Scared and Sad!!

[pugs]

I like many others have found it necessary to file for chapter 13. Met with the lawyer last night and still feel terrified. We have unfortunately had quite a bit of income loss over the last few years which then started the vicious cycle of having no cash so then we would charge. We managed for a bit until my cc interest rates blew out of the water...like 26% on some. Yet I have never been late on a bill in my life. Spent hours if not days pleading and begging for them to lower the rates so the min. payments would be managable but to no avail. A percentage here or there is all they would give. I have cashed in everything with cash value we have...I now realize how stupid that was...just to keep us afloat every month. We are currently not behind on mtg or car payments....not even on the cards. We (Family of 4)are in the process of filling out the budget expenses sheet and I must say when I added up all of our regular necessary expenses I don't know how we have held on this long. What I am terrified about is it looks like we will have about 700 disposable income at the end of the month and I fear they will come up with a $2000 a mth repayment plan. I am not worried about giving things up but just scared how this works for people. What have others experienced with this...if they propose a payment that keeps you underwater can you ask for something better. Thank you for listening me vent...any advice would be welcomed.

[BobMango]

Have you consulted an attorney yet? Is there some reason that you need to file a 13 (like needing to do a lien strip), other than you think you won't pass the means test? It's hard to say without your numbers but a few free consults with some bankruptcy attorneys may help clarify your options.

You may want to look at the allowable expenses rather than just what you spend. Many folks have been spending less than what would be allowed while trying to stave off financial ruin, so you may have more options than you think.

Good luck.

[LadyInTheRed]

Welcome to BKforum!

Definitely make sure you don't qualify for a Chap 7. The rest of my response assumes you need to file a Chap 13.

Bankruptcy puts you in control, not the creditors. "They" do not propose a payment. You do, with the help of your attorney. If your disposible income is $700, your plan payment will be $700. If the trustee or a creditor thinks your plan payment is not all of your disposible income, or that it is not sufficient to pay amounts you must pay in the plan (the value of non-exempt assets or pre-petition arrears on unsecured debt, for example), they object. The trustee will object if he thinks your expenses are unreasonable or that you understated your income. You will have an opportunity to negotiate if there is an objection. It is possible you will have to adjust your budget if your spending is considered too high. But, your plan should still be manageable.

There is nothing to be afraid of as long as you are engaged in the process and don't try to hide anything. You will review and sign your petition before it is filed. If the proposed plan payment seems too high, you should discuss that with your attorney before you sign the petition.

Go on free consultations with several attorneys and make sure you retain one who is experienced with Chap 13 and who will fight for a reasonable plan. And don't hesitate to post more questions here.

[pugs]

Thank you or helping to put me at ease. We have met with an attorney and because of our income we have to do a 13 not a 7. We unfortunately had a big loss of income and it started the vicious cc cycle. we are about 80,000 in cc debt..it sickens me to write that. With the high interest rates and min payments they won't budge on I am stuck. I have tried everything to figure a way out of this and BK seems to be the only option. I want to repay the creditors but not at their outrageous terms. We are current on our mtg, Heloc,car payments and taxes. Thank you for giving me a place to post and not feel ashamed.

[plumbroke]

We were in your same situation. We were afraid people would come to carry off our personal items. We were also afraid that we would not be able to make a high payment. Thankfully we found an experienced bankruptcy attorney that helped us to make sure we had a workable budget. We put down an amount for clothing and she looked at it and said really, you only need that amount? She then worked with us to boost or lower amounts to make a working budget and a payment plan that she thought the trustee would approve. The whole bankruptcy from the court standpoint was smooth. We filed in June of 2009 and our case was just closed on 12/30/13. We had a few rough months and had to borrow a little money from my parents for things we hadn't planned for, but now we have money in savings, no credit cards and no debts other than our mortgage. The point being is to interview several lawyers and find one that has a good relationship or knowledge of the trustee's expectations. We are extremely happy with how our 13 turned out. Our goal now is to work on getting our mortgage refinanced at a lower rate.

[pugs]

Thank you for sharing your experience. I am afraid of the unknown but it can't be worse than how I feel right now!! I meet with our attorney on Monday to go over the budget and see if I am on target with things. I am sure I will have many more questions it is great to know that people really do survive this!! Congrats on becoming debt free and most of all free from all that worry!!!

[TheBajan]

Pugs,

Welcome to the forum.

For us the worst part of BK was all the stress we were under before we filed. Once we filed, it was a step forward for the first time in over 3 years. I know it's all pretty terrifying at the moment. We were scared too. We kept hearing different atty's tell us everything we were going to lose and how much our payment would be. Much more than we could afford. I would cry thinking we were too broke to even go bankrupt. We spoke to several attorneys and finally found one who proposed a completely different picture for us. In the end, our payment ended up being less than $300 and we didn't lose any of our assets.

There is a lot of good advice and cyber-hugs here. It's a wonderful site to learn and to vent. You're gonna be okay.

The Bajan

PlumBroke.... congrats!

[pugs]

I cannot begin to tell all of you how much better you have made me feel!!!! Thank you from the bottom of my heart. I will keep you updated as we go forward!!!!

[jange]

pugs don't feel ashamed. We have all been through it, so you are among friends. Your payment plan is based on what you can afford not on what you owe. Your trustee will probably try to find more money in your budget, but if you and your attorney created a good plan, it shouldn't change much. I know mine did go up $300 a month and while I didn't think so in the beginning, we have been able to manage it ok. I am now in my final year of payments, you will be amazed at how quickly time flies. Just make sure you save a little every month for those emergencies that will happen.

[LadyInTheRed]

We have met with an attorney and because of our income we have to do a 13 not a 7.

This statement always makes me want to ask more questions. Did the attorney say it was just your income that disqualified you from a Chap 7? Did he actually run the means test to make sure you can't pass even though your income is above median? There are attorneys out there who will push somebody into a Chap 13 because they don't want to do the work to get them a Chap 7 discharge. There was at least one person who came to BKforum saying "an attorney told me I make too much money to file a Chap 7." We told them to consult with more attorneys and they ended up in a Chap 7. Before you file Chap 13, make sure you understand how to qualify for a Chap 7 and why you don't qualify.

[BNKRPTinNC]

Having a competent and knowledgeable attorney is key. Plus, heed the advice of those that have been there done that as there is a veritable cornucopia of info to be had on this forum. You are definitely not alone as we owed close to $100k in unsecured cc debt when we finally decided to file and are now awaiting discharge. When I think back to the start of all this we had a grand total of about $100 in our pockets until the next paycheck and a month away from Xmas. When you've hit bottom there is nowhere to go but up and even though there were a few bumps in the road we are at the end and let me tell you it's a grand feeling. Best of luck to you and even this will come to pass.

[makeupho]

i know the feeling. we filed 13 in march 2009 and are now awaiting discharge. we felt so much better after we filed, because it was the beginning of the path to make things better. best wishes for you and know that a lot of us can relate. you can get through this.

[pugs]

yes...he did the means test with us and it looks like we do not qualify. It also had to do with our exemptions and assests. We just found ourselves being completely cash poor at the end of each month and then we statred getting upside down...no cash so we would charge groceries, then that would drive up our min payments...over and over again. We do plan on speaking with another attorney just to compare their info.

[Mik3]

Welcome to BKforum!

If your disposible income is $700, your plan payment will be $700.

How low an amount can this go down to before the plan becomes unreasonable to qualify?

It is possible you will have to adjust your budget if your spending is considered too high.

When considering a budget, is it more so maximum dollar based to the federal limits, or unique to an individuals expenses and how subjective can this be amongst trustees?

Mike

[angel2002]

How low an amount can this go down to before the plan becomes unreasonable to qualify?

Mike

Hi Mike,

When me and my husband went in for our creditor meeting there were a few people ahead of us. Since we were all in the same room we got to listen in when it was their turn. I do not know technically how low the plan payments can go. We were all asked if we would be able to pay our $xyz payment each month by the judge. One gentleman had an $86/mo payment and another had a $73/month payment. I almost envied them but then realized of course that that was their disposable income and my heart just about broke in half.