Bankruptcy ????? Please help!!!

First things first, I wouldn't threaten bankruptcy to your creditors unless you are actually going to do it.

Second - you definitely need to talk to an attorney about the bankruptcy before you make any decisions - most of them offer free initial consultations to get you started and help you decide whether bankruptcy is the right option for you. Don't panic or make any hasty decisions until you talk to an attorney. Write all your questions down (including the ones you're asking here) and go through them one by one with a qualified attorney.

I am not eligible for Chap. 7 but Chapter 13. I have decided against 13 as I have heard many horror
stories. Has anyone been successful in negotiating with HFC (they have sued me) I owe them 8k plus interest..Do you think they will take a lump sum of $4k ..Do you think I should call their attorney who's name is in the summon or do I call HFC direct. Please let me know as I need to call them tomorrow and get something done before they garnish my check.Thank you

What kind of horror stories have you heard about chapter 13?

With the new laws something like 60 - 80% of all chapter 13's end up failing.

I have been in my Chapter 13 for about 8 months. We have to pay $48 a week to the bankruptcy trustee for 5 years. The reason it is working for us is that the money comes directly out of my husband's paycheck. We never see it so we don't know we had it in the first place. Otherwise, our plan would probably fail too.

I can believe that, Goudah...I've tried very hard to inform those who come here about the ins and outs of Chapter 13 - it's not the easy "fix" it used to be, and it's not cheap. It's a long-term debt repayment plan - not a quick, easy way out.

However, Chapter 13 CAN be a solution for those who want to keep their homes and are headed for foreclosure - but you need to be aware of ALL your options first. Exhaust every other possibility before going the Chapter 13 route - it's a life changing experience, and a long road to the end of the plan. I am not recommending it, by any means, unless you have no other choice.

I don't think bankruptsy is such a horrible thing that people make it out to be. First I would suggest you speak with an attorney and double check your ability to file a 7 instead of a 13. On February 1 2008 they changed the income level for the means test and where I was not able to make a 7 on January 31st I was able to make a 7 with the change. Only a qualified attorney can tell you what all your exemptions are, but I know that my house will be retained by me and the trustee had no issue with that. My mortgage is the 1 bill I made sure was paid every single month regardless of what the credit card companies wanted. As long as your mortgage is in good standing you should be able to keep your house, but I'm no attorney so I can't give you a clear answer there.

Yes, it is true that a lot of chapter 13's fail. I don't understand that personally...first you can have your monthly payment withdrawn from your check so that you can not fail. Second a chapter 13 is a chance to get your life in order and you have to figure what your priorities are. If you are going to pay by check and not have it withdrawn from your check each week then figure out your priorities, decide what you can live without, buy some store brand foods over commercial brands and pinch your pennies. It can be done! You can sicceed! Will it e easy?? No, I would never ever want to suggest it is, but it can be successful if you look at the picture in a way that allows you to see the end of the tunnel. Yes, your credit is going to be shot for awhile...but seriously if you are 40K in debt and you are being sued then chances are your credit is already shot! You already have a house, the biggest thing that you need credit for anyway, so don't think of it as hurting your credit, think of it as repairing your life. Your credit will come back in time, bankruptsy or not the damage is already done.

Also concider this.....credit cards can not report to your creit report for more than 7 years after the last activity BUT they can keep that activity going. They can sell your bill to a collection agency who will pursue you, that agency can sell it to another one and on and on it goes. I had a credit card on my chapter 7 that was there since my college days 15 years ago. It stayed because they kept selling it to someone new and trying different ways to get the money. They even stopped harassing me for awhile so I forgot about them and thought they had disappeared but once we bought our house it started up again. The only way to stop them is to either pay them off or file it seems.

I can tell you exactly why Chapter 13 plans fail. Because the amount of "disposable income" is determined by the courts, not the individual, and leaves you with much less to live on than you would think. You can adjust your lifestyle to deal with that, yes - but you have to keep in mind that when you file, the bills don't stop coming. Yes, you are paying your OLD debts through the Chapter 13 plan, but the NEW bills keep coming. Doctor bills, car repair bills, vet bills, house repair bills, gifts for birthdays & holidays, school field trips, you name it. Those things are not taken into account when the "disposable income" is figured.

One way a Chapter 13 can succeed is if there are two people filing (married couple) and only one of them files, leaving the other income to fall back on. But Chapter 13 can be very difficult for a single parent or single person to work through. Not impossible - but difficult. And anyone filing needs to know the whole story.