Bankruptcy is no longer about getting a fresh start - it is about managing pain.

[CATCHMEIFYOUCAN]

http://thebklawyer.com/thebkblog/page/2/

[treehugger1]

Great post! This is my current situation, exactly! I have to file 13 if I file, but if I file "now," I will potentially be hamstrung with a payment plan I can't possibly complete. Hence, I must temporarily live with garnishments, and if my situtation never changes, I could have garnishments for years, because it doesn't "pencil out" finanicially fo rme to file 13. I guess I have been trying to address this in other posts, but the fact that the attorney who this piece recognizes the potential for some debtors to live with ongoing garnishments, only convinces me that my dilemma is not unique. There is a "cost" associated with BK 13 that many debtors will not afford. Such a cost is not just the cost of filing, but the cost of doing withtou income that one truly needs to survive. Wow, again, it sems I am not the only one considering the option of "ongoing garnishment." Thanks, Catchme.

[SinkingFast]

My sister is in limbo too. She in the midst of divorce. Hubby has control of the house and basically forced Sis onto the streets to fend for herself on a take home pay of $1400/mo and an old, ratty car that needs a lot of work.

My best guess is her Creditors won't come after her. She has a low paying job. The car isn't worth much, and she rents so no property to file a lien against. Wage garnishments in her State are only good for 90 days. Meaning Creditor have to re-up every 3 months. Why bother. It's not cost effective to get 25% of nothing.

So Sis has to live with the calls while she tries to pay her Divorce attny and get the necessary docs from an adversarial STBEX who has all their papers.

If this was an ammicable divorce, she could go ahead and file. But it's not, so she's gonna have to wait til the divorce is said and done to know where she stands.

[treehugger1]

I wish your sister the best. $1400.00 is not a lot to survive on, but hopefully there will be some reasonable outcome to the divorce. It is interesting that in Oregon we also have the 90 day rule. Even if a creditor gets a judgment and files a writ of garnishment, if they can't get all their money in 90 days (debt is too big and will take several months of garnishments) the garnishments must stop and the creditor must refile. I suppose this is why local creditors who hold smaller debts of mine are more likely to try the judgment/garnishment approach, and out-of-state creditors are less likely. Still, there can be the "pain" of dealing with collectors, etc.

[CATCHMEIFYOUCAN]

Hi Mr TreeHugger

You don't have to deal with the pain of the collectors, just don't answer your phone! Have they gone so far as garnishing your wages already? I thought you were keeping them at bay by paying them so much a month? I never got in that "deep," with the creditors before I filed, THAT IS I never got any phone calls. Actually I was the one calling them trying to negotiate (not really just B.S'ing with them - keeping them at bay, paying the minimums if not below.) I did get letters, but those "friendly reminder," ones. I had several CHASE reps on the phone saying different things, one actually told me I wasn't allowed to file BK because I had just opened my account. She didn't know what she was talking about. I was a good paying customer too! She agreed that I was a good paying customer but would not agree to drop one of the finance charges. She screwed up she said that I would have to be delinquent. That totally didn't make sense! I asked her so your willing to help a delinquent customer than you are more willing to help a good paying customer. I think I got her all ravelled up saying stupid things so I asked to speak to her Supervisor - who apologized saying "yeah that doesn't make sense what she said," we'll let this finance charge drop but you must send in a payment, I was like yeah yeah - you'll get it! Blah blah blah. The credit world is a mess and I will take responsibility but they must take part of it as well for pushing themselves onto the world!

CMIYC Just my thoughts

[treehugger1]

Many of my creditors are working with me, but I did have one (who a I thought I had an agreement with) file a claim with small claims court. I'm trying to work with them rather than deal with a garnishment, but I can live with whatever happens. If I get a garnishment, then I may not be able to live up to other agreements. But, at the time of negotiations, I didn't have a garnishment. I can't help what other creditors do that make it harder for creditors without a garnishment. I even explained this to BoA/MBNA and they said they would do their best to work with whatever my situation becomes. As a side note, I just estimated my contracted wages for the three months May, June, and July, and I'm looking at an average takehome pay of approximately $4000/month. Compare this to my average three month pay last Nov, Dec, and Jan of approximately $6200, and my current setting (Feb, Mar, and May) of approximately $5400, and there is a definite pattern of rapidly declining wages (less and less overload/overtime). I expect the three months for July, Aug, and Oct to average only $3200 take home. This is outside of my control. Much of my debt I took on was at a time where my takehome salary was quite stable at $5200/month. It could very well be the case, that if I have to file in Nov or Dec, I'll be in a 13 that will only pay the minimum of what I would have to cover if I could file a 7. Can I put up with a lot of very angry creditors for 6 - 9 months? You bet. With no assets, and some potential garnishments, I don't see how filing for BK 13 benefits me, other than a stay. I just have to ride through this storm and see where my income goes.

[CATCHMEIFYOUCAN]

When I filed they calculated my GROSS amount not TAKE HOME AND calculated that "EXTRA pay period inbetween". Than of course calculated all the deductions (exemptions) whatnot. Did you consider GROSS amount when doing your calcultions?

CMIYC

[treehugger1]

While the means test considers "gross" as the starting point, a 13 payment plan has to take into account "after taxes." Other wise, one would aquire tax liability.