question on how chapter 13 works

[rooster0330]

Please excuse my ignorance, but how exactly does a 13 work. I know that you payback a percentage. We have very minimal if no disposible income left every month, our secured debts, cars/house is protected by exemptions. So how would they figure my payback amount. I really want to file a chapter 7 but we are about 15-30 days late on secured debt, most still in the grace period but still late, also, we would need the balance to pay the attorney still owe him 1200, but I understand chapter 13 fee can be put into your payback, and there is no way I am going to be able to get "current' that soon, and the summons are starting to come in and to be frank I want this whole nightmare to be over and I think this may be the best way to solve this.

[newbie2]

Don't enter in to a Chapter 13 if you are less than 30 days late. (Others may differ, so this is just my opinion). You have very little if no disposable income after you pay your secure debt and expenses. A chapter 13 will cost you more money than you have. Even if there are summons coming in you can still buy 30-90 days before a default judgment and garnishment. Do what you can to keep your secured debt under 30 days late and pay off your attorney. Try for a chapter 7 if possible. (Your secured creditors will most likely allow you to "catch up" quickly after you've paid the attorney if you are not too far behind.)

[IamOld]

Rooster - I know this is probably a stupid question, but you're not paying anything to unsecured any more right?

[rooster0330]

No, not paying anything on unsecured debt, just house and cars!

[IamOld]

No, not paying anything on unsecured debt, just house and cars!

Is there ANY way you could have a discussion with an atty? Because if you're no more than 30 days behind on secureds, atty could advise you as to what danger is there with house/cars...

Now, if you get a really good atty, and others on this board will chime in I'm sure, the thing is, if you have say one month of cars/house in arrears, that - over five years - is a very small amount if you divide the arrears by 60 months. So in other words, if your monthly disposable can cover that and only that (or an inconsequential above that) a good atty may put you in the 13, see if you can catch up the arrears (save up for it) and pay off the mort/car arrears, and convert to a 7. BUT bottom line is, please speak to an atty.

ALL will give free consults - some will make you fill out lots of paperwork/get paystubs etc., but that's ok - that way they can give you a better answer!!!

[bpokey]

The first question I have would be what would be used to fund the Chapter 13? If you don't have any money left over and you're not paying the un-secured's now anyway.... how is a 13 going to make your life any easier?

[rooster0330]

The first question I have would be what would be used to fund the Chapter 13? If you don't have any money left over and you're not paying the un-secured's now anyway.... how is a 13 going to make your life any easier?

The 13 would take care of the any arrearage that we have with the car and mortgage....we are no more than 30 days late on anything, if mortgage is due on the 3 of the month we pay on the 30th. I am just trying to get this mess straightened out somehow!

[LadyInTheRed]

We have very minimal if no disposible income left every month, our secured debts, cars/house is protected by exemptions. ...
I really want to file a chapter 7 but we are about 15-30 days late on secured debt, most still in the grace period but still late, also, we would need the balance to pay the attorney still owe him 1200, but I understand chapter 13 fee can be put into your payback, and there is no way I am going to be able to get "current' that soon

The 13 would take care of the any arrearage that we have with the car and mortgage....we are no more than 30 days late on anything, if mortgage is due on the 3 of the month we pay on the 30th. I am just trying to get this mess straightened out somehow!

The 13 can only take care of arrearages if you have disposible income after paying living expenses and current secured debt payments. Your plan payment is your disposable income and must be sufficient to payoff the arrearages, your attorney fees and trustee fees during your 36-60 month plan. If you weren't behind on your secured debt, how much would you have left after paying monthly living expenses and secured debt payments and saving enough to allow you to pay the expenses that come up only one or twice a year? If the answer is little or none, you may not be able to afford your secured assets.