Chapter 13...the end of the world????

[mdl]

Can someone tell me why I read so many posts from people on here saying that Chapter 13 is the worst thing you can do? I just read one where someone said Debt Negotiation was much preferred to Chapter 13, like that is the end of the world?
I notice that a majority of people want a 7 or they are already in a 7.
Why so much 13 nose turning?
We never even thought of a 7. Of course, we would not have been able to anyway, as 75% of ours is taxes. We just needed a break from the interest and penalties.
Now that we have filed, we are going to pay $1000 a month, which is fine with us.
My car alone was $496 for another 3 years and the taxes would have been FOREVER.
That doesnt even bring in the credit cards, which are going to get ZERO.

But, back to my original question - why do some thing 13 is the end of the world?

[keepsmiling]

You must be reading a different board lol. Debt negotiation is rarely touted on this board. A recent discussion was about someone who had a specific reason for avoiding a 13 and thus attempting settlement, but that is the exception and not the rule here.

Keep reading. Many here are reasonably happy with their 13's. It all depends on pre-planning and an attorney who will fight for you.

[justbroke]

Chapter 13 is not worse than debt negotiation since a Chapter 13 is a court ordered negotiation. Only in a Chapter 13 could you be free of all debt, and not even pay a penny on unsecured debt (in a 0% plan). The real issue is whether your Chapter 13 would pay back 100% to unsecured creditors. If so, then debt settlement "may" work. However, if you had that kind of money laying around, why would you be in default on so many credit accounts anyhow? I would never suggest depleting a 401(k) for this strategy either for obvious reasons.

[HHM]

What your reading is the "concern" about qualifying for chapter 7 vs 13, but when it comes to 13 vs debt settlement, chapter 13 is, hands down, the better option.

Think of it this way, what other option gives YOU, the debtor, the power to TELL your creditors how much they will get from you and there is nothing your creditors can do about it. That is how chapter 13 works. If you make too much money to qualify for a chapter 7, then you do chapter 13 and say, hey, Chase Visa, I owe you $20,000, but I am going to pay you $3,000 and oh, by the way, I will do it over 60 months. You CANT do that with debt settlement.

[LadyInTheRed]

I think people who make a Chap 13 sound like the end of the world fit into 3 categories: (1) people trying to sell debt settlement programs (2) people who filed a 13 and had a hard time for one of many reasons (never should have been in a 13 in the first place, ahd significant loss of income or increase in expenses during the 13 or had a badly drafted plan and lousy attorney, for a few examples) and (3) people who are scared and haven't fully investigated how a 13 works (probably because they've listened to the first 2 groups).

If you are comfortable with your plan, don't let what others say make you second guess your decision.

[Pandora]

Agree with all of the above - Ch. 13 is not a "death sentence" so long as you / your lawyer have allocated everything accordingly and appropriately. For instance: we just got back from a week at the beach - first time in 2 years we've gone anywhere and it was GREAT! We saved for this since last year, putting aside our allocated "fun money" along with some other money in order to go; we allocated $1500, but ended up spending around $1100; stayed in our RV less than 50 yards from the ocean - and we even came home with $400 to boot after doing all the fun things (jet skis, dolphin watching, dinners out, gift shop, etc)

So is Ch. 13 terrible as some make it out to be? No... Do you have to plan carefully? Yep, absolutely you do. Do unexpected things come up from time to time that are more $ than what you allocated? Yep - but it all works out in the end if your plan is done right.

Hang in there - and have confidence that you can do it!

[mdl]

Oh, I totally believe we will be better off. 13 could be not be as bad as my phone ringing constantly, robbing peter to pay paul, dreading the mailbox, I could go on and on....

[bkrelief22]

Just wanted to add to this...we're 4 months from the end of our ch 13 and it was ABSOLUTELY the best thing that ever happened to us. It got us first to realize where all our money was going..yep every penny...then if forced us to not only have a budget but to stick to it...so much so that we've decided that once we're finished we're going to pretty much stay on this buget and bank the bk payment. We have just learned so much about finances, and ourselves...when you go through this process you truly learn what is really important. It is definitely a discipline process!!! I have no desire whatsoever to have a credit card. WHY??? Because the power is in paying CASH for everything. You realize that our society tries to lure you into the cc process. Just look at the number of stores that you enter and they say "would you like to save another 15% on your purchase by opening a credit card??" That's BS...any savings is gone with the new annual fee. It really is a joke. Well, that's my two cents...

[queeniam75]

Good morning all,

I'm new and this is my first post...Please go easy on me
I have been toying with filing chapter 13 for the last 7months now. I am very scared b/c I filed chapter 7 over ten years ago when I was young and dumb...But I owe uncle SAM almost 50K and owe 20k on a car worth only 12K not to mention the $600 a month car note for 2 more years...but after the means test it looks like I have $500 left over and that concerns the lawyer. I'm SO TIRED of being STRESSED OUT about this.

[mdl]

Everyone will be nice....they have been to me!
Are you saying you will have $500 left AFTER your Uncle Sam and car payment?
Our 13 is just going to pay Sam and our car payment. That is included in my $1100 payment...
We havent had our 341 meeting yet, but I feel SO stress-FREE! at this point.
The only thing I was worried about was my family finding out.....My sister read it in the paper Sunday....so I am sure the rest of my family will know soon enough.
But then I thought about it.....NO ONE in my family is going through what MY family is............disabled husband for almost 4 years......it is a business decision...........

[queeniam75]

thx mdl
The payment right now would stand about $1191 (from the means test)...so I guess he was looking for a payment of about $700 or $800 which would be fine by me! but he said what ever you have an disposable has to go towards your monthly payment. I'm alright with the $1191 b/c that is what i'm paying $1750 in taxes and car payment so that payment would be a help but I guess he wants to see if I left something out (expense wise) so I'm going back in this week to look at everything with him face to face

[tbon]

I agree with you bkrelief22~ we will be finished in Jan 2012,filed Jan 2007, been a long haul, but the best decision we ever made... well, except that had we done it 6 months BEFORE, we would be out NOW...advice to others...QUIT procrastinating....you will regret that you didnt "get on with it".....!!

[dontburnthep]

We have chosen the debt settlement route and even so, I would say that a well planned chapter 13 is a far better option then settlement in almost all cases. To avoid being in our situation: find a good lawyer, pre-plan, pre-plan, pre-plan, then plan some more. We did no pre-planning and had a terrible lawyer and that has left us with settlement as a better option, but if I could do it over, I'd take a well-planned 13 in a heartbeat.