Epiphany - Maybe?

[holycrap]

I think i made a decision. After meeting with our lawyer last week and getting no positive feelings I have come to the realization that since we are going to have to pay 100% to everyone anyway why shouldn't my wife and i pay our creditors ourselves???

We were going to have to pay our trustee 10% (OR 550.00 EACH MONTH) to make payments for us. We are current on our cars, house and student loans. The only real benefit Ch 13 gave us was interest on CC's and a forced budget that guarenteed us to be out in 60 months.

The cost for those two things was 30,000.00 in trustee fees and 4,000.00 in lawyer fees. Not to mention that my wife and i can settle with each individual creditor for less than current amount owed. We can just start at the creditors with the smallest balance and work our way up. I get commision quarterly so when it comes in there is an amount large enough each qtr to pay off a number os small claims or 1 large claim.

We live in Texas so if i am not mistaken the only thing the CC's can do to us is keep calling until we pay them off.

Federal taxes and Property taxes are different, but they are willing to take payments and nobody will be asking for 10% on top of the amount.

Am i missing something? Is there a trapdoor i am forgetting about? It seems like something i should have been thinking of for months, but i was so dead set on filing that i never considered taking control myself.

Tell me if i am fooling myself or am i on the right track.

[AngelinaCatHub]

That is great HC. At least the forum gave you some comfort and thinking time. The little you have invested is just a good education into bk. Success here does NOT have to be a discharge, only a NEW START in life. Seems you have worked your New Start out. Keep us informed. 'Hub

[holycrap]

That is great HC. At least the forum gave you some comfort and thinking time. The little you have invested is just a good education into bk. Success here does NOT have to be a discharge, only a NEW START in life. Seems you have worked your New Start out. Keep us informed. 'Hub

I don't think everyone here could understand what this forum has meant to me and my wife. It demystified the process and allowed us to see all of our options.

It taught us to question our lawyer and NOT assume she was always right.

I know without this forum we would still be chasing our tales and most likely still be in our downward spiral.

We will still be coming here frequently. We are still "in CH 13", but we are managing it ourselves and keeping a little more of our own money.

[lrprn]

The best advantage to Ch 13 vs. doing it yourself is that Ch 13 forces *all* your creditors to agree to reorganizing the debts. Doing it yourself means creditors who want to cooperate will, and those that don't want to cooperate, won't.

Another issue to consider is that in the do-it-yourself plan, if your creditors reduce the amount you owe as part of the negotiation, you'll owe taxes on the forgiven debt. In Ch 13 you don't.

One more disadvantage to doing it yourself is that your creditors can change your cc terms at will for at least a while longer.

Last, if you get into an unexpected rough financial patch during your do-it-yourself approach, your creditors are going to pile on the late fees and penalties. They can't do that in a Ch 13. If you do run into unexpected problems, your do-it-yourself approach is very likely to run longer than five years and leaves you no protection from your creditors going after your assets and income. Ch 13 protects both.

If you can guarantee you can avoid all of the above situations for five years, then maybe doing it yourself makes sense. However, keep in mind that your creditors have no obligation whatsoever to cooperate with whatever you think makes sense. In Ch 13, they have no choice but to cooperate. At the end of your Ch 13 plan's five years, your unsecured debt is 100% gone and your secured debt is under control.

Up to you to go the direction that you think is best, of course. Just do so with your eyes wide open.

[flyinbroke]

I am in the similar situation as the OP. Live in TX, own nothing, up to date on secureds, cross collaterals, and student loans. Will owe the IRS but their interest is nothing compared to CCs if you can't PIF. I am actually snowballing my much smaller debts, which can be gone in a few months. Putting money aside, since my first budget was much too tight to maneuver in.

I most likely will file, to get rid of the big CCs that have been closed due to opting out, but hate to have a bunch of money in there that can be eliminated ahead of time.

[forgotten]

I am actually snowballing my much smaller debts, which can be gone in a few months. Putting money aside, since my first budget was much too tight to maneuver in.

I most likely will file, to get rid of the big CCs that have been closed due to opting out, but hate to have a bunch of money in there that can be eliminated ahead of time.

Why would you be paying off debt if you are going to file BK?

[flyinbroke]

Why would you be paying off debt if you are going to file BK?

I have no idea in hindsight...since it sounds like once you file a 13 everyone slams the door on you creditwise anyways. Mostly because I used them fairly recently before I seriously looked at BK and need to pay something towards them in the meantime.

[holycrap]

Why would you be paying off debt if you are going to file BK?

I was thinking the same thing, but then i thought this:

Why should i pay someone 10% of my Federal and Property taxes which total 40,000.00 when i can clear that debt up in less than 12 months by myself. If i want to file at that point to get rid of the unsecureds I can or i can begin dealing with my creditors one-by-one and see if i can't fix this thing myself.

I can always file at a later date if i need to, but you only get one shot at it.

I admit my situation is different. We are going to pay 100% back no matter how we do the numbers so i figured why spend 10% of my total 220K in debt to someone for just sending out my checks for me.

[flyinbroke]

Same here on ther percentage front. I have very few allowable exemptions, and am single which means I get paltry ones to begin with. My first atty has me paying about 90 percent back. If one or two don't file proof of claim (I don't know of anyone here who has had 100 percent file POC but maybe there are) I will wind up paying 100 percent anyways.

Of my 18 accounts, only 5 are in arrears; the others are current because they were either used recently, non dischargeable, secured or cross collateralized in some way, shape or form. I am thinking of doing my homework lawyer-wise, and putting things off as far as I can.

[holycrap]

Of my 18 accounts, only 5 are in arrears; the others are current because they were either used recently, non dischargeable, secured or cross collateralized in some way, shape or form. I am thinking of doing my homework lawyer-wise, and putting things off as far as I can.

I may very well just be doing the same thing...that is putting off the enevitable, but at the very least i will be paying the trustee less in the end. Plus i feel like i have a little control. Even if it is just the illusion of control.

[flyinbroke]

For me, it is the senselessness of rolling a car that will be paid off in about 15 months into a 60 month plan. It is the knowledge that I will be stuck paying in full anyways, even though it leaves me with little padding for real life. I will ultimately do it, but so long as I am not getting sued I have time to pace and shop for the ideal attorney and the ideal time to completely nuke what is left of my credit (bye bye dreams of homeownership.) And yes, the less I have to pay back of that PIF, the less I have to pay to trustees.