Looking a Chapter 7 as a way to eliminate credit card debt, many questions...

[DoctorPC]

The Problem with a debit card tied to your bank account is that if subject to fraud/identity theft as mine was some months ago - someone racked up a $760 charge on it - the money comes out of your bank acct and stays out while they investigate it - which can take a week. So that can cause regular checks to bounce.

I now use a credit card with a low limit ($3K) and use it for online purchases

Probably a debit card NOT used online would be relatively safe

I'd suggest you get a second bank account w/ debit card and when you need to make a online purchase, you transfer money into the standby account.
when not in use keep the balance low. so if there is a event, the loss doesn't come with a lot of drama.

[redhunter]

The Problem with a debit card tied to your bank account is that if subject to fraud/identity theft as mine was some months ago - someone racked up a $760 charge on it - the money comes out of your bank acct and stays out while they investigate it - which can take a week. So that can cause regular checks to bounce.

I now use a credit card with a low limit ($3K) and use it for online purchases

Probably a debit card NOT used online would be relatively safe

This is a real concern when you use your main checking account debit card for online purchases or give it to the waiter (this is what I worry about). Using a credit card is a good idea for online or other risky purchases, but if you don't want or can't get a credit card, consider a refillable pre-paid debit card for these type of purchases.

[momofthree]

Wow, 2 years!!! Why did it take so long? Did you have a lot of assets to deal with ? My list is rather short and my former atty said we can have this all wrapped up in under 90 days...
2 years, well, I couldn't wait that long, that's almost 24K I'd give away to the credit companies alone. I'd like to get something in place in the next few months, or at least before Jan or Feb 2011
Beside that if by some miracle I return to work near my former salary, I'd fail the means test

Most people don't make any payments to creditors during the "planning" stage.

[tobee43]

momo...if that's the case...and please, i'm just wanting to be educated in the area...what about the money you are NOT paying with at that time. does the court then ask you where it is and one now needs to add in back into the payout amount??

because i was under the impression during and when in chapter 13 all DMI has to go for payout??

[momofthree]

momo...if that's the case...and please, i'm just wanting to be educated in the area...what about the money you are NOT paying with at that time. does the court then ask you where it is and one now needs to add in back into the payout amount??

because i was under the impression during and when in chapter 13 all DMI has to go for payout??

Our planning stage lasted about 8 months, and we used the money for living expenses during those 8 months. We also experienced a pay cut during that time, so we really didn't have "much" extra when we stopped paying our bills. We did fix our fence that had blown down in a storm, performed some MUCH needed and overdue car maintenance, stocked up on our son's meds, etc. basically took care of ourselves and our property rather than giving it to creditors. When we filed, we didn't have any extra cash on hand...

And, yes, in a ch.13 all dmi does go into the plan. We actually had negative dmi though, and had to cut back on expenses in order to fund our plan. We pay $610/mo. $511 of that is our car payment, the rest is attorney & trustee fees. We chose the 13-route over a ch.7 so that we could strip our 2nd.

[tobee43]

Our planning stage lasted about 8 months, and we used the money for living expenses during those 8 months. We also experienced a pay cut during that time, so we really didn't have "much" extra when we stopped paying our bills. We did fix our fence that had blown down in a storm, performed some MUCH needed and overdue car maintenance, stocked up on our son's meds, etc. basically took care of ourselves and our property rather than giving it to creditors. When we filed, we didn't have any extra cash on hand...

And, yes, in a ch.13 all dmi does go into the plan. We actually had negative dmi though, and had to cut back on expenses in order to fund our plan. We pay $610/mo. $511 of that is our car payment, the rest is attorney & trustee fees. We chose the 13-route over a ch.7 so that we could strip our 2nd.

got it...i just never could understand why one would go a chapter 13. i do absolutely understand many people have no choice...also, i suppose with us, we knew we were never going to be able to guarantee a "set" payment due to illness and job loss...so the thought of a 13 had me shaking in my shoes. but i can understand if you job is secure and you are more certain about the fact you will be able to live up and within the terms of the agreement set forth by the courts...it's certainly an option.