New and freaking out a little

[kjrmom911]

Hello,

I have been lurking here for the last three weeks. We are in the baby steps of filing chapter 13 bankruptcy. We have retained an attorney, but still owe 2,500 dollars, so it will be at least June 1st til we can afford to file. We stopped paying all of our creditors at the advice of the attorney (including our heloc, our house is underwater on the 1st mortgate), our attonrey intends to do a lien strip. It is freaking me out as I am terrified they are going to sue us before we can file. How long does it take before they actually try to sue. They call us every hour just about(between all the creditors). Also, my husband owns a small business (sole proprietership), that lost a lot of money last year. I'm worried about how the chapter 13 will work when his income fluctuates so much. He makes quite a bit during the summer but nothing at all during the winter. Any comments are welcome.

[LadyInTheRed]

Welcome! Let's see if we can help you be a little less freaky.

The time it takes for creditors to sue varys, but if you just stopped paying in the last few weeks, you are unlikely to be sued before June. Even if they sue before June, you have 30 days to answer the complaint before they can get a default judgement. After that 30 days, they need to request the judgement and then after they have a judgement they can try to enforce it by garnishing your wages or attaching your bank accounts. All this will take at least 60 days from the time you are served with a lawsuit, and that's if the creditor's attorney is really on the ball.

The credtiors are trying to scare you and wear you down with their calls. Don't let them. Turn off the ringer on your phone and let the calls go to your machine. Some peope buy disposible cell phones and give that number to all of their creditors. Others use Google voice. Check the collections forum for suggestions on how to deal with the calls.

To deal with the fluxuating income, you will need to save money in the months when your husband has a higher income so you can make it through the months when his income is lower. It should help that you are filing at the time of year when his income is higher. Since you don't have equity in your home, you will probably use Exemption System 2 which gives you a good size wildcard exemption (over $24,000). If you don't need the wildcard for other assets, you could delay filing even longer than June and save some cash to give you a good cushion to start with. For more on California Exemptions see my blog entry at http://www.bkforum.com/entry.php?336...tcy-Exemptions

[puggymoo]

you should only have to pay like 775 or so to get things started. The lawyer will get his money every month from the plan until completely paid. We paid 775 and it was filed in less than a month. Now he is completely paid off as a priority claim.

[sheilaE]

Hi Kjrmom911,

You probably have more time then you think. I too was so worried about being sued...we retained our attorney last march and have still yet to file. When we retained him, we put down $100.00 and he told us to tell all creditors that we were filing and to give them his number. We did that and all calls stopped. We've been able to tuck away a some cash for emergencies, and you'll want to do that as well, so you holding off and not paying your bills will help with that. Take your time and read as much as possible on here...you'll learn sooooo very much!!!

[AKB]

We waited six months to file because our income is always way down from December thru February. We paid the lawyer the cost of a chapter 7 and we didn't quality for a 7 so the rest of the fee is included in the 13 plan. We gave the lawyers number to all the callers and they never called back even though we didn't file till 6 months from the time I told them I was filing BK. I think long as you get a lawyer retained they leave you alone. We kept paying our secured till we actually filed.

[kjrmom911]

Thanks everyone. You have made me feel a little better. I realized we were in an impossible situation when I saw that most of our money was going to pay debt and I couldn't even afford to buy my daughter a pair of tennis shoes(even on sale) and her shoes were literally falling apart. I knew it was time to stop the madness at that point.

[AKB]

We were doing without everything to pay credit card bills then when the economy tanked they raised the rates. We had never been late and not paying scared me to death but after they all called and I gave them the lawyers number and they never called back I begin to experience relief like I had never felt. The six months we quit paying cc I was able to have enough put back to pay our big tax bill this year. I know people have bad experiences with chapter 13 but our life is better. We were already living with nothing left over because we would pay bills before anything else including buying groceries. We had about 4000.00 a month in unsecured now we pay 1215.00 which is so much easier. Good luck and don't let it scare you at least when you file they allow you to budget for those shoes.