Met with 2 attorneys today, the first was an arrogant jerk. He didn't even look at the information I brought as to our income and debts but was trying to bully his opinion we should only do a chapter 13. He charges $4500 for it. I told him we wanted a chapter 7 only, he was very aggressive in pushing a 13. The second attorney was great, listened to my concerns and was patient and explained everything well, plus his fees are alot less than the other attorney. Now I don't know what we should do. Our home is worth less than what we owe on the 1st mortgage, we want to keep it anyway. He said we could do a 13 for 3 yr. and have the lien stripped for the 2nd. What are the negatives to doing a 13 versus a 7? I don't like that this would be dragged out for 3 yr. plus how does this show on your credit reporting if you do a 13? Seems like that would be 3 yr. of negative on your credit report, opposed to doing a 7 and at least starting to build your credit back up when you are discharged.
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Filed BK Chapter 7 - 11/12/10 341 Meeting - 01/07/11
Notice of no distribution - 01/12/11
DISCHARGED - 03/09/2011 -
Chapter 7 stays on the credit report for ten years from discharge (about 90 days from filing). Chapter 13 stays on the credit report for 7 years from discharge (3-5 years from filing). If you are in a chapter 13 for 3 years the credit hit is the same time frame as a chapter 7. In either case you can start rebuilding your credit just weeks after filing.
You cannot do a second mortgage lien strip in chapter 7. All secured debt must be current at the time of filing chapter 7, if you want to keep it.
So if you want the house and need to strip the second you'll need to file chapter 13. A chapter 13 case usually runs about $3500 with $1500 up front and the remaining $2000 rolled into the plan payment. A chapter 7 can run $1500-$2000 typically, sometimes more, sometimes less, just depends on how complex the case is. Chapter 7 attorney fee must be paid in full before filing.
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