Chapter 13 Bankruptcy: a Smart Move or a Waste of Your Money and Time

While Chapter 13 bankruptcy has its place in certain emergency situations, I am more and more convinced that Chapter 13 repayment plans are likely to be a waste of your time, money and efforts.

If you did not know this already, the bankruptcy laws in the United States were written by lobbyists working on behalf of lenders and banking interests.

Credit card companies and consumer lenders want you to exist in perpetual repayment status - making minimum payments, paying late fees and regularly refinancing loans. They don't want you to default but they want to make it extremely difficult to escape recurring debt.

In most situations, Chapter 13 is designed to fail and currently fewer than one in three Chapter 13 plans actual succeed. Most fail within the first year or two, meaning that bankruptcy filer has put his life on hold and spent thousands of dollars delaying the inevitable.

In these cases a Chapter 7 liquidation could be a much better choice. #chapter7bankruptcy

Sometimes you have no choice but to file Chapter 13 if you need to stop a foreclosure or repossession. But before you sign on the dotted line have a heart to heart talk with your lawyer about whether you have a reasonable shot at sucess in this most difficult endeavor. #atlantabankruptcy

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[keithcrowe]

I just made my last Chapter 13 payment this month. Now I am waiting to hear from the trustee and my attorney on the final steps to discharge the bankruptcy. At times it was near impossible to make the payments on time and deal with issues like you stated. I am proud to be one of the 1/3 that successfully complete the bankruptcy process. No vacations in 5 years, driving old cars, rarely eating out at nice places etc.was a huge price to pay but in that time I have seen my house almost double in value and learned some valuable lessons in money management going forward. I would say that it CAN be done but not without making major changes to your lifestyle before that caused you to be in debt in the first place.

[turbozguy]

I have to disagree with his opinion on chapter 13. My monthly payments were 20% of what I was paying on credit cards and such. If you are disciplined and don't overspend it's a great option. Especially with our current economy in the US.

[deliavelasquez]

I have been on Chapter 13 for 4 years and 3 months, just 9 more months to get over this, anxiously waiting for that day. I am only paying 55% of what I owed.
I needed a new car and the trustee did not approve the loan.
It's hard, but you can pay for it.

[carmenmadrigal]

Thank you so much for the information, I will just pay my credit cards one at the time when they offer me a settlement 😊

[AfrikanLifestyle]

Great breakdown. It's enough info fir me to rule this option out.

[attorneydavidromito]

Bankruptcy is a setback, not a defeat. Hopefully, others will seek professional help from watching your videos.

[amb-yzee]

I appreciate that you are realistic as to the difficulties. Some lawyers act as if bankruptcy is so good to the point of implying everyone alive should file, even over small amounts of money.

[dartow]

I am in the last year and it can be done. Was it worth it? I don't know, if you can you should pay everybody back what is owed. Again, if you can. If you are just using the system, it doesn't matter what you do. What comes around goes around.

[dianec]

That was very helpful because the attorneys that I called regarding bankruptcy they never said anything about the failures of repayment on 13. I would like to know that I can’t seem to find an answer. How much does the debt collectors pay on your portfolio or charge-offs? I keep hearing in the terminologies they pay pennies on the dollar.

[Em_Dee_Aitch]

We did a 13, and we’re sorry we did. Now our attorney is advising we flip it to a 7 - not to mention the fact that he wants an additional 750 bucks to do so.

[bonniej]

Is it discharged from a chapter 13 is that mean you're done and you don't know anything in the house anymore or you could just walk away just like 7?

[charlessuez]

Thanks for the information. I have a question, I am filling chapter 13 because l have a judgment against me. After l filed, l informed the attorney of the person that won the case and still, 2 days after, he filed a notice to Lis Pendens. Is this legal? I am in Florida. As per my attorney, he was not supposed to do that. But, why he did it? Can the court grant him that petition? Even though l have filed Chapter 13? I believe all proceedings against me should have sopped or am l wrong? Please let me know. Thanks 😊

[moviesforrandy]

what did trump use 7 or 13? I checked in on filing 7 this week but I have more than $20.000 in property un dam real.

[DaniellaTorres-tr]

Question" Why do credit companies still report negatively after you are discharged?

[bonniej]

Is there an amount I would have to put down on my home payments with a chapter 13 upfront?

[patriciaannhenderson]

Would clearing your credit for the debt that is 7 years old help or no, while in bankruptcy ch 13

[AshantyDarling]

Will a chapter 13 save me from getting evicted if I have rental arrears I can’t pay ? Do you recommend this or just leaving the apt

[niloebrahimi]

Hello, my deceased husband took equity of home credit and also he did bankruptcy chapter 7 .
How can I weave that second mortgage.or if it is possible to convert chapter 7 to 13

[nko]

I filed Chapter 13, should of never did it! I wish people will be honest going in I agreed to a 100% plan the trustee sent 2 realtors to my home saying I had 2 much equity. Anyway I feel like doing voluntary dismissal. Selling my home getting all my money. And getting a place under my daughters name or just settling the debts myself.

[AndrewM]

Is the monthly payment on a Chapter 13 divided by what you owe ? For example, someone owes 60, 000, would that be $1, 000 per month plus legal fees for the next 5 years ?