Chapter 13 failures

Date: Sat, 02/21/2009 - 18:49
Submitted by on Sat, 02/21/2009 - 18:49
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I think I have read that there is a fairly large failure rate for Chapter 13. So what happens then?

I am still not convinced that this is the way to go but I need to do something. I need someone to give me step by step instructions for how to deal with this.


I think you are right. Many Chapter 13's fail. I believe it's mainly because when you are in a 13 you must stick to a budget in order to make it work. Often folks can't seem to stick to it, and/or life happens--meaning something big comes up, a broken car, sick spouse or kids, etc. Then the entire "budget" gets turned upside down.

There are many folks who do make it through a 13 very nicely. You just have to make sure you have all your "ducks in a row" so to speak and be deligent about your spending.

Good Luck Reny


Submitted by lmale on Sun, 02/22/2009 - 08:42

lmale

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Quote:

So what happens then?

Well, if you don't make the required payments every month, then the trustee will motion to dismiss the BK case. After it gets dismissed, the creditors are free to collect again.

Mainly, as Reny pointed out above, they fail because you really are on a set budget. You will have to list all your income and expenses on the BK petition -- and the court will want any of your income that is available after your "necessary" expenses. They're not going to give you spending money to go out on weekends.

And so you really will have to train yourself to live within the budget they give you. AND you'll have to live within that budget for 3-5 years (or however long your BK is scheduled to last). If you end up spending money on other things, and then can't make the BK payment, it'll get dismissed.


Submitted by DebtCruncher on Sun, 02/22/2009 - 10:45

DebtCruncher

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Well for me that would be a problem because I am self employed and I can't tell you what my income will be each month.

So I think again that I am better off trying to find another solution other than BK. My income is picking up now after a slow Jan. I have been swamped in fact.

Today when one of the CC compainies called me I told them to send me some payment options in writing and that I had 6 other CC I also had to get worked out and so if they didn't reduce some fees and weren't reasonable in their offer, they still wouldn't get paid.

I feel that it will buy me some more time and let me figure this all out. Thanks.


Submitted by on Sun, 02/22/2009 - 13:07

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