Need honest answer about 7 vs 13 from those who have lived it.

[Malazan]

Hi All,

My wife is searching for a job. I am debating what to have her do in the event that she is offered a low paying job.

Right now if she were offered a job paying below $28,000, it would most likely postpone the inevitable and force us into a ch13.

If she rejects the job, it would eventually force us into a ch7, at which point she could take a lower paying job once everything is discharged.

If given the choice, which avenue would you prefer to go down? I like and dislike aspects of both 7 and 13 and am having difficulty deciding which to pursue. Since we realistically only get one chance, advice is much appreciated.

[mynameainttracy]

Unfortunately, I have done both. I filed ch7 after a boyfriend robbed me blind in my early 20's and I filed a ch13 after my husband lost his income when the 2008 fallout started.
My 7 was easy, went relatively painless and I never hurt from it at all. It was pretty easy to re-establish credit and I never really felt any big ramifications from it. Keep in mind however that this was before bk reform, I was young, wasn't in the market for a mortgage and lived in rentals owned by family members.
My 13 on the other hand was in a different time. Credit has been a lot harder to get re-established, even 1.5 yrs post discharge. I paid into a plan for over 4 years with no credit for it (as far as credit scores go) and can't seem to get my FICO to move until it finally falls off.
Although a 7 stays on your CR for an extra 3 years it doesn't seem to hurt as bad as a ch13 does.
Just MO.

[LadyInTheRed]

My Chap 13 has gone very smoothly. A Chap 13 isn't as bad as some fear, as long as you work with your attorney to make sure the plan is realistic. But, even so, if you can qualify for a 7 and don't have any good reason to file a Chap 13, go for a 7. If your wife is offerred a job, turning it down to qualify for a 7 seems short sighted. Why not file now, before your wife gets a job? Why wait until you are "forced" to file?

[tobee43]

we were constantly trying to be pushed into a 13 from most attys we saw. i insisted going chapter 7 as opposed to the 13 but due to different reasons than many. first these attys were counting our IE and SS and exempt pensions to pay back on a 13. these are all exempt funds. PLUS at the time we did have the IE it was going to stop and we would have ended up having to be forced into a 7 thereby having to pay for both the 13 AND the 7 attys.

also for me it's a personal thing, we are older and have no way of getting hired at the levels were laid off. i do work now, however, most freelance and for, 6 HOAs, 5 attys on a semi part time basis, also for 2 accountants, but only during tax season. we were well into the upper 6 figures before we filed, however, i couldn't even get a full time job as a walmart greeter now. things change in one's life too quickly as i have experienced. getting ill, losing jobs, all unforeseen situations. i could never live with that type of stress where someone has a choke chain on me.

the reverse of that is younger persons with much opportunity to look forward with, although i now feel NO job is secure any longer, have a better chance to recoup loses. there have been numerous success 13 stories on this forum. so i think it really depends on what stage of life you are, and how likely is your financial status likely to change for the worse in the future. that's what made us make the decision we did.

[TheBajan]

We are below income 13 filers so we did have a choice. For us, the 13 was the better choice. I agree with Lady in that a 13 doesn't have to be awful. Our isn't. The key really is to find an attorney who will help you put together a plan payment that is affordable. I can't speak to the ramifications regarding building credit as it is not something that I have much concern over. At this point, it may be something for you to be aware of but not something you should be basing your decisions on. I also agree that you should go ahead and file before you are forced to and have fewer options.

[Malazan]

Thanks to both of you.

LITR, If I were to file now my wife would have to stay out of work to keep us eligible for a ch7. Right now there is still a possibility that she could find a decent paying job before our savings run dry and we are forced to do ch7.

As far as a ch13 goes, here in FL staying employed at a private employer with steady income over 5 years just doesn't seem to be a reality. I wish it were.

[BobMango]

Thanks to both of you.

LITR, If I were to file now my wife would have to stay out of work to keep us eligible for a ch7.

I don't understand this. A Chapter 7 filing is a snapshot, with a look back at your current/past income. If you file when your wife is still unemployed it sounds like you can qualify for a Chapter 7. You will be asked if you anticipate any change in your financial future so I suppose if your wife got a job between the time you file and your 341 that might complicate things, but I agree with LITR regarding turning down a job to qualify for the Chapter 7 being shortsighted. Jobs aren't that easy to get these days.

[Malazan]

You will be asked if you anticipate any change in your financial future so I suppose if your wife got a job between the time you file and your 341 that might complicate things

That is exactly what I am talking about. The example here would be turning down something in the $10-$12/hr range, but that is irrelevant. The main thing I look at is employment length and stability, neither of which seem to be very good the past few years. The LAST thing I want to do is file and pay for a ch13, only to have to convert to a 7 later.

Of course now that I write that it seems I have already made up my mind. Sometimes, you just need to talk these things out with others. Of course I still would appreciate move views on this topic either way before making the final choice. Thank you all!!

[mynameainttracy]

My ch13 plan was not bad at all. We had a great attorney and had no trouble with the payback plan. We were able to get both cars paid off and even build a substantial nest egg while in our 13. I think my biggest problem with a 7 vs a 13 is the fact that so much seems to hang on the date of discharge to rebuild.

[LadyInTheRed]

If you file Chap 7 while your wife is unemployed and she hasn't yet received a job offer, accepting an offer received after filing should make no difference. As BobMango says, your qualification for a Chap 7 is based on the snap shot on the date you file. The only way taking a new job could be a problem is if the trustee can prove that your wife knew she was going to accept a job offer and you quickly filed in order to pass the means test. Many bkforum members have reported getting jobs between filing and the 341. It doesn't always even come up at the 341, but when it does, the response tends to be "congratulations".

[LadyInTheRed]

I think my biggest problem with a 7 vs a 13 is the fact that so much seems to hang on the date of discharge to rebuild.

I think that's a terrible reason to choose a Chap 13 if you can qualify for a 7.

The date a chap 7 falls off your credit report is based on the date of filing, not discharge. Even though a Chap 7 remains on your report longer, you can start rebuilding credit much earlier if you file a Chap 7. The effect of the BK on your credit score diminishes with time, especially if you show you can use credit responsibly.

[mynameainttracy]

I think you misunderstood me or I was as clear as mud. I was saying exactly what you are saying. I was in a 13. If I had had the choice I would have done a 7 because of the discharge dates just as you said.

[LadyInTheRed]

I think you misunderstood me or I was as clear as mud. I was saying exactly what you are saying. I was in a 13. If I had had the choice I would have done a 7 because of the discharge dates just as you said.

Ahhhhh, what you really meant is "...problem with a 13 vs a 7".

I still think that the effect on a credit report really should not be part of the decision, or at least it should be a very small part.