Re: Re: Thoughts on Chapter 13--Was it worth it?

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Posted by: Jim on 10/25/06:

In Reply to: Re: Thoughts on Chapter 13--Was it worth it? posted by: Matt on October 24, 2006 at 23:56:38:

We completed a 42 month plan in December last year. I wish we had filed even earlier. Yes, the trustee has control over your finances for the plan period, but it forces you to budget and live within your means. Matt is correct in that you must learn to live within your means. It was a tough 42 months at times, but we made it through. We have continued to live within the budget set with our plan, and have put each month the money we paid the trustee into the bank. It is a huge relief to have no debt other than our mortgage. We have saved enough to cover one year of mortgage payments, and to buy a decent used car, if needed. Now we will start to pay extra on our mortgage to pay that off early. We do have a couple of credit cards, and use them mainly for gas and small purchases to build our credit, but pay off in full each month to avoid any finance charges.

We now think twice about what we really need to buy. We continue to shop at thrift stores for clothing. Recently, my wife found 4 pairs of SAS shoes, in her size, like new for $1.50 per pair. These new are $130. pair. I buy needed furniture or appliances at auctions or yard sales. Our cars are 10 yeas old and 8 years old, but we keep up with maintenance and repairs, when needed. Much less expensive then new car, for insurance, taxes, etc. Would I like a better car, yes. Will I buy another car, not until repairs reach a point that it is no longer cheaper than buying a newer car.

When we filed, we were not behind in any debt, but had two car payments, a mortgage, and $89K in CC debt. The CC debt was mainly from an unexpected medical charge when my son became ill with meningitis in 94. I had started a new job, thought I was covered with medical insurance, but found out it was not in effect for 30 days. I had already declined Cobra in writing, and he became ill almost overnight 12 days into the 30 day waiting period. Ended up with over $90K in medical bills. Put charges on Cards, and tried for 7 years to pay. After 7 years, we had only paid off $10K. We filed BK 13, which eliminated all interest costs. We paid back $70K on cards and both cars paid off in plan, and had the rest discharged.

In retrospect, we probably could have paid this amount down quicker if we had made a real concerted effort to budget and be more conservative in our spending. Living for 42 months on a BK 13 plan taught us how to budget, live within our means, and I am grateful for the ability to learn from the experience, and to out from under such a huge debt load.


: I filed Ch. 13 a little of 2 years ago and really kind of regret it. For me, it was the easy way out. I just recently started listening to this guy on the radio - Dave Ramsey. He has a website - www.daveramsey.com. Check it out. It may help you turn things around without having to file. Remember when you file Ch. 13 the court system is basically in control of your financial life for the entire length of the plan. Filing Ch. 13 may solve your current debt payments but it won't change the way you think about credit. Finances are 80% behavior and 20% knowledge. You have to change the way you spend your money. If you were like me you had to much month at the end of your money. Good luck to you and God bless.


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