Discharge of Chapter 13

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Ifixyawata

Ifixyawata

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NE Ohio
Hey all,

Sort of have mixed feelings today as we're officially done with chapter 13 bankruptcy, glad that it's done, not sure that it was the best option for our financial situation but we didn't have a great attorney and what's done is done.

I had/have a large amount of student loan debt as well as I did have about 5 credit cards, all maxed out and unpaid for a couple years prior to the start of the ch13. A couple of the student loans were private loans, consigned by my mother, the others were a mix of subsidized and unsubsidized Stafford loans.

Debt collections up to and including wage garnishment is what finally pushed me into bankruptcy. At this point I'm unsure as what to do next.

Is loan consolidation always a bad thing? I have several separate loans and making several payments a month may be an unnecessary headache.

How long before creditors start seeking wage garnishment again? I hope I'll have a little bit of time to get payments set up before they start forcibly taking it again.
 
Yes, the repayment plan is complete, I'm gathering, the trustee sent us a small refund and a letter stating that we needed to cash the check soon in order to close our case.
 
Not sure how it works in the US, but typically until whatever payment schedule the courts approved is finished, you are still an "undischarged bankrupt" and getting loans won't be easy. Once discharged you can do whatever your credit score allows. It's common for you to start receiving predatory Credit Card "pre-approved" letters in the mail, sometimes before and guaranteed immediately after you are discharged. Be very careful there, as age of credit affects your score, so your first "new" credit card you should keep forever. Choose wisely.

Again, might be different in the US, but in Canada they can't attach tax refunds, and CCRA won't disclose any tax information (including tax owing) to a creditor or a Credit Report. You can voluntarily provide that information, but you shouldn't unless there is nothing to see. If the tax authorities are forced to go to court, that is public information, so don't screw with the IRS is my advice.
 
Originally Posted By: Ifixyawata
Debt collections up to and including wage garnishment is what finally pushed me into bankruptcy....... How long before creditors start seeking wage garnishment again?


Didn't your attorney explain any of this to you? These seem like the most basic of questions to ask involving a bankruptcy.
 
If you still have debt that you can't repay, why didn't you file chapter 11? Bankruptcy is Bankruptcy, it looks the same on your credit report but Chapter 11 wipes out all debt.

We filed Chapter 11 back in 2014 when I took a 25% pay cut and lost bonuses and the wife was laid off in the same month. We tried for awhile but it just wasn't working. Fast forward to 2017, we just bought a new home in Florida, credit scores are already around 700 again and life is back on track for the most part.
 
Originally Posted By: billt460
Didn't your attorney explain any of this to you? These seem like the most basic of questions to ask involving a bankruptcy.

My attorney was not the greatest and was not much help. He started and then basically cancelled our first bankruptcy because he didn't have his stuff together.

Originally Posted By: racin4ds
If you still have debt that you can't repay, why didn't you file chapter 11? Bankruptcy is Bankruptcy, it looks the same on your credit report but Chapter 11 wipes out all debt.

We filed Chapter 11 back in 2014 when I took a 25% pay cut and lost bonuses and the wife was laid off in the same month. We tried for awhile but it just wasn't working. Fast forward to 2017, we just bought a new home in Florida, credit scores are already around 700 again and life is back on track for the most part.

I have a large amount of student loan debt and student loan debt is not dismissable at all, I don't think.
 
Originally Posted By: Ifixyawata
I have a large amount of student loan debt and student loan debt is not dismissable at all, I don't think.


There is a lot of debt that cannot be dismissed any longer. Since George Bush signed the Bankruptcy Reform Act into law in April of 2005. Before that bankruptcy was insanely easy to file, and debt was far too easy to walk away from. I had a co worker back in 2002 who had a bad gambling problem. He managed to ring up over $44,000.00 in credit card debt through cash advances at gambling casinos over a long period of time.

He filed for bankruptcy and got every cent of it dismissed. He couldn't believe it. He told me he had to ask the judge to be sure. The judge told him that the debt was totally erased, and he did not have to pay any of it back. Furthermore, if his creditors, (Visa and MasterCard), kept pursuing him for the money, they could get into legal trouble. That kind of financial foolishness is insane. And it's for the good of everyone it was finally stopped.

We the people have to pay for this kind of irresponsible nonsense, one way or the other. Most of these personal bankruptcy's could have been prevented with a little common sense, and proper budgeting and money management. While there are some legitimate cases that happen due to bad health, or severe injury preventing the individual from applying his or her craft, they are in the minority. And the laws lean to their favor. No one should be punished because of bad health, or personal injury that came at the hand of someone else.

But for these people who like to be careless with money and over spend, then go running into court in an attempt to get their financial responsibilities erased, they are going to find it's not so easy. And it will come back to haunt you in your financial future. Much like a DUI or too many accidents and tickets will kill you on your car insurance premiums. And rightfully so. People should not have to pay for the mistakes of others.
 
Originally Posted By: Mr Nice
How much student debt do you have ?

Around $50k in Stafford Loans and another $30k in private loans.

And, for the record, I'm not trying to evade my responsibilities, though I did make bad financial decisions earlier in life. We have been making monthly payments for the past nearly 5 years every month in a repayment plan. I just needed to get garnishment stopped and to have some breathing room before repayment of my student loans started. I'm in a better position now to start repayment.
 
I don't meant to come off rude but this $80K in school loans was for what degree? I take it you aren't making anywhere near the salary you thought you'd make to repay them?

I've seen this personally happen to family and friends so many times... folks please research and chose a career path/degree with a decent salary!!! I have multiple family and friends that went to college, got a useless degree, get out and can't make more than $10-11 per hour and then complain about the $50k in student loans and debt they are faced with!

I elected not to go to college, found out two weeks before headed out to WVU that my folks were struggling and couldn't get the loans so I bailed. No student loans and I make double and triple of what many of my friends make with degrees... choose wisely folks and parents teach your kids common sense when it comes to this!
 
The worst part of my college loan debt is that I didn't finish college. I was about 3/4 of the way to a degree. I never wanted to go to college, at least not right away, but I was pressured by my parents and as such, hated every minute of it. I ended up with a decent job that has nothing to do with what was going to be an IT degree.

It also didn't help that I always borrowed the maximum loan amount each time. Financial aid 'counselors' were always very encouraging to tell me to borrow the max. Why wouldn't they be?
 
Last edited:
Originally Posted By: billt460
Originally Posted By: Ifixyawata
I have a large amount of student loan debt and student loan debt is not dismissable at all, I don't think.


There is a lot of debt that cannot be dismissed any longer. Since George Bush signed the Bankruptcy Reform Act into law in April of 2005. Before that bankruptcy was insanely easy to file, and debt was far too easy to walk away from. I had a co worker back in 2002 who had a bad gambling problem. He managed to ring up over $44,000.00 in credit card debt through cash advances at gambling casinos over a long period of time.

He filed for bankruptcy and got every cent of it dismissed. He couldn't believe it. He told me he had to ask the judge to be sure. The judge told him that the debt was totally erased, and he did not have to pay any of it back. Furthermore, if his creditors, (Visa and MasterCard), kept pursuing him for the money, they could get into legal trouble. That kind of financial foolishness is insane. And it's for the good of everyone it was finally stopped.

We the people have to pay for this kind of irresponsible nonsense, one way or the other. Most of these personal bankruptcy's could have been prevented with a little common sense, and proper budgeting and money management. While there are some legitimate cases that happen due to bad health, or severe injury preventing the individual from applying his or her craft, they are in the minority. And the laws lean to their favor. No one should be punished because of bad health, or personal injury that came at the hand of someone else.

But for these people who like to be careless with money and over spend, then go running into court in an attempt to get their financial responsibilities erased, they are going to find it's not so easy. And it will come back to haunt you in your financial future. Much like a DUI or too many accidents and tickets will kill you on your car insurance premiums. And rightfully so. People should not have to pay for the mistakes of others.



Speaking of Bush, just two years after he signed the Bankruptcy Act into law, there was the financial meltdown. Here's what that did to people like me: it put me out of business (I had a vintage automobile parts business for 25 years). After the economy collapsed, the phone stopped ringing and my income when out the window. Being I wasn't rich, the Bush tax cuts didn't help. Yet, he was always harping on how much he was doing for for small business owners (nothing really). Fortunately, my wife was still employed at a local university.

So, after 30 years of perfect credit scores and never missing a single payment (or being late on any of our loans), the credit card companies punished us by jacking up our credit card interest rates which put us over the edge. Wallstreet and the banking industry socked it to people like my wife and I for their mistakes in the financial markets.

So here is the good news about our Chapter 13, which has a few months to go. We have a nice nest egg now that we booted the credit card companies and bankers out of our lives. When we went to a few dealerships recently inquiring about a new vehicle, it burned them up that we would be paying cash, and not needing one of their rip-off loans. And speaking of rip-offs, do you know what our insurance company did during our bankruptcy? They jacked up our insurance rates dramatically, even though we have perfect driving records. They claim the price increase is do to people in bankruptcy being untrustworthy! LOL, I guess the current President has to pay higher insurance premiums just like my wife and I do!
 
Last edited:
Originally Posted By: Rumble
Speaking of Bush, just two years after he signed the Bankruptcy Act into law, there was the financial meltdown.


Most of the 2007-2008 financial collapse had nothing to do with making bankruptcy tougher to file for. The bulk of that mess was brought on by people who over borrowed on home mortgages, in order to over pay for houses that were worth nowhere near what they were buying them for. The result was a real estate market that had no real value, and was full of paper and collapsed on itself. The same thing happened to the stock market in 1929. You had a bunch of people involved in a market, that they had no business being involved with in the first place.

The difference is the stock market learned from it's mistake. The real estate market didn't learn a thing. Today they're right back to over borrowing.
 
When millions of folks are allowed to put zero down on a house they can't afford with an adjustable rate mortgage... it was a recipe for disaster. Don't forget all the bankers, mortgage brokers and realtors selling and approving loans they knew would go into foreclosure.

Yes, insurance companies can use your bad credit rating to jack up your rates even if you have a clean driving record.
 
Originally Posted By: billt460
Originally Posted By: Rumble
Speaking of Bush, just two years after he signed the Bankruptcy Act into law, there was the financial meltdown.


Most of the 2007-2008 financial collapse had nothing to do with making bankruptcy tougher to file for. The bulk of that mess was brought on by people who over borrowed on home mortgages, in order to over pay for houses that were worth nowhere near what they were buying them for. The result was a real estate market that had no real value, and was full of paper and collapsed on itself. The same thing happened to the stock market in 1929. You had a bunch of people involved in a market, that they had no business being involved with in the first place.

The difference is the stock market learned from it's mistake. The real estate market didn't learn a thing. Today they're right back to over borrowing.


I wasn't implying the Bankruptcy Act brought on the financial collapse, just that the collapse came about a few years later. The intent of my post was more about bankruptcy not always being about people living beyond their means.

I agree that the real estate/housing market (and banking industry) was out of hand at the time (and maybe still is?). I see some of the regulations are being rolled back now by the powers that be. Maybe another collapse is on the horizon. Which, will bring about even more bankruptcies.
 
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