We filed a Ch 7 in 12/10, which fell apart due to the Ransom decision. We are about to have our case dismissed. After much research, speaking with lawyers, and thought, we've decided not to convert to a 13 at this time. We did no 13 pre-planning because we easily qualified for the 7 and we filed immediately after we stopped paying our creditors, so we had no legitimate expenses such as child care, medical and dental, car maintenance, etc in the 6 months prior to filing because all of our funds went to our creditors. (I'd do anything to be able to go back in time and pre-plan appropriately.) We also have $40K in student loans, and after 5 years in a 13, we would owe much more than we do now. So for us, a successful 13 wouldn't even be a fresh start.
End game plan: settle for less than what 5 years of 90% payback payments would be (approximately 72K) and keep the student loan payments current and in full so we can maybe actually pay them off someday. We owe 70K in credit card debt combined. I owe 40 and my husband owes 30. Only 1 account is joint and that's for $800. That account will be paid in full. My income is not very much, his is substantially more. My plan is to settle his accounts first. We are in NC which is a no garnishment state right now, but there is legislature pending that will make garnishment allowable in November. So we need to have at least his accounts taken care of by November, since 25% garnishment of his income is a very different number then 25% of mine. Once his are paid, we can move on to working on mine but if I get garnished, it would take a very long time for 25% of my income to equal anywhere near 72K.
We've emptied and closed our joint bank account and opened an account just in his name. We've changed our direct deposit to that account. Our employer does not allow paper checks so it has to be direct deposited somewhere, but since we plan to settle all of his debts, we hope that collection efforts won't go as far as a bank levy. If negotiations start to go bad, we'll go to a WalMart money card instead. We have approximately 30% of his debt saved to go toward settlement. We've set up google voice numbers. We've warned our family about calls.
We own no property aside from 21 and 11 year old cars. We are renting.
What am I missing/forgetting/overlooking? This is terrifying, but a poorly planned and unlikely to make it to discharge 13 is slightly more terrifying.
End game plan: settle for less than what 5 years of 90% payback payments would be (approximately 72K) and keep the student loan payments current and in full so we can maybe actually pay them off someday. We owe 70K in credit card debt combined. I owe 40 and my husband owes 30. Only 1 account is joint and that's for $800. That account will be paid in full. My income is not very much, his is substantially more. My plan is to settle his accounts first. We are in NC which is a no garnishment state right now, but there is legislature pending that will make garnishment allowable in November. So we need to have at least his accounts taken care of by November, since 25% garnishment of his income is a very different number then 25% of mine. Once his are paid, we can move on to working on mine but if I get garnished, it would take a very long time for 25% of my income to equal anywhere near 72K.
We've emptied and closed our joint bank account and opened an account just in his name. We've changed our direct deposit to that account. Our employer does not allow paper checks so it has to be direct deposited somewhere, but since we plan to settle all of his debts, we hope that collection efforts won't go as far as a bank levy. If negotiations start to go bad, we'll go to a WalMart money card instead. We have approximately 30% of his debt saved to go toward settlement. We've set up google voice numbers. We've warned our family about calls.
We own no property aside from 21 and 11 year old cars. We are renting.
What am I missing/forgetting/overlooking? This is terrifying, but a poorly planned and unlikely to make it to discharge 13 is slightly more terrifying.
Bankruptcy Wizard
Had to go look it up when the UST objected to the deduction at our 341.
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