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Hello, I met with an attorney in Arkansas for a chapter 13

filing. After looking over all...
Hello, I met with an attorney in Arkansas for a chapter 13 filing. After looking over all my debts, which are all just credit card debts only, he suggested I just stop paying. IF they decide to sue, then we will file. ( I have all the paperwork ready to go). My question is, I OWN my home ( value about $200,000). Should I go on and file the chapter 13 to avoid worrying for the five years that the credit card companies may put a lien on my home?
Also, one reason I haven't filed is he said I would have to pay back approx. $200 to the trustee each month. That will be a hardship since I am a diabled widow with only an income of 1500 a mo on soc security. WHY is the amt to pay back each month so high? Thank you.
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Answered in 40 minutes by:
7/2/2013
Roger
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31,796
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney. Thanks for your question.

You likely do have time to file bankruptcy if and when one of these creditors comes after you because BEFORE the creditors can try to place a lien against your property, it must first sue and take a judgment against you.

Thus, once you are sued, you would have time to file before a judgment could be obtained.

As for the trustee's fee, that is set by the bankruptcy code, and is going to be applied to every payment made under the plan - so there's really no getting around that fee.

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Customer reply replied 4 years ago


Hello,


Yes, I know I have to repay. My question is why is it so much each mo to pay back? at first I was told it would be $100, now its over $200 if I file chapter 13. I feel I am being "punished" for owning my home!


Also, still do not know IF I should file to not have to worry about a lien going against my home the next 5 yrs.? HOW OFTEN DO CREDIT CARD COMPANIES ACTUALLY SUE? thanks

Good morning!

 

The compensation to the trustee is part of the plan payment you make every month. Under the bankruptcy code, 10% is the maximum percentage of any plan payment that can be used for Chapter 13 trustee compensation.

 

The monthly repayment amount is based on the amount of your debt, and how much must be paid over the next 5 years (maximum term for a 13). Thus, the amount of your trustee's fee is going to be 10% of your monthly repayment amount. So, the amount of your debt determines the trustee's fee.

 

As for whether to go ahead and file, that's really up to you and how you want to deal with the matter. If you want to go ahead and file for peace of mind, then that certainly can be done. BUT, if you want to hold off and see whether or not a creditor actually comes after/sues you, then you can do that as well.

 

The lender CANNOT file a lien against your home UNTIL after it obtains a judgment. In order to obtain a judgment, the lender must first sue you. So, if you are sued, you have at least 20-30 days to file a response; before your response is due, you can file chapter 13 and stop the lawsuit. Thus, you have time to wait and see if you're going to be sued BEFORE filing.

 

As for the frequency of creditors suing, it is much higher than in decades past because of the bad economy. Thus, you can expect to be sued be these credit card companies at some point. Because of that, you may just want to go ahead and file and avoid being sued, etc.

 

If you don't feel comfortable waiting, you should discuss that with your attorney.

Roger
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Category: Bankruptcy Law
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Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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