Terrified

[inOverMy]

My husband and I are about to file Chapter 13. We have obtained an attorney. The entire process is terrifying. Reading that only 33% of Chapter13 bankruptcies are successful has me obviously
concerned. I do not think we have another option. I’m afraid of all of it….the shame, the power of the court and trustee over our lives, extended family finding out, managing emergency expenses….its absolutely terrifying. Please share your success stories.

[justbroke]

Welcome to BKForum.

Don't fret with Chapter 13s. The reason they fail is either that the debtor can't or won't stick to a budget. Some of the "failed" Chapter 13s are converted to a Chapter 7. The actual current completion rate is 52% (source: BAPCPA 2023 published statistics - U.S. Courts). In some districts, the completion rate is higher than 80%!!! Some people use a Chapter 13 solely to slow down a foreclosure--forcing the creditor to the bargaining table. The people that do this are typically the ones that cause the high failure rate. Pro Se filers are also among the highest to not complete a Chapter 13 (excluding myself and several members of this forum!).

The Chapter 13 Trustee doesn't control your life. In fact, the Chapter 13 Trustee couldn't care less. The Chapter 13 Trustee is only there to make sure you comply with the terms of the Chapter 13 Plan. The Plan is essentially your contract terms in this so-called "pay to play" scheme called a Chapter 13. For paying the amount calculated, the court holds all your (pre-filing) creditors in abeyance. Protecting you with a no-nonsense shield.

Once you file you'll feel 100% better. Once you get passed the 341 meeting, you'll feel even better. Once you are confirmed, it's essentially maintaining your payments and staying off the Trustee's radar. that simple.

Feel free to ask any questions. There are many former Chapter 13 debtor success stories here. In fact, I believe the Chapter 13 debtors represented by this forum exceed the completion average. We're probably close to 100% here because we rely on each other for emotional and practical support.

Again, welcome to BKForum!

[inOverMy]

Thank you. All of your information and advice put me at ease. It is still scary, but I feel more hopeful.

[shipo]

To underscore what justbroke wrote, virtually all Chapter 13 filers I've ever chatted with have only one regret, "Why didn't I file sooner?"

[inOverMy]

Our BK attorney has recommended that we adjust our federal tax withholding and file chapter 13 after we file 2024 taxes, since we have had refunds in the last 2 years of $4000. (We had extra withheld because we had owed in 2020 and 2021).

She also suggested we buy a car. We have old cars and my husband’s truck has >250k miles on it. Buying a truck was REALLY scary and since we had not paid our cards or loans in over a month, our credit tanked and that was so embarrassing! We got approved at 15% (yikes!) and kept the payment close to $500 with a service contract.

We are now feeling like any day the loan companies will be at our door filing suit. Our wonderful BK attorney has tried to reassure us that all will be ok. I’m crossing my fingers that none of this looks fishy and trusting my attorney. I’m trying to stay in my own lane and trust her many years of experience, but my stomach hurts and all of this is unnerving.

Thank you for responding. I do feel like it might be ok…..I just have to get through the next few months then budget, budget, budget.

[Carmella]

Hello and welcome inOverMy !

I second what shipo said--the regret is NOT doing it sooner! The stress after filing is so much less than the stress prior to filing. I don't even know if I want to call it stress because it was different. I guess less anxiety and feeling like we were moving forward. We had a plan to pay off the debt. We were not continuing to grow interest paying on a credit card and having a small amount actually paid off since the interest was so high. We knew at the end of 60 months we would be free and clear.

My husband and I filed chapter 13 and I totally understand what you are saying--it's scary and the shame that goes along with it.

You don't have to tell anyone you don't want to tell about Chapter 13. We didn't tell anyone except who needed to know. I told our tax guy who we knew for 20+ yrs to only find out he had been through Chapter 13. We told the car dealership when we needed a car. Something interesting is that BK is so taboo you would be surprised how many people have gone through it. PACER is a website that has all the court proceedings and you can review your case there. Well I started to snoop around searching people's names and was very surprised--my next door neighbor, my cousin and a few other people I know. And then the people who brought it up like our tax guy, the apartment manager when my daughter moved out and I said, "I have bad credit I can't cosign," she told me she understands about bad credit she went through BK and I did not share my story! My daughter didn't even know. I overheard nurse's talking about BK. My daughter's then fiancé's parents--the mom accidentally slipped the word BK payment then covered it up (that was before we filed and I was procrastinating) I am glad I ignored her slip and never talked BK as her son dumped my daughter!

It's good advice to buy a car. We had one good car and a junker. The junker died and then we shared a car which was harder on our marriage than the BK! Then my good car was totaled in an accident, luckily we had a rental since I was hit by a drunk driver. We were able to buy another car, though it took time due to the pandemic shortage. People were so nosey about us sharing a car. I am just glad our jobs allowed it. People getting into our business about the car situation. We kept repeating we are paying off debt and saving up for down payment on another car.

If you and your husband agree don't tell anyone. It's no one's business. It's easy enough to say you are tired of credit cards and on a cash budget and you are paying off debt. That was our story, and we stuck with it.

The first few months were the hardest because we had to learn to live different and live on cash. I did a lot of bargain shopping and spent more time going to a few different stores to buy the cheapest priced items. Our situation was different since our young adult daughter, new college grad, was living with us and we had to help her financially. The court did not acknowledge her as part of the family since she was an adult. If it was just the two of us, we would have had more breathing space.

Don't worry about being sued. BTDT. We dragged out feet, procrastinated until the lawyer had the proverbial "come to Jesus" moment with us. If you are sued, it's no big deal. I am actually saying that??? It was super stressful, but we played the game, dragged it out, went to court talked to the creditor and bought more time. I do not recommend this, but you don't get sued and immediately get ordered to pay up and it took MONTHS if not a year for them to actually sue us. I shut the phone off, luckily, they only had the landline number except for one creditor who had the cell number. Just don't answer those calls and turn the sound off your phone if it comes to that.

It sounds like you have a good, experienced attorney which is wonderful.

We had virtually no contact with the trustee, just the 341 meeting. The best thing, I forget who says this, but "don't poke the bear. " When we had to buy a car, the attorney handled the proceedings with the trustee to allow the purchase.

If there is any way to save up some money for unexpected home repairs, etc, some people can set aside money during the BK and we might have been able to if we were not supporting our daughter until she was able to get a decent job. It took time after her college graduation as she had to do low paying internships.

I don't know if you will pay the mortgage/car loan inside side or outside of the plan. If you pay outside the plan (you pay not the trustee) you may lose online access to pay your car or your home loan so be prepared, or at least not blindsided with that. I do not understand it. There was a third party way of paying our one car loan online and the other car was through a local bank which was located at the grocery store so I just paid it when I went shopping. Naturally you could also mail in payments. I paid the mortgage over the phone until one day the online payment appeared--even though the bank told me that was not possible. I didn't argue I just paid online!

As you can see I tend to get long winded. I hope it's not too much info/comments at once. You are welcome to come here and let us know how it's going or if you have any questions or any of life's ups and downs. Especially if you are not telling people it's nice to come here to this friendly group of people who have been through BK or are going through BK.

[inOverMy]

Carmella, you are amazing. I read through this three times. Everyone’s comments have been so helpful. I SO relieved! Thank you for the thorough response!!

[Carmella]

inOverMy You're welcome. Sometimes our best option is BK, it can be a second chance. We struggled for several years trying to pay down debt and while we made mistakes, some life events got in our way of conquering debt. At least with BK 13 we were able to pay off our debt without that interest keeping us from making real progress and during the BK and afterwards it's been so much easier to budget and I don't really want to use any credit cards, but am rebuilding the credit score to use the credit only for that reason or if I have to like some place that only takes credit and I don't want to use my debit card (not that I can't afford to use the debit card).