how long does ch13 stay on record?

[swtxhouston]

What is the name of your state? Texas

I have heared that ch7 stays on our record for 10 years. My question is how long does ch13 stay on the record? Also, is ch13 as bad as ch7 on our credit?
For ch13 one has to have some income(as I learned from one senior member of the forum), but if someone has a job, say $3-4K/month, can he/she still file the ch7?

 

[Ladynred]

By law (FCRA), ALL bankruptcies can stay on your report for 10 years. However, it seems that a lot of Ch 13's drop off at the 7 year mark, provided its not dismissed. The clock starts running from the filing date (not date of discharge).

Bankruptcy, no matter which chapter, is going to wreak havoc on a credit report. Ch 7 may stay for 10 years, but as I stated before, with careful credit repair and rebuilding post-discharge, the impact lessens over time. One can get an FHA mortgage after 2 years of perfect credit. There are UNsecured credit cards to be had after 2 or 3 years. Some creditors, like AMEX, keep a blacklist. If you don't ever pay them, its unlikely they'll ever give you another of their cards.

As for Ch 7 and income - its not what you EARN, its what you have LEFT after paying all your NORMAL living expenses. If you have less than $100 of disposable income after expenses, then its likely you'll get a Ch 7. Secured debts, such as mortgage and car loans go into that 'normal' expense category.

 

[swtxhouston]

With Ch13, does the interest rate on Credit Cards go away? Does court make it 0%? Currently I am paying around 25% apr on each card.
Also, How do you define disposable income?
Say my salary after taxes is $3000. $1000 goes to rent and utilities, $500 food and clothing, $1500 left for credit card payments. So how will disposable income be calculated for ch7?
Like out of $1500, if I just pay the minimum payments to my credit cards, then after paying minimum payments, I might have $200 left in my pocket. Can I qualify for ch7 then?

 

[Ladynred]

Your normal living expenses are FAR more than rent, utilities, phone, electric, and cable. Think about it .. what do you NORMALLY spend money on consistently ?? The list of acceptable 'normal' expenses is actually a pretty long list.

Here's a site with a good list of expenses:

http://www.ca-bankruptcy-attorneys.com/calculators/expense_calculator.html

Now.. if, after all that, you have, say, $500 a month left over, you're going to be looking at a Ch 13 - you could pay at least some percentage of your debt over a 3-5 year period. If you're left with less than $100 in your pocket, then Ch 7 is more likely.
$200 a month wouldn't be unreasonable if your debt load was way more than you'd ever pay off at least 25% of it in 5 years, so there is some calculations to be made.

The whole point, for Ch 7, is that you don't have enough money to pay credit cards AT ALL.

When you file for BK, any chapter, 99% of the time the credit card companies are going to close your accounts - period. In Ch 13, you may be paying back either a percentage of unsecured debt or you may end up paying it at 100%. I don't believe they can add ANYTHING to the debt once you include it in BK.

 

[bgate]

Just a FYI...there are companies out there that do credit repair, who are also able to 'wipe' the BK off your credit report as if you never filed. Of course, it's recorded though the court house, but can be cleaned on your report.

 

[Ladynred]

Yes.. and its likely to come back too ! There is NO reason to PAY some company to clean your credit report. They have no magic methods and they do NOTHING that you cannot do yourself.. and for next to NOTHING !

 

[HRG]

curious...

I've heard of credit repair companies that do this as well.

Lanynred...where would one find the info to do this themselves?

 

[Ladynred]

Check out www.creditboards.com - the 'veterans' of credit repair are there.