Is chapter 13 my only option?

[highnndry]

Hi,

Just joined here and wanted to get some expert opinion. So, I got sued by my credit card company and they have all the statements and contract in order and have filed with the court. The amount isn't much but since I have no job at the moment I can't make any settlement with them. On top of that they want the full balance of $6,255.

So I'm contemplating a ch 13, since my total unsecured debt is close to 30K. And sooner or later they all going to come and get a judgement and get a garnishment in future.

I get jobs off and on as a temp since the job market is so bad and my income is below $48K just under the California threshold. I am single, I rent and have no asset except for a 7 yr old car which is paid off. So my questions are below:

1. What would you guys do in this situation?
2. Would I be able to get a 3 yr ch-13 plan?
3. Should I just live with the judgement which will make it a secured loan.
4. Since no other card company sued me so far, should I just stay under the radar?
5. I'm not concerned about bk in my report but I'm concerned about garnishment, because companies doesn't look took too favorably on those.
6. Also if I get hit with another suit and another garnishment then that will make it even worse that ch-13.
7. Is there a step by step procedure for ch-13 for Californians, I'm new to this?

Thanks in advance.

[kornellred]

Don't bother with Chapter 13. Go straight for the Chapter 7.

[LadyInTheRed]

Yes, go for a 7. Why would you consider a 13?

[highnndry]

I had a small business and had to file ch 7, that was 6 years ago. So ch 13 is the only option right now, unless you guys have other ideas. All I need was to stall the law suit untill I get a job, but this creditor is forcing me to file ch 13. I hate to do this but what choice do I have right now?

[mountanddo]

When I filed my chapter 13 I was working a temp job. I had to have paystubs to show that I was working steadily. If you have no income you might have a hard time getting a plan approved since you have to have income to fund it. Also, I'm not sure that a judgement turns unsecured debt into a secured loan. After you file chapter 13 you won't get sued or have any garnishments.

[keepsmiling]

Are you currently working?
If not, this is not the time to file.

[highnndry]

Currently working as a consultant, some weeks I have a job other week I don't. Every month I have income to do a small payment plan, I can do a $200 monthly plan. Don't know if thats gonna fly by the trustee?

[lillymarlene]

Currently working as a consultant, some weeks I have a job other week I don't. Every month I have income to do a small payment plan, I can do a $200 monthly plan. Don't know if thats gonna fly by the trustee?

It probably would depend upon your district. I pay about $200 per month, and some people here pay even less.

[highnndry]

District? I'm in Los Angeles. The reason I was concerned because 36 month X 200 = $7,200, So out of $35,000 debt I'll be paying only 20%. Is that normal to pay 20% of unsecured debt in a ch 13. If so that gives me a lot more confident.

[mountanddo]

I'm paying 0% back in mine. Well I'm paying the attorney fees, the trustee fees and a whooping total of $100 to all my unsecured creditors. My payment is $100/month for 36 months.

[Nofilb]

I'd recommend talking to a few attorneys. They can assess your situation and give you good advice. I'm getting ready to go chap 13 but have to do 5 years. Good luck!!

[highnndry]

How do they determine if its 5 yr or 3 yr? Thanks for the encouraging news mountanddo.

[mountanddo]

I'm in a 3 year plan because I am under median income. Don't know if it's that encouraging. I'd personally rather pay back 100% because that would mean my income was a lot higher!

[Nofilb]

For me, it was the amount of money I made annually. I think you should be able to file the 3 year plan.

[LadyInTheRed]

If you are under median, which it sounds like you are, you can do a 3 year plan as long as you can show enough DMI to propose a feasible 3 year plan. That means your DMI would have to be enough to pay any arrears on secured debt, the value of any non exempt property, attorney fees and trustee fees paid through the plan, if any. While some trustees may look more closely at a plan that pays little to unsecured creditors, when push comes to shove, the percentage to unsecured creditors is really unimportant. Unless you have non-exempt assets, the unsecured creditors don't have to get anything if your DMI isn't hight enough to pay them anything. My plan doesn't eve say what percentage is going to unsecured creditors. It just says "pro tanto" meaning whatever is left. It will be much less than 1%.