Claims in Chapter 13

[DUMBAGAIN]

Hey gang, I'm still helping my friend figure out her best course of action. I know when we went through our Chapter 13, no payday loan lenders filed claims, and we had like one medical claim. What has been your experience with Payday lenders and medical bills filing claims. She has several of both. I know you never know who will or will not file a claim, but just getting a feel for what she can expect.

[LadyInTheRed]

I had no payday or medical bills. But, whether certain creditors will file claims should play no roll in her decision to file. In planning, she should assume all lenders will file claims.

[justbroke]

I agree with LITR. It makes no difference. Your DMI is your DMI is your DMI (disposable monthly income). Unless you are required to be in a 100% plan, the number of filed (unsecured) claims should not be of any concern. The unsecured creditors share whatever your plan pays to unsecured. If it pays 0%, they get nothing. If it pays 10%, they get their pro-rated share of that 10%.

Filing bankruptcy should be a business decision based on a positive outcome. (You can't escape non-dischargeable debt so filing "solely" for non-dischargeable debt would be fruitless; although it may delay collection efforts you have to think long term.) Bankruptcy is the "nuclear" option and you can only do it every 8 years (for a Chapter 7).

People typically file a Chapter 13 to save property. (Some are forced into Chapter 13 due to their income but the majority use Chapter 13 to save property and cure arrears on property.) I guess the bottom line is, just what does she hope to accomplish by filing under any chapter of bankruptcy?

[kmjatl]

When you file, list all creditors, even medical and payday loans. If they do not file claims, two things can happen:
1) The unfiled claims are listed as a 0% payback, and (eventually) your % payback to other (unsecured) creditors increases.
2) After #1 occurs, the amount of unfiled claims could result in your plan being fully paid sooner. When there's nothing left to pay, the TT has to refund the difference.

For example: I filed with a 32% payback (60 month plan). At some point in time (1 year maybe? I don't remember) my % payback to unsecured increased to 100%. And after 36 months my plan was paid off (I was required to forward tax refunds to the TT - that ended up being about 5 months' payments).

HOWEVER, there is always the possibility a creditor can petition the court to pay a late claim. I only had one of these, for a small amount of state taxes (which can't be discharged) so on the advice of my atty I let them go ahead and pay it.

[FullBoost]

I know when I filed I listed every creditor and was amazed at how many didn't file claims. In fact I recently pulled my credit report and noticed there were two items showing as being in "collections". After looking at them, I relized they were creditors I had included in my filing of the CH 13 back in 2010 but never filed claims. I called both creditors who tried to get me to pay the debt, but I said sorry. This was included in my 13 and you had the chance to get paid back and failed to file a claim. In the end, they both agreed to remove themselves from my credit report so hopefully that will help my score by not having 2 items showing as being in collection.

Even with those two items showing as being in collections, and still in an active 13 my score was 630.

[DUMBAGAIN]

Yeah, you are all right, doesn't matter much. She and her hubby went yesterday to talk to an attorney, she called last night to say, they are going to move forward with the Chapter 13, thanks all