Terrified to file

[Snowewhite]

Hi everyone- I’m filing Chapter 13 due to massive stupidity with credit card debt. So embarrassed and ashamed of myself to be in this situation. I’m single, will certainly be above the income means, don’t have much in expenses. I live in fear right now of collection calls and further action so I have no choice. I’m quite frankly terrified of how high my monthly payments are going to be not to mention the statistics of how few people make it scares the heck out of me.

Any advice, words of wisdom, comforting thoughts would be appreciated.

[shipo]

Contact a number of attorneys in your area and have a consultation; I talked with five before I picked my attorney. The good news is, with the proper attorney representing you, your Chapter 13 should be livable and achievable. True, it will not be sipping bay rum in Jamaica twice a year, but you will get through it.

[flashoflight]

You probably not making minimum payments anymore. Once you've saved up the down payment for the lawyer ($2k-$3k), you should start spending the old minimum payments on deferred maintenance on medical/dental, your pets, and your house maintenance on a regular basis every month as long as they're allowed expenses for bankruptcy. Anything left over pay it to your 401k and then anything left over after that to charitable contributions. If your car is not financed, I would suggest you finance a new car to soak up more of your budget and to ensure your vehicle will last the entire 5 years with a combination of original warranty and an extended warranty from the manufacturer (not 3rd party warranty). I'm a big fan of owning junker cars paid with cash, but the 13 bankruptcy budget gives you a lot more countable expenses if it is a financed vehicle and you need the car to last 5 long years. Talk to a few lawyers and pick one regardless of cost. Unless you are in a 0% or 100% plan, the credit card lenders are effectively subsidizing the lawyer other than the upfront payment.

I also wouldn't put too much stock into the statistics for failed 13s. Many of those are filed to stop foreclosures or have plans that were very poorly made. If you plan your budget right with the right lawyer and don't lose your job, you'll be fine. Don't live on a penny pincher budget until after you file.