Is Chapter 13 really that bad?

[Nursemikki]

I'm only about 6 months into a 5 yr plan, and while I look at others' sense of relief, I personally am really struggling. As a single person my monthly payment is $825 per month. Looking at the national data center the only claims made have been for my back taxes, and my car that I stupidly reaffirmed. All my unsecured creditors look as if they haven't made claims and my case has been confirmed for moths now. I am hoping against hope since so many creditors didn't make claims my plan will be discharged early.

I recently moved somewhere less expensive hoping to be able to free up a little spending money, but instead I have ended up paying just as much if not more in increased gas and tolls.

I feel like I have traveled down the rabbit hole and I'm trying to be patient, but yeah, for me it is that bad.

[Newday1]

Nursemikki, I hope things work out for you too. Hang in there and don't give up...

[alorth]

I agree with Nursemikki. I am in month 7 of a 5 year plan, and I am frankly miserable, and the road ahead looks exceedingly long and daunting.

Though my circumstances are markedly different from Nursemikki's, it is nice in a way to know I'm not the ONLY one in a 13 that feels so darned bad about it (not to say I'm happy that Nursemikki is having a hard time, because I'm not......schaudenfreude does not apply....I hope things get better for her).

I'd say the majority here seem to be OK with being in a 13 from what I read, and my case is admittedly a little weird and unique.

I just can't help but compare it to serving a 5 year prison sentence (velvet prison though it may be).

Especially when compared to those that get to do a CH 7 and be over and done in 6 months. To think how close we were to being able to do a 7 (that we actually initially filed the 7), yet ultimately not be allowed to do so hurts badly. I am bitter about it and thinking that this should all be done right now, and we should be rebuilding our lives.

Good luck to the OP in whatever happens.

[woeisme]

Woeisme,

Curious what Ohio district are you in, I am about 6 months in my Ch13 after converting Ch7 originally file Oct 2011. Planned Confirmation was Sept 2012 5%.

Have a potential pay increase of about 10% but want to stay under the radar since I will have to petition to incure debt late spring next year when my car lease expires and will have to get a new/newer car to replace it.

I am in the Northern District of Ohio - Akron Region.

KAM

I'm in the Southern District (Zanesville area which seems like it should be "central" not Southern, but whatever). Hope the northern trustees are decent too!

[andy158]

Chapter 13 bk is for a "working" person or family. You must have stable employment to complete the plan. Although there are things you can't control, if given the right attorney and plan you can make the journey in one piece. In our case the plan payment is less than what we were paying just the cc's each month. We have a car that is being paid in the plan as well and another being paid outside the plan. We have a rental property outside the plan and were not forced to liquidate it. It is a break even asset with no significant income or loss from it. The primary reason for us keeping it is that my 83 yr old mom lives in it.

Our income has risen steady over the last 3 years (about 25%), but is usually absorbed through the rising cost of life's other necessities. Our trustee has been hands off since we filed and I hope it stays that way. We have to send in tax returns each year and so far no eyebrows have been raised because of income increases. As someone on this forum said the time of filing is a snapshot of your current situation. You should not be afraid of raises or promotions because you are locked in a 3 or 5 year plan. Life goes on and one should not stiffle furture opportunities. The worst that can happen is your payment is adjusted. They cannot penalize or request back payment of income earned up until the plan is adjusted.

Think of it as financial prole and the trustee is your parole officer. Certain things must be followed, your financial behavior will be monitored, but it is ultimately better than the obvious.

On another note I don't know why HSA's would be considerd as disposable income. If you don't use it you lose it. The money must be used on health care of some sort which is an allowable expense. Its not an account for universal spending.

[chicagoed195]

You are thinking of flexible spending accounts (FSA's) In an FSA, if you do not use your deferrals by the end of the reimbursement period, usually 2 months after the end of the calendar year, you lose the remaining balance.

A Health Savings Account (HSA) accumulates and to the extent the balances are not used to reimburse medical expenses is administered under the IRA rules. So an HSA can operate very much like another retirement plan.

[brandv1]

I know this is an older thread, but I thought my recent experience might be helpful for anyone searching through for info prior to filing.

We filed on Oct. 23rd and our 341 is on Monday. The trustee, in our district wants payment through check garnishment. My company is small enough to have 2 people doing payroll, so from payment 1 was able to go through my employer. It takes a big chunk of my check, but in the long run, on a monthly basis, we are actually paying less than what we were before.

Now, we don't have to worry about not paying this bill yet and paying this one first, etc. And, to top it off we actually have a little to set aside to save for emergencies (not a lot, but hopefully one won't come up until we have the $ saved). We were literally living check to check and having to continue using the credit cards for groceries just to keep payments up.

I, for one, think that CH 13 was the best thing to happen. We tried one of those debt settlement companies and they just screwed us up worse than before and my wages were about to be garnished anyway.

[Newday1]

Once again, thank you to all who have replied. Keep on going everyone! And, please keep contributing your thoughts to help out people who are full of anxiety like I seem to be right now...

[Newday1]

Oh, and brandv1, please let us know how your 341 goes on Monday.

[dmc-2008]

Good luck Brandi.

[katztoo]

Think of it as financial prole and the trustee is your parole officer. Certain things must be followed, your financial behavior will be monitored, but it is ultimately better than the obvious.

This is soooooo true!!!!!!!! If you follow the rules you get total freedom when your sentence is over!

[angel7821]

I am just grateful for the opportunity to dig myself out of the hole I got myself into. 4 months to go and I will be done. I have learned valuable lessons from being in a 13 and will continue to live on a cash only basis for the rest of my life. Being in a 13 is not as bad as I thought it would be. In fact for me it was the best thing I could have done for myself as I filed a 7 back in 2003 and obviously did not learn a thing from that as I ran up the credit cards again and got myself into trouble hence the 13 7 years later.

[dmc-2008]

This is soooooo true!!!!!!!! If you follow the rules you get total freedom when your sentence is over!

I dont know your credit is shot, your 5 years older and if you were able to save any money consider yourself lucky!

[Sammie]

I dont know your credit is shot, your 5 years older and if you were able to save any money consider yourself lucky!

Although what you say is true, my husband and I were so consumed about saving our high credit scores, we took out a second Mortgage & $42,000 early from his 401k to try and pay down debt. What that did was put us in a higher tax bracket where we had to pay IRS $12,000 bc of early withdrawal from his 401. My husbands firm cut out all commissions which led to him having a decrease in pay last yr. of approx. $12,000. This is when we had no other choice then to file for Ch. 13. Our Mtges. are not in our plan (our home is not upside down). Our plan consists of cc debt only. Last month we had a major expense when we had to replace our heating/ac system.

As many on this forum have said, it is important to put as much money away as possible, it is very difficult in this economy. This coming Feb. we will find out if my husbands employment is taking any other benefits away. It is a wait and see game, but anything is possible working together.

We are determined to finish this Ch. 13 in the allotted time (ours is 3 yrs.). I still don't have my new puppy (remember my precious dog passed away unexpectedly the night before our 341) because I want a certain Breed and I have to save up the money to purchase her. It will happen. The grandchildren will be getting less than 1/2 of what they have received in previous Christmases, but there will still be Christmas, it will happen!

It is so important to have a positive attitude no matter what Chapter you are in. The one thing that I am certain of----

SHE DIED WITH A CREDIT SCORE OF 850

will Not be on my tombstone! That Will Not Happen!

[andy158]

It is so important to have a positive attitude no matter what Chapter you are in. The one thing that I am certain of----

SHE DIED WITH A CREDIT SCORE OF 850

will Not be on my tombstone! That Will Not Happen!

Yep. When things get bad or look hopless I always say "50 years from now it won't matter".