel bad about filing a BK. I am doing a second BK. I filed for a CH.7 in 2004, and two years after that, I was able to obtain new credit cards, new house, brand new car with 0 down. So the myth that you would be scarred for life is just that, a myth. Like the president says, we are in the worst financial crisis since the great depression, do you think you are the only one filing for a BK? Hundreds of thousands are, and banks will understand 5 years from now if you did file, you will be a lower risk anyway at that point.

[helluvaman]

More thoughts

OP here

I have a great job and good pay with no chance to take a drastic pay cut or be laid off.

My biggest problem is with the intersts rates on the unsecured debt.
Do CC companies make deals to get paid?
If i file BK, they will get a small percentage of what I owe them.

Are they ever willing to close the accounts and freeze the interest in exchange for getting a 100% pay-off over time?

Am I going to have to become 60-90 days late to get them to talk about their programs? And have to deal with phone calls for that entire period of time?
Or are they willing to talk before it reaches that point?

[optimistic1]

Sure they will play ball, but you will need to fall behind significantly with them to do that. Some might just sue you, but that is just a theory from my personal experience. I am 120 days past due on all accounts, none have sued. But two have offered programs, which would entail getting a lower interest rate and such.

If you let them age enough, and you save up enough money, Im sure that some might settle the account for pennies on the dollar. But there are no guarantees I suppose.

They might be willing to do the freezing for 100%, but you need to fall behind enough for them to feel like you are in trouble.

They will get a small % if you file BK, in your case based on the $550 disposable you had, they might get 50%. 550 X 60 = 33000, minus 10% for trustee, = 29700. Which is roughly half of what you said you had in unsecured debt.

I cant answer the last part of your questions, but in theory, yes, you need to let them age for them to play ball. Just deal with the phone calls, and tell then you cant pay them anything, you are experiencing financial diffuculties due to the economy. Eventually they will want to help.

I just seen a commercial the other day that showed these original creditors actually helping consumers if they fall behind, it was CITI, and Cap1, and another one. It was being aired on CNN. So they will help, but it depends on which creditor.

They wont help at all if your not late.

Whatever you end up doing, at least you are recognizing the fact that you need help, and that is the first step, instead of robbing Peter to pay Paul.

Good luck, you will make the right decision, especially by coming to this forum, there are plenty of people on here to give you good advice.

[helluvaman]

As luck would have it....

Just got a call from CITI, the only one i am behind on. (because their system locked me out for a month)
I explained the situation, no mention of BK, and they offered to drop the int rate to 9.9 and accept 550 per month for 60 months to pay it off in full.
I didn't agree to anything, said I would need to check the numbers and would get back to them this week.
Should I hold out for a better deal?
I asked how it would show on my credit report, and they said it will show paying as agreed. is this a negative or not?

[optimistic1]

I cant speak from experience, but CITI's program is probably what they offered you, they probably wont accept less, but you could try.

Tell them, "is that the best you can do?" "because I am considering just filing for bankruptcy instead"

See what they say to that, or ask for a supervisor.

Whatever the case, it will look better on your credit report, compared to letting it go 180 days delinquent and being charged off.

[tkharvey]

I am new to this whole idea of bankruptcy too. NEVER thought we'd be in this position but my hubby makes 75% less than he has for the past 15 years (he's in real estate sales). Needless to say, we are not able to pay off our massive amount of debt and are getting ready to file. NOt sure if we are going with a 13 or a 7. Trying to save our house (as we are behind in that, too). My attorney asked for a $1,500 retainer, with the remainder of $3,000 to be paid during out 13 over the five years. So, the price you were given is not bad at all. It's all so confusing and overwhelming. I go on this forum everyday and it seemslike I learn something new each time. Good luck!

[EricaCallaha]

Our Chapter 13 cost us $50 to retain, $274 in filing fees and the balance of $2750 rolled into our plan. You just have to shop around. Go with who feels right and not the first one you see. We saw about 5 and ended up going with the first one we saw because we liked them the best. They have worked out well.

Good luck.

[optimistic1]

Wow, erica, it looks like you got a good deal. $2800 is super reasonable, most attorneys in Arizona charge $3000-$4000, most being $4000.

[EricaCallaha]

I guess it is a perk of being in Utah.

[RustyPeanut]

I am in the beginning process of bankruptcy & I still am not sure if it is what I should do. They are trying to make us pay more than we originally expected to pay so we may rescind our petition. I have learned a few things about credit card companies in the past year. Before you go the bankruptcy route talk with your credit card companies. Most were willing to work with me except for Am Exp. They would not budge in any way & they are my biggest problem. I wish I had know sooner that companies would be willing to temp lower interest rates if you have a hard ship. The interest rates on paying my credit cards late became too much for me & Am Exp kept putting pressure on me to the point of serving me with a law suit. That is why I jumped into the bankruptcy. Now I wish I had hired an atty to fight am exp & work with the other companies myself. Discover & Citicard were willing to work with me so if by chance they are your credit card company please make an effort to speak with them. All they can do is say "no". Hope this helps. I would be nice to know that someone else could learn from my mistakes.
RustyPeanut

[optimistic1]

Sorry to hear Rusty, I am hoping that the payment I came up with for my 13 will remain the same, I already expressed my concern about this with my attorney. Let us all pray, that it does, I need an attorney that will fight for the lowest payment.

[walkthaplank]

Just got a call from CITI, the only one i am behind on. (because their system locked me out for a month)
I explained the situation, no mention of BK, and they offered to drop the int rate to 9.9 and accept 550 per month for 60 months to pay it off in full.
I didn't agree to anything, said I would need to check the numbers and would get back to them this week.
Should I hold out for a better deal?
I asked how it would show on my credit report, and they said it will show paying as agreed. is this a negative or not?

Citi offered me a 60 month 0% interest if they closed the account. I told them I had to check with my wife and run the numbers. Asked how long I had to respond, he gave me a date just over a week away and two days later they sent it to a collection agency. When I called back to ask WTF and to accept the original offer they said, no and no record of the "offer".

Good luck

[RustyPeanut]

I would hold out for a better deal. The % rate is probably the best you can get but tell them you want to take off 6 months. They may take off a year if you agree to a direct debit every month until paid in full. Also do not pay them from a checking acct because you do not want them to have your acct information (just makes sure they cannot take anything out without your approval). Send money orders, cashiers checks or open another checking acct somewhere just for the purpose of paying them. If they already have your info open a new account for everything else you need. Don't know anything about the credit rating.
I will be praying for you,
Good Luck, Mary Ann

[helluvaman]

better deal

I called them yesterday, and told them that a friend got 0% for 60 months.
they immediatly dropped mine to 0% as well. no problems,
Cut what i have been paying by almost half.