Chapter 7 vs. Chapter 13??

[Lena72]

[momofthree]

Chances are high that a chapter 13 bankruptcy will cost you more than $5000. You're better off filing the ch. 7. Once you file, the garnishment should stop, so file ASAP. Making 7 or 8 payments to save your car in a ch 7 would be a much better situation than making 36-60 payments just to save your car...

[Lena72]

Thank you, momofthree! You are right...need to not panic, just deal with it!

[TEW]

If you are making 30 K a years I'm not sure you have a choice about filing chapter 7.
Whats the exemption on the car and how much is it worth.
How much is your rent ect.

[Lena72]

Do you mean that I may not qualify for 13? I am not certain of my car exemption...my attorney pulled up Kelly Blue Book and gave me a rough estimate of how much I would need to come up with for the trustee. At the time, it was valued at around 8,000 and the attorney stated I would need to come up with "about" 5,500..."at the most." My rent is 500.00 a month. Thanks for you inmput!

[raidermom]

If you file chapter 7, can't you keep the car if you continue making payments on it? We make only 32k/year (we are a family of 3) and even in Missisisppi we fall well under the maximum allowed for chapter 7. We don't have car payments, though, the only asset we have is our home--payment is $350/month. All of our debt is cc and medical bills

[Lena72]

Hi Raidermom, My car is my only asset...I actually own it, so I am trying to keep it. I bought the car after receiving a profit sharing check when I changed jobs. At the time, I didnt think I was going to file BK and needed a new car. So, I used the money for that and paying off misc department store card and I settled on large CC 4000 from a 6000 bill. The payments that I am referring to is trying to come up with money at the end of the month to pay to keep it from the trustee. The garnishment is expected to take 250.00 out each check, which will slow down the me even filing.

[Lena72]

Raidermom -- how far along are you in the process?

[SMinGA]

If you have $400 per month remaining, after paying necessary bills and expenses, then you may not be able to file ch. 7. It depends on if you really have $400 per month, or if you can manage to scrape together $400 per month by skipping things that you need but can do without for a little while.

A ch. 13 would result in either a 36 or 60 month payment plan. Attorney fees in a 13 are generally higher than a 7, and part of the payment goes to the trustee as a fee to 'administer' the plan.

I have read about cases where someone filed ch. 7 and made arrangements to make monthly payments to the trustee to cover non-exempt assets. From the #s you gave, I am guessing that your state has a $2500 vehicle exemption. What state are you in? Some allow for a 'wildcard' when you have no homestead to protect, and others give you the option of using federal OR state guidelines.

[raidermom]

Raidermom -- how far along are you in the process?

We're still considering filing....we'll probably just go ahead and do it in the next month. Due to an injury, my husband was out of work for several months, and had to have surgery and therapy afterward. Anyway, to make a long story short, we wound up using all of our savings and now have around 6k in cc debt and 8k in medical bills--that's AFTER Blue Cross paid their part. The sad thing is before all this happened, we had just paid off three cc's in full. Chase actually closed one of the accounts when we paid it off, too. Hubby had the card for over 10 years, never late, always paid well more than the minimum payment, too. The other two, as soon as we paid them off, they jacked the interest up from 9% to 21%. Called them up, asked them why and if they could lower it back, and they essentially told us to pound sand.

Anyway, sorry to hijack your thread.......Hope you get things worked out with your car. It is sort of strange that you would have to pay for it again essentially, I guess I just don't get how the system works!

[SMinGA]

Raidermom-each state has guidelines for what can be considered exempt vs. nonexempt property. If you file bankruptcy, and own non-exempt property then you don't get to keep it outright. The trustee can take it - to sell for cash to pay your creditors. Or, you can make an arrangement to pay the trustee for the non-exempt value.

Lena has a paid for car, and its worth more than her state's vehicle exemption.

[raidermom]

Lena has a paid for car, and its worth more than her state's vehicle exemption.

ahhhh, I get it now Guess I was having a menopausal moment I totally forgot about the value limits on the exemption! It's all kind of confusing, but it does make sense in a weird sort of way.

[Lena72]

Raidermom - Sorry to hear about your situation and I can somewhat relate. I had 5 major cc's...some dating back to 1993 and never had a creditor calling me for late payment. Fell behind and they all seemed to pounce, jacking up the rates. I worked out deals with all but Discover. They were butts and were the first to file and are now garnishing my wages (until I file BK). Funny, they wanted 350.00 a month, which I couldnt do and would put my debt payment to over 800.00 a month. They are garnishing my wages at 500.00 a month! Dont apologize for thinking you took over my thread, you didnt at all and I value the input.

[Lena72]

SMinGA - Thanks for the response! I live in Missouri. You are right, I really dont have 400.00 a month extra, I am forgoing everything aside from food, gas, medical emergencies. In fact, the 400.00 estimate isnt even realistic, just hopeful. That is if I manage to spend less than 200.00 in all utilities, fuel, and non food household items each month.

[Lena72]

From what I am told by my attorney, there are three trustee in our district and only one will accept payments to keep an item. So, its a gamble on if I should have the money ready. My attorney mentioned that once I file, a date will be set, then I am allowed approx. a month to pay the trustee the amount for the car. Wondering, would it be safe to plan maybe two months from the time I file BK (and stop the garnishments) to the time I need my money? I would like to stop the garnishments asap.