Decided to file Chapter 13

[mountanddo]

I made a decision today to file Chapter 13. I have 20k in unsecured debt and just was delivered a summons to my door last Saturday. I'm going to end up paying $150/month for the next three years. The attorney said I might be able to negotiate $150 to the credit card who is suing me but nothing would be able to stop the other creditors from wanting their money too. If I had a garnishment it would cost me $550/month so this seems more reasonable.

Question though....after three years the total amount that I will have paid back is $5400The attorney fees for Chapter 13 is $2500. Does this mean that my creditors only will be getting a total of $2900 over the next three years and the rest is discharged? If you file Chapter 13 does it matter how cheap or expensive the attorney is since the fee is wrapped up in the plan? I'm confused on that works.

I am very relieved that they are allowing me to file since I have been working temporary for the last year. I guess as long as I show them I have been working they will take a temporary job as employment. I wish I would of looked into it a bit sooner as my stress level would of been a lot less the last year!

Someone in another thread mentioned that Chapter 13 is not cheaper than Chapter 7. In my case it really is as if I wait to file Chapter 7 until September my wages will be garnished until then and then it will cost me $1600+the filing fee which I wouldn't be able to come up with. It is about the same amount but spread out for 3 years instead of 1 year and will allow me to live reasonably. The other option of waiting to file Chapter 7 doesn't even allow me groceries so I'm happy I will be able to eat more than Raman!

Just checking to see if this all sounds reasonable. I'm thankful that I save a bit of money so I can pay the $274 filing fee.

[IamOld]

Mountain hello!!! I can address one part of your question - if your Ch 13 says to pay $150/month and that means that your creditors get - not much- then the creditors get not much, and at the end of the 36 months your debt is discharged. Period. Done. You won't owe anything else on the debt discharged through the BK.

[mountanddo]

What determines if you are in Chapter 13 for 3 or 5 years. She said 3 but I don't know how she determined that? I am glad it isn't 5 though.

[momofthree]

Under median income = option of 3-year plan, but can choose to pay for 5 years.
Over median income = must be in a 5-year plan unless debtor is in a 100% plan that pays off sooner.

[mountanddo]

Thank you! Obviously I am making below the median income. Funny, for some reason I thought I was making pretty good money. Sad that $17/hour is BELOW median income. I'll probably not make much more than that.