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Bankruptcy Case Dismissed, Now What? Debt Settlement Isn’t for Us I Think. – Gary

Back in August my wife and I spoke to a lawyer regarding filing for bankruptcy. We had barely maintained our heads above water regarding our debt. The majority of our debt is unsecured (approx $40k) in credit cards.

Our lawyer told us to file chapter 7 even though our income was above the initial means test. When we received the paperwork, given all steps of the Means test, we did fail within the limits.

We had our creditors meeting and all went well until we received a letter from the Trustee of “Abuse” on our chapter 7.

Our lawyer explained is as we had too much disposable income because we were surrendering 1 vehicle in the chapter 7.

Our lawyer then spoke to the trustee to see if we were to keep the vehicle if we would qualify for the chapter 7.

The response was the same, our case is going to be dismissed.

We have a meeting with our lawyer in the morning so discuss converting to chapter 13. Our lawyer isnt optomistic about this working for us, so now since we havent been paying on most of the debt (outside of the mortgage) and when the case is dismissed, all the late payments, skyrocketing interest rates all come back and there isnt any way for us to ever catch up.

I dont think we could use a debt settlement company even if thats the route we wanted to take. We just don’t see any options at this point and need a direction desperately.

Gary

READ  Our Chapter 13 Bankruptcy Was Dismissed. What Happens Now? - Kim



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3 Comments

  • Gary,

    I’m not sure how the meeting with the lawyer went, but if your only option is a chapter 13 you may want to take a closer look into the debt settlement approach. If done right, debt settlement can be a great alternative to a chapter 13 bankruptcy, especially if you can accumulate the funds to settle with quickly.

    I can completely undertstand your uneasiness with hiring a debt settlement company, but if you shop around there are some really great performance based and DIY settlement programs out there, that are proven to be very effective. It all depends on the amount of involvement or lack of involvement that you prefer.

    By far the two best DIY programs out there that I know of are either Consumer Recovery Network (Michael from CRN is the other gentleman that commented here) or Zip Debt. Both of these companies can teach you exactly how to get through this from A-Z (without gouging you with fees) and I would highly recommend that you call either (or even both) of them if you find that the chapter 7 is a no-go.

    Good Luck!

    – Andy

  • Hi Gary,

    What amount of money can you consistently apply to the debt monthly?

    Why did your attorney express skepticism about chapter 13? What were his/her concerns?

  • Hi Gary,

    What amount of money can you consistently apply to the debt monthly?

    Why did your attorney express skepticism about chapter 13? What were his/her concerns?

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