My borther is about to file Chapter 13, anyone been through it before?

[AnyMal]

My kid brother came over for dinner las night. I could tell as soon as I saw him that something was up, but didn't ask in front of the family. Ater dinner we went outside, just him and I, and after few minutes of mumbling he dropped the bomb. He's considering filing Chapter 13 because of all the debt he managed to amass in the last few years. We're talking ~$30k in school loans plus $15k in credit card debt and on top of that two months ago he leased a vehicle that is way over his head.

To add insult to injury, he's been sued by one of the credit cards for being so far behind that unless he comes up with a cash settlement (which he won't), they'll garnish his wages. He already talked to an attorney and has an appointment to see him Wednesday morning.

Has anyone been in a similar situation before? How long does it take to recover? When will he be able to buy a house?

Any answers would be greatly appreciated.

 

[Vic]

If he has little to no assets, he should file Chap. 7 liquidation instead. With that much debt, he could be stuck making payments to the Chap. 13 trustee for years and years.

edit: after he is discharged from the bankruptcy, which takes roughly 3 months in a 7 and up to 5 years in a 13, he will have to wait at least 2 years (plus have re-established credit) before he will be able to get a conforming mortgage again.

 

[TwinkleToes77]

if he already talked to an attorney then hes aware that school loans cant be written off in a bankruptcy... otherwise everyone would do it.


*i think*

 

[AnyMal]

I didn't press him for details as far as student loans, it's painful as it is. Are there any advantages to Chapter 7 over Chapter 13 or vice versa?

 

[bozo1]

In many cases student loans can't be discharged.

Chapter 7 is wipe the slate clean. In Chapter 13, you pay back the debt (some or most if it) over time.

You're credit is screwed just as bad for many years either way. Most people go the Chapter 7 route.

He'll lose the car, of course. However, in many states, you can 'reaffirm' a car or mortgage debt when you are doing Chapter 13, and in some states Chapter 7. To reaffirm, you have to bring the debt current, in full, and you cannot be even 1 day late for the rest of the loan. If you are, you are in default and can be sued, and not protected under your current bankrupcy.

I've done alot of research lately about the ins and outs of bankrupcy because of a situation I got myself in a year ago. What I've found is that most people that go for Chapter 13 because it's the 'moral' thing to do, etc., end up filing Chapter 7 later on anyway.

 

[DorkBoy]

student loans/Gov't loans ARE NOT dischargeable!
with only $15k in dischargeable debts it's really not worth it, why ruin his credit for 10 years.

If he has no choice due to garnishment he should look into Chapter 7 which would discharge his $15k, he could also lose the lease vehicle if he wanted too.

Chapter 13 would mean he agrees to pay back the loans/debts, not all but sum that would be up to the judge or clerk.

The most important thing - > go see several lawyers, get their opinions and compare, they're free.

 

[Sepen]

Originally posted by: DorkBoy
student loans/Gov't loans ARE NOT dischargeable!
with only $15k in dischargeable debts it's really not worth it, why ruin his credit for 10 years.

If he has no choice due to garnishment he should look into Chapter 7 which would discharge his $15k, he could also lose the lease vehicle if he wanted too.

Chapter 13 would mean he agrees to pay back the loans/debts, not all but sum that would be up to the judge or clerk.

The most important thing - > go see several lawyers, get their opinions and compare, they're free.

Both my brother and friend went 7 years ago. My brother had a house in 3 years and my friend has purchased vehicles after 4. Heck, my brother now owns 3 homes. Both have CC out the yingyay. I don't believe the 10 year thing at all, not after witnessing these things.

 

[bozo1]

It's on your credit report for 10 years, but you aren't screwed for that long.

Within 6-12 months (sometimes shorter), the first step is to get a 'secured' credit card. That's the only one that you'll be able to get except maybe for those nasty banks that charge huge fees and interest rates. Pay those as agreed and bankrupcy people start seeing true credit opportunities arise in about 3 years and decent interest rates - car, house, etc. - in about 5.

Course, I have no first hand experience, just MANY hours of research when I was considering doing it a while back.

 

[AnyMal]

Originally posted by: Sepen

Originally posted by: DorkBoy
student loans/Gov't loans ARE NOT dischargeable!
with only $15k in dischargeable debts it's really not worth it, why ruin his credit for 10 years.

If he has no choice due to garnishment he should look into Chapter 7 which would discharge his $15k, he could also lose the lease vehicle if he wanted too.

Chapter 13 would mean he agrees to pay back the loans/debts, not all but sum that would be up to the judge or clerk.

The most important thing - > go see several lawyers, get their opinions and compare, they're free.

Both my brother and friend went 7 years ago. My brother had a house in 3 years and my friend has purchased vehicles after 4. Heck, my brother now owns 3 homes. Both have CC out the yingyay. I don't believe the 10 year thing at all, not after witnessing these things.

I know what you mean when you say people choose 13 for "moral" reasons but end up going 7 instead because it's an easy way out. That's what my bro is saying now, he wants to go 13 because "it's the right thing to do", but who knows what he'll be saying after he sees lawyer on Wednesday.

 

[DorkBoy]

Getting loans is not a problem, hell all the companies that get discharged debts would still love you back as a customer since 1.) you cannot refile bankruptacy for a min. of 6 years and 2.) banks,... can legally charge you a higher Int. rate than others, that's the law. As soon as his brother files he'll get sh*t in the mail from local dealers to buy a new car they'll know the day he files since it is a public record. Car dealers can sometimes now charge over 18% Int. rate with a bankruptacy.

I never said you can't get loans I stated that bankruptacy will be on your record for 10 years. My job, with a bankruptacy, would mean -> lose my job. Some companies won't hire you, some renters won't rent to you,blah blah.......
Anything with a background check with the FBI means you're a thief because in their minds(FBI) bad credit means higher pertantage of being a thief.

Bankruptacy isn't that hard to get or live with, hell look at our Gov't it operates in the negative.

 

[Ameesh]

he sounds like a dumbass

 

[rubenswm]

Originally posted by: Ameesh
he sounds like a dumbass

What a nice guy.

 

[DorkBoy]

Originally posted by: AnyMal

Originally posted by: Sepen

Originally posted by: DorkBoy
student loans/Gov't loans ARE NOT dischargeable!
with only $15k in dischargeable debts it's really not worth it, why ruin his credit for 10 years.

If he has no choice due to garnishment he should look into Chapter 7 which would discharge his $15k, he could also lose the lease vehicle if he wanted too.

Chapter 13 would mean he agrees to pay back the loans/debts, not all but sum that would be up to the judge or clerk.

The most important thing - > go see several lawyers, get their opinions and compare, they're free.

Both my brother and friend went 7 years ago. My brother had a house in 3 years and my friend has purchased vehicles after 4. Heck, my brother now owns 3 homes. Both have CC out the yingyay. I don't believe the 10 year thing at all, not after witnessing these things.

I know what you mean when you say people choose 13 for "moral" reasons but end up going 7 instead because it's an easy way out. That's what my bro is saying now, he wants to go 13 because "it's the right thing to do", but who knows what he'll be saying after he sees lawyer on Wednesday.

Screw the "right thing to do", it won't matter after he files, noone will care if it was a 7 or 13.
Have him take care of himself, if he can't pay now he won't manage latter, and what happens if he falls behind again? Then no court or Lawyer will be able to protect him.
I for one believe our society allows this crap to happen too easily. You can't go anywhere and not get credit or a better deal if you would just charge it.


hey look here for more online info

 

[DorkBoy]

Originally posted by: Ameesh
he sounds like a dumbass

geee, maybe we could all be like you and be perfect

 

[nick1985]

Originally posted by: Ameesh
he sounds like a dumbass

die

 

[mugs]

Originally posted by: DorkBoy

Originally posted by: Ameesh
he sounds like a dumbass

geee, maybe we could all be like you and be perfect

You don't have to be perfect to know that you shouldn't lease a car that is above your means when you are over your head in debt.

 

[DorkBoy]

Originally posted by: mugsywwiii

Originally posted by: DorkBoy

Originally posted by: Ameesh
he sounds like a dumbass

geee, maybe we could all be like you and be perfect

You don't have to be perfect to know that you shouldn't lease a car that is above your means when you are over your head in debt.

Ohhh, you have a friend in this thread her name is Ameesh

 

[IamElectro]

Originally posted by: AnyMal
My kid brother came over for dinner las night. I could tell as soon as I saw him that something was up, but didn't ask in front of the family. Ater dinner we went outside, just him and I, and after few minutes of mumbling he dropped the bomb. He's considering filing Chapter 13 because of all the debt he managed to amass in the last few years. We're talking ~$30k in school loans plus $15k in credit card debt and on top of that two months ago he leased a vehicle that is way over his head.

To add insult to injury, he's been sued by one of the credit cards for being so far behind that unless he comes up with a cash settlement (which he won't), they'll garnish his wages. He already talked to an attorney and has an appointment to see him Wednesday morning.

Has anyone been in a similar situation before? How long does it take to recover? When will he be able to buy a house?

Any answers would be greatly appreciated.

I dont see how he was able to lease a car 2 months ago. My dad sells cars and has said many times you have to have better credit to lease than to buy at least thats how it is with Chrysler. For a credit card company to be threating wage garnishment you woud have to be really behind 6 months or more. To a financial institution this would raise some red flags. How did he get the lease?

 

[AnyMal]

Originally posted by: IamElectro

Originally posted by: AnyMal
My kid brother came over for dinner las night. I could tell as soon as I saw him that something was up, but didn't ask in front of the family. Ater dinner we went outside, just him and I, and after few minutes of mumbling he dropped the bomb. He's considering filing Chapter 13 because of all the debt he managed to amass in the last few years. We're talking ~$30k in school loans plus $15k in credit card debt and on top of that two months ago he leased a vehicle that is way over his head.

To add insult to injury, he's been sued by one of the credit cards for being so far behind that unless he comes up with a cash settlement (which he won't), they'll garnish his wages. He already talked to an attorney and has an appointment to see him Wednesday morning.

Has anyone been in a similar situation before? How long does it take to recover? When will he be able to buy a house?

Any answers would be greatly appreciated.

I dont see how he was able to lease a car 2 months ago. My dad sells cars and has said many times you have to have better credit to lease than to buy at least thats how it is with Chrysler. For a credit card company to be threating wage garnishment you woud have to be really behind 6 months or more. To a financial institution this would raise some red flags. How did he get the lease?

Interesting that you mentioned Chrysler because that is exactly who leased a car to him. In fact, he first wanted to finance it but got declined because of his poor rating (lower 500's), however they were more then happy to offer a lease and he went for it.

He was never "technically behind" on his payment. Long story short, he got the CC thru Nextcard three years ago. Had no problems until one time he was late one week and the rate went from 3.9% to 24.99% and they almost tripled his monthly minimum. He tried to plead with them, asking to at least half the interest and payment but they would have none of that. He continued to pay what he could afford and did so every month,but they continued to harass him, compiling the interest and payment. Last year they went out of business and all the billing ceased. Then few months later he was contacted by a collection agency who purchased the account and they demanded cash in full. When he tried to arrange for a payment plan they told him no go, cash up fron only. Then couple of weeks ago he was served with a civil summons. That's the story in short.

Thank you all for the support. If anyone has anymore information, please share.

DorkBoy - thanks a lot! I got the info and will pass it along.

Again, thanks everyone. Despite few assholes and retards, ATOT still has the greatest community on the net.

 

[IamElectro]

Originally posted by: AnyMal

Originally posted by: IamElectro

Originally posted by: AnyMal
My kid brother came over for dinner las night. I could tell as soon as I saw him that something was up, but didn't ask in front of the family. Ater dinner we went outside, just him and I, and after few minutes of mumbling he dropped the bomb. He's considering filing Chapter 13 because of all the debt he managed to amass in the last few years. We're talking ~$30k in school loans plus $15k in credit card debt and on top of that two months ago he leased a vehicle that is way over his head.

To add insult to injury, he's been sued by one of the credit cards for being so far behind that unless he comes up with a cash settlement (which he won't), they'll garnish his wages. He already talked to an attorney and has an appointment to see him Wednesday morning.

Has anyone been in a similar situation before? How long does it take to recover? When will he be able to buy a house?

Any answers would be greatly appreciated.

I dont see how he was able to lease a car 2 months ago. My dad sells cars and has said many times you have to have better credit to lease than to buy at least thats how it is with Chrysler. For a credit card company to be threating wage garnishment you woud have to be really behind 6 months or more. To a financial institution this would raise some red flags. How did he get the lease?

Interesting that you mentioned Chrysler because that is exactly who leased a car to him. In fact, he first wanted to finance it but got declined because of his poor rating (lower 500's), however they were more then happy to offer a lease and he went for it.

He was never "technically behind" on his payment. Long story short, he got the CC thru Nextcard three years ago. Had no problems until one time he was late one week and the rate went from 3.9% to 24.99% and they almost tripled his monthly minimum. He tried to plead with them, asking to at least half the interest and payment but they would have none of that. He continued to pay what he could afford and did so every month,but they continued to harass him, compiling the interest and payment. Last year they went out of business and all the billing ceased. Then few months later he was contacted by a collection agency who purchased the account and they demanded cash in full. When he tried to arrange for a payment plan they told him no go, cash up fron only. Then couple of weeks ago he was served with a civil summons. That's the story in short.

Thank you all for the support. If anyone has anymore information, please share.

DorkBoy - thanks a lot! I got the info and will pass it along.

Again, thanks everyone. Despite few assholes and retards, ATOT still has the greatest community on the net.

The increased intrest is not an uncommon punishment for missing a payment credit card companies are dirty like that but, as far as the collection company goes I surprised they would not work out a payment plan as garnishing wages will probaly take longer to collect the money than if he were making payment to them.

I had a similar experiance 10 years ago with Discover for 3000. I had injured myself and lost my job and was unable to make a couple of payments, with in 3 months had sold my account as a bad debt and a collection company. This company at the time was demanding 500 per month until paid. I told them I could send a 150 until I was back on my feet they said ok.
To make a long story short I sent what I could for a couple of months "150" they turn around and said I agreed to pay 500 and took me to court. I went to court and showed where I was attempting to pay this debt and the judge sided with me and dropped the case. I got off with only paying 600 of the 3000 but it did screw me for about 4 years but they did not get a judgement against me.

Maybe you should advise your brother to see a finacial advisor before going straight for bankruptcy. His debt is not all that bad although I dont know what his income is.

 

[AnyMal]

Originally posted by: IamElectro

Originally posted by: AnyMal

Originally posted by: IamElectro

Originally posted by: AnyMal
My kid brother came over for dinner las night. I could tell as soon as I saw him that something was up, but didn't ask in front of the family. Ater dinner we went outside, just him and I, and after few minutes of mumbling he dropped the bomb. He's considering filing Chapter 13 because of all the debt he managed to amass in the last few years. We're talking ~$30k in school loans plus $15k in credit card debt and on top of that two months ago he leased a vehicle that is way over his head.

To add insult to injury, he's been sued by one of the credit cards for being so far behind that unless he comes up with a cash settlement (which he won't), they'll garnish his wages. He already talked to an attorney and has an appointment to see him Wednesday morning.

Has anyone been in a similar situation before? How long does it take to recover? When will he be able to buy a house?

Any answers would be greatly appreciated.

I dont see how he was able to lease a car 2 months ago. My dad sells cars and has said many times you have to have better credit to lease than to buy at least thats how it is with Chrysler. For a credit card company to be threating wage garnishment you woud have to be really behind 6 months or more. To a financial institution this would raise some red flags. How did he get the lease?

Interesting that you mentioned Chrysler because that is exactly who leased a car to him. In fact, he first wanted to finance it but got declined because of his poor rating (lower 500's), however they were more then happy to offer a lease and he went for it.

He was never "technically behind" on his payment. Long story short, he got the CC thru Nextcard three years ago. Had no problems until one time he was late one week and the rate went from 3.9% to 24.99% and they almost tripled his monthly minimum. He tried to plead with them, asking to at least half the interest and payment but they would have none of that. He continued to pay what he could afford and did so every month,but they continued to harass him, compiling the interest and payment. Last year they went out of business and all the billing ceased. Then few months later he was contacted by a collection agency who purchased the account and they demanded cash in full. When he tried to arrange for a payment plan they told him no go, cash up fron only. Then couple of weeks ago he was served with a civil summons. That's the story in short.

Thank you all for the support. If anyone has anymore information, please share.

DorkBoy - thanks a lot! I got the info and will pass it along.

Again, thanks everyone. Despite few assholes and retards, ATOT still has the greatest community on the net.

The increased intrest is not an uncommon punishment for missing a payment credit card companies are dirty like that but, as far as the collection company goes I surprised they would not work out a payment plan as garnishing wages will probaly take longer to collect the money than if he were making payment to them.

I had a similar experiance 10 years ago with Discover for 3000. I had injured myself and lost my job and was unable to make a couple of payments, with in 3 months had sold my account as a bad debt and a collection company. This company at the time was demanding 500 per month until paid. I told them I could send a 150 until I was back on my feet they said ok.
To make a long story short I sent what I could for a couple of months "150" they turn around and said I agreed to pay 500 and took me to court. I went to court and showed where I was attempting to pay this debt and the judge sided with me and dropped the case. I got off with only paying 600 of the 3000 but it did screw me for about 4 years but they did not get a judgement against me.

Maybe you should advise your brother to see a finacial advisor before going straight for bankruptcy. His debt is not all that bad although I dont know what his income is.

He is going to call the attorney that represents the collection agency tomorrow and try to negotiate. Since he is current on all his other accounts he would rather have it settled then go brankruptcy rout, which does makes sense. So I guess his final decision will depend on the outcome of his conversation with the plaintiff's attorney tomorrow.

I know that CC companies are predatory like that, that is why i cut up the cards and froze all my accounts about 4 years ago and determined to never ever use them for any reason. The only way I would apply for a credit is to get a house or a car, for everyting else I pay in cash.