Chapter 13

In Chapter 13 bankruptcy, you will have an affordable repayment plan and allows you to keep your house, car and other property.

People who file for chapter 13 work with their bankruptcy attorney and get the repayment plan finalized with the trustee.

Please think twice before filing any chapter of bankruptcy.

Chapter 13 will allow a debt repayment plan, yes, provided you can stand to give up pretty much ALL of your disposable income - what the law says is your disposable income. Keep in mind, what you call "disposable" and what the law says is "disposable" are probably two very different things. Your paycheck will be garnished for the amount required by the trustee to pay your debts (and your attorney, who will be paid before any of your debts are paid). And yes, you get to keep your house and/or car in Chapter 13, provided you reaffirm the loan on the car or house, or have the payments included in the Chapter 13 debt repayment plan. If you decide to pay those debts outside your Chapter 13 plan, you will be paying those in addition to the amount garnished from your paycheck for the Chapter 13 plan.

Bankruptcy is a MAJOR step, it alters your lifestyle drastically, and affects your credit for many years. Please consider debt counseling before filing for any chapter of bankruptcy.

The old laws were like the debtors arranged the repayment plan after paying the actual living expenses from their disposable income. New laws state that disposable income will be calculated as per the allowed expenses dictated by the IRS. If that disposable income passes the means test as per median in your state, then only chapter 13 is possible.

The worse is yet to come: the allowed expense amounts have to be subtracted from the filer's average income during the six months before filing. Under the old laws, the subtraction was done from the actual income of that month and the previous six months income was not compared. This means that the overall disposable income will grow higher and as a result chapter 13 will also be tough to file.

Think from every point before you consider filing bankruptcy. However, if you have no other options left, this can be assumed to be your last resort.

well i didn't have to pass the means test, i was able to pay my joint debt 100 percent over 5 years and it's NET disposable income....

I've experienced a Chpt. 13. And it was not as bad as some made it out to be. It was the best thing I could've done. I didn't have to give up all of my disposable income, I met with my attorney and developed a monthly budget and from there he determined whether I could do a Chpt. 13. If a major expense occurred then a request was done through my attorney to obtain a "refund" check to cover the unexpected expense (usually a car repair or books for school, which isn't unexpected but an allowable expense to submit for a request). But earlier this year I was hit with 2 HUGE unexpected expenses and fell into the ipdl trap. Thankfully, I freed myself of that one. In OH if you are keeping your house or car it is NOT an option to leave it out, they will pay your mortgage for you on a conduit so that it is kept current, same goes with your car payment.

My husband and I have scheduled a pre-bankruptcy counseling session to prepare for our Chapter 13; however, when I spoke with my attorney about my pdl's she said that sometimes they are included and discharged and sometimes they are not - that they can sue me?? Is that true? The whole point of filing is to get rid of all these "garbage" loans. Please advise.

Only if they were taken out within 90 days of filing chpt. 13

That's what I thought, too, Steelers! I had no problem including PDL's in my Chapter 13.

Well, I took the pdl's out in October and November so I guess I am screwed...what happens if they sue me? Can they sue me even though they are not licensed in MN? How long does Chapter 13 take - and would it be 90 days in the process or would that count? I'm starting to sweat bullets now. My freezer is literally empty and I have two small children - I cannot pay them back what they are asking. I keep getting emails which I am giving to my attorney stating that I need to respond right away but my attorney said not to contact them after they have received my letter stating cooperation. The attorney says I need something in writing - am I correct? Can anyone answer all these questions??? I'm starting to freak out!!

Relax, stressing up won't help! First make sure whether the pdl is licensed in MN. If they are not, be sure that they won't sue you. Per the federal and state laws, a company must be licensed in the state where the borrower resides. With not having a license, they violated the laws and they don't want to be questioned in the court for doing illegal business. This is one strong point to defend.

As a person who filed, I would recommend that you consider all other options before filing for bankruptcy. While bankruptcy was financial freedom for me, I still wished there had been a better method. It is hard having to explain (at least it was) to creditors that you have filed and that it was discharged.

With a chapter 13, you are participating in federal debt consolidation whereby you pay one payment per month until all of your bills are paid. However, under Chapter 13, you have so many years to pay the debt and once you have completed it, it appears on your record for ten years. Be careful and seek other options before considering any kind of federal debt consolidation program.

Have you contacted your creditors to see what other options might be available? Can you possibly work out a payment plan with them whereby your credit would not be as burdensome? Like I said, look at all of your other options before you consider bankruptcy.