ch 13 questions

[jimmy123]

I spoke with one attorney regarding my options of a 7 vs 13. I may actually be better off with a 13, my monthly bills would be lower and I'd keep my car.

My main concern with a 13 is, can I start repairing my credit right away or am I screwed throughout the 5 year period? Does a ch. 7 result in a faster turn around as far as being able to start re-building credit?

[TheBajan]

Welcome!
If you otherwise qualify for a 7, it's possible you may only be in a 13 for 3 years rather than 5. Did your atty say anything about that? I have heard of many people here who started re-building their credit while still in the 13. I'm sure someone can chime in on the fastest way to do that. I highly reccommend visiting a few attorneys before retaining any one. You will be surprised at the differences between one and the next.
Best wishes,
The Bajan

[MSbklawyer]

13 is actually easier on the credit rating than a 7 is. Plus it is on your credit report for only 7 years instead of 10.

[jimmy123]

Thanks for the replies. The attorney did mention a 3 year option with higher payments, if I chose 13 it would be to keep my car and pay what it's worth (Still owe a lot), and have 5 years of relief from student loan phone calls. Although I'd plan on paying them down during those 5 years. I do plan on meeting other attorney's.

Any stories of people recovering credit on a ch 13 would be welcome. I've accepted that I'm going to file, and am debating which route would benefit me the most now while limiting the damage of getting back on track.

[SMinGA2]

You would not be able to start establishing new credit right away after filing ch. 13 - unless your district/trustee only requires approval for credit over $X. Such as if your confirmation order says you must seek the court's approval to take on new debt over $500, then you could open a secured card with a $500 limit.

On the other hand, by the time you finished (in 3-5 years) the public record itself would be aged somewhat already. Public records are most harmful for 2 years or so, then the impact lessens a bit as it continues to get older. Same with your other negatives. Any charge offs, late pays would hurt less* being 3-5 years old.

*My understanding is that the most recent 2 years or so are the most significant on credit score. I'm not saying the other stuff has no impact, but the impact lessens over time.

[lillymarlene]

I've been in a chapter 13 for about 1 1/2 years now, since I wanted to keep my car and hold onto some of my small business. Good jobs at my age are a little tough to find. Not that I'd want to, but I don't believe I can just go off and apply for an unsecured credit card without permission from my attorney and trustee. However, I'm able to have small accounts, mostly net 30, with some of my vendors. For the time being, this and paying my utilities on time is about as far as I can go towards rebuilding credit.