Chap 13...3 questions.

If you have huge unsecured debt, I think that you should go for debt settlement where you are only required to pay 40 to 50% of the outstanding debt amount. You can file bankruptcy, but it may bring down your credit score drastically. Chapter 13 bankruptcy may stay on your credit report for 7 to 10 years.

Debt settlement brings your score down too and you always run the risk of being sued while in the process.

Cheeseater I am in virtually the same position as you but my debt is at $80k. What do you mean by 10%? Is he saying that you will only have to pay back 10% of the 110k that you owe over 5 years?

Cheeseater can I ask what state you are in? (WI perhaps? lol) It apparently depends on the state. You will need others from the same state to advise you. I have *heard* they will take bonuses unless you can prove it's unlikely to happen.

met with a different lawyer who seems to think I'll pass the means test for Chapter 7. I hope I do because he told me any bonuses for the next 5 years would go to the Trustee in a 13. I stopped paying 2 cards this month. Next month I'll stop paying the rest. When I mention 10% it was referring to 10% of the 110k over 5 yrs. $183 a month for 60months. Good luck to all.

Cheeseater,

Sorry to ask so many questions (I actually have an appointment May 9th with a lawyer for a 13). When going over your income to determine repayment, did they use your gross or your net income?

Thanks in advance.

Its your gross

Thanks Imale. That's not good. I hope there is something that reflects taxes and other deductions etc.

That was me above.

My understanding is they start with your gross, however taxes are taken into account.

Write down all your expenses leave out CC debt as it will be wiped out. If you are negative you'll probably be able to go chapter 7 make sure you're lawyer is not pushing you into a 13 if you can avoid. My first lawyer didn't want to hear a thing about 7 all he did was look at pay stubs and say you have to go 13. My next lawyer spent about an hour doing a quick means test and said 7 was probably possible. Timing is important income is calculated on the last 6 months. If I wait 6 months past my wife's bonus to file 15% on our income falls off. Good luck

Thank you again. I really would rather do the 13 anyway but just don't want to get hit with a $1,000 a month payment or something. I can probably comfortably do about 5 to 6 hundred a month. My card payments all together are about in the $2,500 a month range (well, when I was current on them).
I'm now at the 120+ day mark behind on all but 3. So I think I am just going to bite the bullet. I was going to try and settle but of course there is not enough to save when everything around me that goes wrong costs $1,000 here and $1,000 there.