Based on what I have learned and what other entrepreneurs have told me, it sounds like Ch 13 is a TERRIBLE option for an an entrepreneur. I had to close a business (software) last year and am trying to start a new one (services) this year. I have hired a BK attorney and am in the process of finding out if we qualify for Ch 7 based on the means test. I got some severance last year, which was paid late, so I can't qualify based on median income test.
We owe $870K on our first and $120K on our second and $120K in CC debt. Our home is probably valued around $780K.
I'm not sure how Ch 13 works other than you workout a monthly payment arrangement based on your total debt. So I am assuming (and maybe here is where I am wrong) that we would owe $240K (HELOC + CC) over the life of the 5 year plan or $4K per month. If the 2nd gets stripped, we would owe $120K and have to pay up to $2K per month. Our monthly minimum CC payments are currently $2800 and will likely go up considerably as we stop paying the accounts. A debt management plan would run about $2800 per month and we would pay off the debt in 5 years, which at my age (52) feels like a lifetime.
The idea of trying to start a new company and having any income that's over some arbitrary limit (I can't predict what my income will be - the previous company was investor-funded and I had a salary and the company had no revenue) automatically go to the TTs is frankly depressing. What's the incentive for me to try to build a successful business if any "profit" up to $120K or $240K over the next 5 years goes to the TT? I'm better off getting a job at McDonald's
I thought BK was about giving you the opportunity to have a fresh start? I thought that it was put into law to help entrepreneurs if they fail to try again so they can put money into the economy and create new jobs?
I read somewhere that if you're self-employed you have to turn in monthly P&L's to the TT. The idea of having to do this for next 5 years is absolutely unthinkable to me. My attorney has told me that the local TT does not look at annual tax returns because their office is overwhelmed with filings/cases. What if this dude keels over? Then what? Also, if we get our monthly plan set at some arbitrary low number, does this mean we have to live on Kraft's Mac and Cheese for the next 5 years? That we can't take a vacation? That we have to give our relatives Popsicle stick sculptures that we make ourselves because that's all we can afford under the plan? Ch 13 sounds like debtors prison to me.
If it sounds like I am bitter, it's because I am. The f***ing credit card companies won't work with you. I had been making my WFB Visa payments on time for at least two years since we got the card, missed a payment because the company had been previously making the payment and it was transferred to me because I had personally guaranteed it and the statement got lost in the shuffle. WFB doubled my interest rate. I called and explained that the bill literally got lost in the mail and that I am unemployed and asked if they could lower it back down to the previous level. They told me they would only lower it if I made my payment on time for the next 12 months and suggested that I transfer the debt to another bank with a lower rate. Chase won't negotiate a loan mod because I have been making my payments. And I'm supposed to get in f***ing line and pay these people? What they are doing is immoral and used to be illegal. And for this their executives get billions of dollars in bonuses?
I went a year and half without any income when I first started the company and put about $100K of my own money in. We incurred unexpected personal expenses because my son got diagnosed with cancer, so life stopped until he was able to complete chemo. The last 5 years have been hard enough. Another 5 years of being "under the gun" is unfathomable.
So someone please tell me what is so great about a Ch 13? Maybe I am missing something and I plead ignorant to the details of Ch 13, so hopefully I am way off base but at this point I will do anything to avoid this sorry state.
We owe $870K on our first and $120K on our second and $120K in CC debt. Our home is probably valued around $780K.
I'm not sure how Ch 13 works other than you workout a monthly payment arrangement based on your total debt. So I am assuming (and maybe here is where I am wrong) that we would owe $240K (HELOC + CC) over the life of the 5 year plan or $4K per month. If the 2nd gets stripped, we would owe $120K and have to pay up to $2K per month. Our monthly minimum CC payments are currently $2800 and will likely go up considerably as we stop paying the accounts. A debt management plan would run about $2800 per month and we would pay off the debt in 5 years, which at my age (52) feels like a lifetime.
The idea of trying to start a new company and having any income that's over some arbitrary limit (I can't predict what my income will be - the previous company was investor-funded and I had a salary and the company had no revenue) automatically go to the TTs is frankly depressing. What's the incentive for me to try to build a successful business if any "profit" up to $120K or $240K over the next 5 years goes to the TT? I'm better off getting a job at McDonald's
I thought BK was about giving you the opportunity to have a fresh start? I thought that it was put into law to help entrepreneurs if they fail to try again so they can put money into the economy and create new jobs?
I read somewhere that if you're self-employed you have to turn in monthly P&L's to the TT. The idea of having to do this for next 5 years is absolutely unthinkable to me. My attorney has told me that the local TT does not look at annual tax returns because their office is overwhelmed with filings/cases. What if this dude keels over? Then what? Also, if we get our monthly plan set at some arbitrary low number, does this mean we have to live on Kraft's Mac and Cheese for the next 5 years? That we can't take a vacation? That we have to give our relatives Popsicle stick sculptures that we make ourselves because that's all we can afford under the plan? Ch 13 sounds like debtors prison to me.
If it sounds like I am bitter, it's because I am. The f***ing credit card companies won't work with you. I had been making my WFB Visa payments on time for at least two years since we got the card, missed a payment because the company had been previously making the payment and it was transferred to me because I had personally guaranteed it and the statement got lost in the shuffle. WFB doubled my interest rate. I called and explained that the bill literally got lost in the mail and that I am unemployed and asked if they could lower it back down to the previous level. They told me they would only lower it if I made my payment on time for the next 12 months and suggested that I transfer the debt to another bank with a lower rate. Chase won't negotiate a loan mod because I have been making my payments. And I'm supposed to get in f***ing line and pay these people? What they are doing is immoral and used to be illegal. And for this their executives get billions of dollars in bonuses?
I went a year and half without any income when I first started the company and put about $100K of my own money in. We incurred unexpected personal expenses because my son got diagnosed with cancer, so life stopped until he was able to complete chemo. The last 5 years have been hard enough. Another 5 years of being "under the gun" is unfathomable.
So someone please tell me what is so great about a Ch 13? Maybe I am missing something and I plead ignorant to the details of Ch 13, so hopefully I am way off base but at this point I will do anything to avoid this sorry state.
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