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Chapter 13 - questions

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txdogmom

Member
What is the name of your state (only U.S. law)? Texas

I've talked to 2 different lawyers about ch, 13 and have gotten conflicting advice. I have about $30k of credit card debt that I got due to long-term unemployment. Been trying to pay it off but at 30% interest, it's impossible.

1 - Cash on hand: one lawyer said they (trustee) won't touch any money you might have saved; the other lawyer said they can take it all. I had about $8k in cash that I've saved as an emergency fund because I saw this coming. Since I've started down this road to bankruptcy, I've been using that money to help pay bills. Both lawyers advise keeping almost no cash in my checking and savings accounts. Can they take what little cash I might have?

2 - Once on a repayment plan, can I keep a savings account? I'm looking to create a budget and if I budget say $50 a month for car repair but don't use it that month, am I allowed to put it into a savings account? It looks like the plan is to use all my money to pay an estimated budget and any money left over pays back the creditors. There is nothing in this plan to force a person to have some sort of savings. Doesn't that just set you up for trouble if you don't have any savings?

3 - Am I allowed to have any credit during this repayment? If not what do I do for an emergency? If my dog needs emergency vet care, if i need a crown or have an accident or my car needs repair- what do I do? Am i supposed to let the dog die, forgo medical care, be unable to work because my car is non-functional until the lawyer can contact the court to ask for permission to have credit?

4 - If I could get/keep a store card, can I buy something on it and pay it back during the same month to try to rebuild my credit during the payback period? Lawyer #1 says yes, I can charge things as long as I pay it off the same month; lawyer #2 says no way.
 


bigun

Senior Member
Why do you want to file a CHapter 13? Tx. has some very generous exemptions plus, you're also allowed to use Fed. exemptions in Tx. that has a +$10K wildcard exemption. File your 7 and be done with it.
 

txdogmom

Member
Why do you want to file a CHapter 13? Tx. has some very generous exemptions plus, you're also allowed to use Fed. exemptions in Tx. that has a +$10K wildcard exemption. File your 7 and be done with it.
I've been told I exceed the means test so ch 7 is not possible.
 

bigun

Senior Member
I've been told I exceed the means test so ch 7 is not possible.
The means test is just step 1. You still must fill out schedules I and J to determine if you have enough monthly disposable income to fund a Chapter 13. MAny over median filers end up in a Chapter 7 for this reason.
I'd suggest you interview some more lawyers or go back to the 2 you've already spoken too and ask some more questions.
 

bigun

Senior Member
I rarely suggest this course of action but, since you apparently have a good job and a cash cushion you might want to contact this group and see if they can get your lenders to lower the rate on those cards.
www.nfcc.org
 

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