Chapter 13's are high risk...77.5% of closed cases ended in dismissal

[dmc-2008]

it is being saved and not interest on a cc.sammie

I am just starting one too Sammie. How many years is yours? Mine will be a 5!

[justbroke]

OK Justbroke...now i have to ask. How did you manage to switch from a 13 to a 7. I understand why you wanted to do it...but how did you make it happen? I thought if you could make the payments it would've been a 13.

I was a so-called "back door" Chapter 7. That means, I qualified for a Chapter 7 and didn't really have much any DMI. Some Districts frown on that, but my Trustee was making a very good commission! I initially filed Chapter 13 just to save my investment properties (well one of them).

After trying for 20 months and after my monthly payment to the Trustee increased to over $7,400/month, I had to do the right thing. This is when I learned that saving investment (rental) property is just not worth it. Especially when it remained empty throughout the bankruptcy!

[frogger]

This is when I learned that saving investment (rental) property is just not worth it. Especially when it remained empty throughout the bankruptcy!

Wise words indeed. Investment property constantly requires funds to keep it operational, whether due to vacancies, maintenance, or repairs. IMO, investment property has no place in bankruptcy for most people.

[andy158]

Great info. Now I know just how many cases are in my area (district#4). Surprised to see so few. Only a 26% success rate though. Glad to see the trustee has not modified one plan in our paticular location. Our income has risen over 30% since we filed and I am sure we will get dinged next year and our payments go up. The trustee is paid 10% of our $2050/mo payment and maybe doesn't want to rock the boat. So far so good and are fingers are still crossed!

[bobm]

Everyone, you need to look at the body of the report to understand this data. It only shows Ch 13 filed since Oct 17, 2006 when the new law took effect through the end of 2011. Therefore, all of the 5 year plans filed before October that completed in 2011 are not included so the data is very skewed - the report even states that. You can have some faith that most Ch13 are completed and not dismissed.

[HHM]

most Ch13 are completed and not dismissed.

There is no such data that supports that statement. The data isn't necessarily skewed. Other studies support the same conclusion, the "the majority" of chapter 13's do not complete, they are either converted or dismissed.

[justbroke]

I can tell, firsthand, from my Court's docket and my appearance many times, that the number of Chapter 13s not making it to confirmation, being dismissed, or being converted, is certainly a number greater than 50%.

[bobm]

I apologize for my mistake. I saw that there was skewing of data as discussed in the report and made an incorrect assumption that most Ch 13's are successful. I was wrong as pointed out by the more knowledgable moderators. I just hope that all of us in this forum in Ch13 are the ones who make up the "discharged" fraction.

[frogger]

I just hope that all of us in this forum in Ch13 are the ones who make up the "discharged" fraction.

IMO, anyone in this forum is miles ahead of those that are not. You have the tools and advice to help you make it to completion of the plan.

Good luck!

[justbroke]

Agreed with frogger. Those that stay on top of their finances, stay within their budget, and subscribe and participate on BKForum, are much more likely to succeed!

[mwr1ght2002]

I am just curious. How does your chapter 13 end up getting dismissed as a chapter 7 ? I originally wanted to try for a chapter 7 but due to the means test I will be forced into a chapter 13!! I hate the idea of a five year plan!!

[mwr1ght2002]

Mine will be the lowest payment possible too that is 500+600 a month!! My main reason for filing is the secured loan on a vehicle I can no longer afford, and less than 10,000 in unsecured debt! I think that is pretty high payment!

[mwr1ght2002]

I often wonder if I'll set the guinness record for most paid back in a ch13, where the mortgage is not included. I'll finish at over $107,000. $86,400 paid so far, this will be done in May. Let's do this!

Great job!! Toojerm!! I like reading stories of success! It puts my mind at ease~

[justbroke]

I am just curious. How does your chapter 13 end up getting dismissed as a chapter 7 ? I originally wanted to try for a chapter 7 but due to the means test I will be forced into a chapter 13!! I hate the idea of a five year plan!!

I am not understanding the question. When you file a Chapter 7 and then do not meet the Means Testing or Totality of Circumstances tests, your case is subject to dismissal or conversion. So you choose to go into a Chapter 13, or you let your Chapter 7 case be dismissed. No one is "forced" into a Chapter 13. You are given a choice that if you want to stay in Bankruptcy, receive a discharge, and keep creditors at bay, then you need to convert to a Chapter 13. It is a voluntary conversion.

Now, Chapter 13s could be involuntarily converted to Chapter 7s, but those are rare.

[mwr1ght2002]

I am not understanding the question. When you file a Chapter 7 and then do not meet the Means Testing or Totality of Circumstances tests, your case is subject to dismissal or conversion. So you choose to go into a Chapter 13, or you let your Chapter 7 case be dismissed. No one is "forced" into a Chapter 13. You are given a choice that if you want to stay in Bankruptcy, receive a discharge, and keep creditors at bay, then you need to convert to a Chapter 13. It is a voluntary conversion.

Now, Chapter 13s could be involuntarily converted to Chapter 7s, but those are rare.

I was confused on how some people have their Chapter 13 being converted to a Chapter 7~ I saw it mentioned on this forum or on myfico forum!! I was just confused and curious at the same time! Thank you for your response and insight! : )