Fewer than 40% of ppl who filed Ch. 13 had to go to a 7

[debtmonster]

"Fewer than 40% of Chapter 13 filers examined in a 2007 study actually completed repayment plans. Some were converted into Chapter 7 filings, which allowed the debtors to erase most of their unsecured debt, while others were simply dismissed, leaving borrowers once again vulnerable to collectors."

http://articles.moneycentral.msn.com/Banking/YourCreditRating/why-credit-counseling-often-fails.aspx?page=2

Interesting.

More proof on my unorthodox posts that Filing a Chapter 7 is the way to go.

They can have my house and both of my upside down in equity cars. Think of it this way... you can always make money and buy it again. It's not the end of the world. $40,000+ came out of my own pocket towards the down payment, monthly payments, insurance and taxes in the past few years and I am WALKING AWAY. I'll rent for a while and save up to buy another house. It's not the end of the world.

For those thinking about Ch. 7 or 13... think hard about doing a Ch. 13.

Sorry for my controversial posts, but that's just the way I feel about it.

No more keeping up with the Jones for me! I learned my lesson. I hope everyone here can learn theirs.

Once I get back on my feet and get one or two cars paid for in our possession, next I have to find out how to invest for retirement Stage II.

[justbroke]

I agree. If you can file a Chapter 7, then do so! A Chapter 13 is useful, but I wouldn't use it for mundane and insignificant unsecured debt. Most debtors know nothing about bankruptcy pre-planning and most BK attorneys don't even care about the planning aspect. As soon as you walk in their door, they size you up and say Chapter 13... usually just by the amount of annual income you have. (e.g. being over the median-income.)

[HHM]

Honestly, I think the reason is that since they made chapter 13's 60 months, too many things change in that time. Granted, there are attorneys that push borderline 7's into chapter 13's, but the main reason, IMO, is 3 fold (1) the required length of chapter 13's is too long, (2) poor representation when it comes to the chapter 13 budget, AND (3), the chapter 13 debtor's unwillingness to make the necessary changes to make a chapter 13 work. Because a chapter 13 is so long, the debtor loses sight of the prize.

[killinstinct]

HHM speaks the truth!! This again underscores the importance of planning your BK as one would plan any strategic business move. If you can file at some point and be under median, do it. This is in your best interest. Chapter 13's take much discipline and have their place, but by far the most effective relief for most consumers is to file under Chapter 7.

[HHM]

Too many people get hung up on the chapter 13 vs chapter 7 issues. Some people (most people), no matter what they do will not qualify for a chapter 7. But they get locked in to comparing a 7 vs 13 when what they really should be doing is comparing a 13 to other "real" options. For most people who file a chapter 13, there is NO WAY they could get out of debt, on their own, in 5 years or less. That is the true comparison.

[debtmonster]

If you have a household income of like $130,000/yr. and your median is $50,000, then yeah, that's going to be very tough to do a 7 unless you want to quit your job for 6 months and try to go back. That's how we did it. My wife quit her job and hasn't worked in almost 8 to 10 months. I haven't had a day job since October 2007. We're willing to give up everything to get into a 7. If you want to, you can. If you're marketable, you can always go back to that high income again and not have to suffer for 5 whole years paying back stuff.

[killinstinct]

Again, I agree with HHM. That is the true question. If you can't get out of debt on your own in five years or less, then the bottom line is that you should file BK whether 13 or 7.

[HHM]

If you have a household income of like $130,000/yr. and your median is $50,000, then yeah, that's going to be very tough to do a 7 unless you want to quit your job for 6 months and try to go back. That's how we did it. My wife quit her job and hasn't worked in almost 8 to 10 months. I haven't had a day job since October 2007. We're willing to give up everything to get into a 7. If you want to, you can. If you're marketable, you can always go back to that high income again and not have to suffer for 5 whole years paying back stuff.

That is fine, but that is very high risk for most people. Especially pushing 10% unemployment, I think it is a huge "what if" that a person can expect to earn the same after leaving the work force. Believe me, I have seen the people get laid off and only be able to get jobs at half their pay, and they were very marketable.

Plus, I think your mind set is wrong, how is a 13 suffering. You are making 1 payment to the chapter 13 and are otherwise living your life as normal. A successful chapter 13 comes down to budget. Granted, if you have been earning $200,000 per year, you won't be able to maintain that same "lifestyle", but that lifestyle is what got you here in the first place.

[debtmonster]

When I file BK, I DON'T WANT DEBT PAYMENTS. PERIOD! That's the whole purpose of spending thousands of dollars for some lawyer. I want it to end, not drag on for 60 months afterward.

Look how I left the work force. I have no desire to go back. I like staying home and doing what I please. Granted, I am not rich, but I am happier now than I was with those long commutes to work every day as I was a debt-slave.

[frogger]

When I file BK, I DON'T WANT DEBT PAYMENTS. PERIOD!

I like staying home and doing what I please. Granted, I am not rich, but I am happier now than I was with those long commutes to work every day as I was a debt-slave.

I've run the numbers, and it's amazing on just how little I could live on if I didn't have DEBT PAYMENTS!

[debtmonster]

I've run the numbers, and it's amazing on just how little I could live on if I didn't have DEBT PAYMENTS!

I know. It's scary, isn't it?

Now I just have to learn to live on the cheap and pay cash for everything. if I could pull this off for the next 20+ years, I'll be doing good!

Maybe I could pay cash for a house.

My uncle lives in Gloversville, NY and said that they have houses in his neighborhood for around $25,000. He has a colonial house on a 1.25 acre lot that he paid $55,000 for around 5 years ago. He said they have a handy man special for $16,000 nearby.

If I was desperate, I could save up the cash in a few years and move up there and have a house with no payments.

The only thing is that the state income tax for New York is 6.85% So if you make $55,000/yr. and live in Florida, you pay zero. If you move to New York, it will cost $3,700 year to live there. Talk about a scam! I CAN'T STAND TAXES. Once you get used to NOT paying them, it's too hard to go around to paying them. The issue is, you can't buy houses here for $25,000 to $55,000.

[Amy26]

You should be thankful you live in the US with the tax rates that we have. In Europe, taxes are astronomical. Denmark, where I lived, has 180% tax just on cars. Car loans in Denmark typically go from 10 to 30 years at the banks just to keep payments reasonable. Everyone is running around 20 year old cars because they cannot afford nice cars. They pay over 60% of their salaries to the gov't. There is a mandatory Church tax... sure they get "free" health care but is it really free?

They also "regulate" people's take home pay. IE: If Person A makes 20% more than person B they will adjust person A's taxes so that he basically takes home just as much as person B.

They have no incentive over there to better themselves in a career standpoint because it doesn't make much of a difference in your pay. Of course the difference between a goat farmer and a lawyer would be significant but you get my drift.

Be thankful our taxes are what they are.... I hated living overseas. I couldn't wait to get back to the US. I'll gladly pay 3,700 a year for my house as opposed to the crazy taxes they have in Europe.

[debtmonster]

Be thankful our taxes are what they are.... I hated living overseas. I couldn't wait to get back to the US. I'll gladly pay 3,700 a year for my house as opposed to the crazy taxes they have in Europe.

Why can't you just live in Wyoming, Nevada, Texas, Tennessee or New York and pay $0 state income tax? What's wrong with all of these other states? Millions of people happen to live in all of them and have no problems with it.

Find a job with similar pay and move to one of those states.

I'd probably stay out of Wyoming, though. I heard that volcanic activity is ready to go off any time soon. If Nostradamus is right, it may not be fun to live there on December 21st, 2012. I'm sure he's wrong. But ya never know.

If the states above manage to rebuild roads and get by with no state income taxes, why can't other states just copy what they do here?

[Amy26]

Why can't I just live where I want? lol... I wouldn't like living in any of those states. Thankfully I have what is called free will and we live in a free country...for the most part. I also could not find very many jobs in those states for what I do at the rate that I make.

And that wasn't the point of my post anyways.

[debtmonster]

Why can't I just live where I want? lol... I wouldn't like living in any of those states. Thankfully I have what is called free will and we live in a free country...for the most part. I also could not find very many jobs in those states for what I do at the rate that I make.

And that wasn't the point of my post anyways.

But how do you know you would not like living there? Did you live there before? What's wrong with not being in snow and not having your car get rusty and not having to pay high taxes? I don't see anything wrong with this.

I don't understand why people are such masochists. You all truly need to see a psychiatrist since you all seem to love to self-inflict pain.

If up north was so wonderful, there wouldn't be millions of people who transplanted to South Florida to get away from it. That fact alone proves me right.

On the other hand, if you had millions of people move from Texas, South Florida and South California to the northeast, then I would most certainly be wrong and admit it.