Hey all!
This forum has been great through the first couple months of deciding to file and now through my first 18 payments of my 36 month plan. It may sound like it's a bit early to celebrate, but I feel as though I'm over the hump and it will be over before I know it.
Like many posts I've read on here, I too, only have one regret about filing my Ch. 13.: And it's that I didn't do it sooner. If you're on here reading the threads and trying to find tidbits of information to help you decide, I know where you're coming from and here is some knowledge that I now have that I would like share with you. I hope that it helps, even if it's just one person out there.
1: You don't need thousands of dollars up front to pay the attorney. After a free consultation,my law firm only made me pay the $314 filing fee up front. The remainder of the fee was paid out in my Ch. 13 payments to the law firm, through the trustee. It took the first whole year to pay off the lawyers fees and the trustee only took about $35 for himself. My creditors didn't see a dime until my attorney's fee was paid in full.
2: Yes you have to go to court. But your not alone. My day in court, there were so many people they had to split us in to two different rooms. It was basically standing room only. Once I was done and walked outside with the judge's OK to start the plan, there were no hoards of reporters or "BK PAPARAZZI" taking my picture wanting an interview asking me why I was such a financial failure so early in life. I went back to work that afternoon with an undeniably great sense of relief knowing I had legal protection from the credit vultures and a FEASIBLE PLAN that I could complete. My creditors dangled insane settlement offers in front of me every other day. Offering 15% settlements or 25% settlements to get me "FREE AND CLEAR." Assuring me i would never get another offer like this again and this would wipe my slate clean. Which brings me to number 3...
3: The percent of payment your creditor gets. That really doesn't matter. It varies from case to case so I'm told. My creditors are getting back 3%. That means that my one card that I owed $11,000 on, they are getting paid back around $330 and some change. They are the ones who kept offering me 25% settlement. That would have been a payment of just around $2800. Oh, I did the math on that one. And I would have, at the time, taken it gladly had I enough in my bank account to cover it. But like most people in a financial bind looking at BK, you don't have the kind of cash available to settle. And had I taken it, come tax time all of the remaining discharged debt would have become considered income, and therefore taxable in Uncle Sam's eye. I tried the special payment/reduced interest plans offered by most credit card recovery departments. They're a joke. I would pay $370 a month for about 6 or 7 months at a reduced (usually 5%) interest rate and then at the end of that, they would jack the rate back up to the default 27.99% or 31.99% and in one stroke of their keyboard, completely wipe out any and all ground I had gained on the principal of the credit card. I killed myself financially trying to make ground and pay the balances off, but they were the ones not playing fair or trying to squeeze every last penny out of me and then laughing when they could start this vicious cycle all over again and knock me back to step one. So I filed Chapter 13 Bankruptcy.
4: I have the power now. In a chapter 13 bankruptcy, you have the backing of the United States Bankruptcy Court and the laws it upholds and decides that legally binds creditors from contacting you or pursuing any further harassment. Let me tell you, as someone who used to cringe at the sound of my cell ringing, it feels good knowing that now, in bankruptcy, the only time my phone rings is when it's someone I know I want to talk to, or work calling me in. No more letters in the mail reminding you of how far behind you are. One of my credit card companies planned to sue me to get the money I owed them. I got a notice of subpoena to appear in court to face my creditor. I filed bankruptcy through my attorney about a week before the court date. Three days later I got a notice from the court saying that they had dropped all legal proceedings against me. I know I've read on here that some filers have creditors that file adversarial proceedings against them. Some might. In my case, all creditors stopped all communication with me immediately. Not a single phone call or letter. In fact, about 4 months in, I actually started getting credit card offers from other companies. I find that absolutely hysterical.
I know some people might see being tied into a 36 or 60 month plan as a financial prison sentence with an overwhelming sense of futility in even attempting to start it. I only know that in my plan, it's tough, but manageable. And the sense of relief I have while in it is immeasurable. I see my Chapter 13 now as more of a positive thing than I ever could have imagined I would have prior to filing. I never find myself unable to make the plan payment. I just know come payday on the first of the month, I get a money order for the amount I pay and I mail it off. About 4 days later it shows up on the website as payment received and then about two weeks after that on about 17h of the month, the Trustee distributes it out to my creditors.
5: Every month, the Trustee pays out your payment to ALL of your creditors. One doesn't get paid off, then the next one and so on. In my plan,they all split the Ch. 13 payment. The one with the highest principal might get $170, and the one with the lowest balance due might get $6.50. The credit card company that I paid $370 a month to on their "SPECIAL REDUCED INTEREST PLAN", they're getting $17 a month. Except now, they can't jack up the interest rate on me. They are legally forced to take what the Trustee pays them.
In 18 short months, I'll be free and clear. Able to start over again except this time with a great financial wisdom and more of a "if you don't have the money in the bank now, you probably really don't need it" kind of attitude. I save now. And will continue to save in the future. 18 months down, and 18 more to go. To those who face a possible Chapter 13, I say file it without hesitation. The one most common theme I see on this forum is people stating that they wish they had filed sooner. The same is true for me as well. I got into financial trouble back in 2007. I struggled for 3 years with creditor payment plans that got me no where except broke and desperate. I should have filed in 2007 and finished up in 2010, yet I waited until 2010 and will now finish my Chapter 13 in 2013. Better late than never.
This forum has been great through the first couple months of deciding to file and now through my first 18 payments of my 36 month plan. It may sound like it's a bit early to celebrate, but I feel as though I'm over the hump and it will be over before I know it.
Like many posts I've read on here, I too, only have one regret about filing my Ch. 13.: And it's that I didn't do it sooner. If you're on here reading the threads and trying to find tidbits of information to help you decide, I know where you're coming from and here is some knowledge that I now have that I would like share with you. I hope that it helps, even if it's just one person out there.
1: You don't need thousands of dollars up front to pay the attorney. After a free consultation,my law firm only made me pay the $314 filing fee up front. The remainder of the fee was paid out in my Ch. 13 payments to the law firm, through the trustee. It took the first whole year to pay off the lawyers fees and the trustee only took about $35 for himself. My creditors didn't see a dime until my attorney's fee was paid in full.
2: Yes you have to go to court. But your not alone. My day in court, there were so many people they had to split us in to two different rooms. It was basically standing room only. Once I was done and walked outside with the judge's OK to start the plan, there were no hoards of reporters or "BK PAPARAZZI" taking my picture wanting an interview asking me why I was such a financial failure so early in life. I went back to work that afternoon with an undeniably great sense of relief knowing I had legal protection from the credit vultures and a FEASIBLE PLAN that I could complete. My creditors dangled insane settlement offers in front of me every other day. Offering 15% settlements or 25% settlements to get me "FREE AND CLEAR." Assuring me i would never get another offer like this again and this would wipe my slate clean. Which brings me to number 3...
3: The percent of payment your creditor gets. That really doesn't matter. It varies from case to case so I'm told. My creditors are getting back 3%. That means that my one card that I owed $11,000 on, they are getting paid back around $330 and some change. They are the ones who kept offering me 25% settlement. That would have been a payment of just around $2800. Oh, I did the math on that one. And I would have, at the time, taken it gladly had I enough in my bank account to cover it. But like most people in a financial bind looking at BK, you don't have the kind of cash available to settle. And had I taken it, come tax time all of the remaining discharged debt would have become considered income, and therefore taxable in Uncle Sam's eye. I tried the special payment/reduced interest plans offered by most credit card recovery departments. They're a joke. I would pay $370 a month for about 6 or 7 months at a reduced (usually 5%) interest rate and then at the end of that, they would jack the rate back up to the default 27.99% or 31.99% and in one stroke of their keyboard, completely wipe out any and all ground I had gained on the principal of the credit card. I killed myself financially trying to make ground and pay the balances off, but they were the ones not playing fair or trying to squeeze every last penny out of me and then laughing when they could start this vicious cycle all over again and knock me back to step one. So I filed Chapter 13 Bankruptcy.
4: I have the power now. In a chapter 13 bankruptcy, you have the backing of the United States Bankruptcy Court and the laws it upholds and decides that legally binds creditors from contacting you or pursuing any further harassment. Let me tell you, as someone who used to cringe at the sound of my cell ringing, it feels good knowing that now, in bankruptcy, the only time my phone rings is when it's someone I know I want to talk to, or work calling me in. No more letters in the mail reminding you of how far behind you are. One of my credit card companies planned to sue me to get the money I owed them. I got a notice of subpoena to appear in court to face my creditor. I filed bankruptcy through my attorney about a week before the court date. Three days later I got a notice from the court saying that they had dropped all legal proceedings against me. I know I've read on here that some filers have creditors that file adversarial proceedings against them. Some might. In my case, all creditors stopped all communication with me immediately. Not a single phone call or letter. In fact, about 4 months in, I actually started getting credit card offers from other companies. I find that absolutely hysterical.
I know some people might see being tied into a 36 or 60 month plan as a financial prison sentence with an overwhelming sense of futility in even attempting to start it. I only know that in my plan, it's tough, but manageable. And the sense of relief I have while in it is immeasurable. I see my Chapter 13 now as more of a positive thing than I ever could have imagined I would have prior to filing. I never find myself unable to make the plan payment. I just know come payday on the first of the month, I get a money order for the amount I pay and I mail it off. About 4 days later it shows up on the website as payment received and then about two weeks after that on about 17h of the month, the Trustee distributes it out to my creditors.
5: Every month, the Trustee pays out your payment to ALL of your creditors. One doesn't get paid off, then the next one and so on. In my plan,they all split the Ch. 13 payment. The one with the highest principal might get $170, and the one with the lowest balance due might get $6.50. The credit card company that I paid $370 a month to on their "SPECIAL REDUCED INTEREST PLAN", they're getting $17 a month. Except now, they can't jack up the interest rate on me. They are legally forced to take what the Trustee pays them.
In 18 short months, I'll be free and clear. Able to start over again except this time with a great financial wisdom and more of a "if you don't have the money in the bank now, you probably really don't need it" kind of attitude. I save now. And will continue to save in the future. 18 months down, and 18 more to go. To those who face a possible Chapter 13, I say file it without hesitation. The one most common theme I see on this forum is people stating that they wish they had filed sooner. The same is true for me as well. I got into financial trouble back in 2007. I struggled for 3 years with creditor payment plans that got me no where except broke and desperate. I should have filed in 2007 and finished up in 2010, yet I waited until 2010 and will now finish my Chapter 13 in 2013. Better late than never.
Woo-hoo!
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