My friend basically went to a lawyer and that guy had him give him a very detailed list of all his debt and expenses. He then told my friend that he thought chapter 13 was the better choice for him. They filed then he had a meeting with all the creditors and they hashed out who was willing to take how much. Once all that was settled he had to appear in court once just to say to the judge that he agreed with the arrangement. I think the whole thing took him about two months.

One thing to keep in mind and this may have changed since he did it. When he met with the creditors they had the option of taking back their property (like his car) and I think if he had any other assets that were paid for and unsecured they could get those too. He didn't so it didn't matter, but if you own other things of value you may end up having to fight to keep them.

Chapter 13 payments are based on your income.

If your income is above the median for your area, you'll probably have to file a 13.

Based on the size of your family, the IRS has a table that lays out what the average expenses are in your area for rent, food, electricity, etc.
Everything else you make above that number (based on your income for the past 6 months) goes directly to the bankruptcy court.

You're allowed to keep 1 car. All of your savings accounts will be seized. If you have a safe deposit box, you'll have to let the judge examine the contents. Retirement accounts are exempt, but any contributions made in the past year aren't. Any charges or debts incurred in the past 3 months are non dischargeable.

If you're caught lying to the court, about anything, on any form, in any fashion, you will go to jail.

It's not an easy way out for people who don't feel like paying. It's just a way out for people who have no other way.

There are tons of safeguards in place to keep people from abusing the system. That's why I get so irritated with people who talk the way Woj was talking earlier about how it's just a bunch of deadbeats taking the easy way out.

It's far from that.

I think i make too much money to do bankruptcy.
I need to figure out a way to ditch these medical bills somehow.

Credicards have always been easy for me. I could always pay them or tell them to screw off and settle.

But the Health Insurance Companies wow. These guys are the fucking Devil.
I feel like I should be in a Michael Moore Movie.

Damn. This doesnt sound like a path for me. The jail thing kinda makes me nervous. And the looking deep into personal accounts or streams isnt a good idea either.

Im kinda stuck in the middle here. I mean ill pay these fuckers. But I shit you not ive never been so angry... I really want to fuck these guys over somehow.

I think people file chapter 13 because they THINK credit card companies will come take your house.

A girl I dated a while ago in college, her parents filed bankruptcy. they never had to pay off any credit cards they had and they continued to live in their house but their monthly payment was a LOT less. I asked her one time why they did it and she said the just consumed to much debt and could not make the payments and their interest on their mortgage was like 12% OUCH!

after the bankruptcy they somehow got a lower rate for their house like 7 or 8%. i have no clue how or what they did, but somehow was better than walking away from debts

Title is DELIBERTLY misleading

75% Surge in Personal Bankruptcies

instead of 75% Surge in Personal Bankruptcies in southern California.

of course that title wouldn't get the OP the attention he was wanting.

Also stats can misleading. If you have 1000 people and 4 go bankrupt then the next year 7 of those 1000 go bankrupt you just had a 75% increase in bankruptcies. Even though 7 out of a 1000 is very small amount, but it doesn't get headlines.

Yup easy way out of responsibilities.

Where can I signup!

Anal Hobbit please help us! Where is our hero when we need him?

I doubt that is true because you need an attorney to file bankruptcy, and once you speak with one, you'll know what your rights are and what the creditors can and cannot do.

Sometimes a lender will renegotiate a mortgage in bankruptcy if they think they'll come out better in the long run than they would if they foreclosed. (They won't renegotiate principle, but they will adjust interest rates and loan terms)

All this thread proves is that woj was right, and poor planning is the real cause of most financial problems.

I'm reading descriptions like "family of four with a house, a couple of cars" and how a medical bill will destroy them... If you can't afford health insurance then why do you have two cars? Why did you have two kids to begin with if you couldn't afford them and had to "live on the edge"?

The fact is, the average american lives beyond their means. Having your bills paid at the end of the month with no substantial savings is not living within your means, I'm sorry. Most people don't need 80% of the shit they buy, and are irresponsible spenders. Most people can't afford the 2nd or 3rd kid they had.

Hell, the 50% divorce rate is fucked up enough as is. I don't understand how a couple can get married, lock themselves 50/50 into something as big as a house, and then get a divorce a few years later.

The lack of personal responsibility and common sense in the world blows my mind.

While some of what you said is true.....the vast majority of the people filing bankruptcy over medical bills are people WITH insurance.
The problem they had was the insurance company didn't pay their bill. Happens all the time.

You're kind of cherry picking scenarios in order to suit your views. Things like
You obviously haven't been following the discussion or doing any research on this topic or you wouldn't say things like that. (If both parents work, which is normal, then they have to have 2 cars in order to get to work. It's not like one of the cars is a Miata for weekend beach cruising)

However, if, like Woj, you feel like you need to be morally superior to people who have had money problems, then far be it from me to ruin that for you.
Stick that nose in the air and enjoy it. (and hope that you never lose a job, have a medical emergency that isn't covered by your insurance, get injured and become unable to work for an extended period, get screwed over by a business partner, catch your wife in bed with another man after you've bought a house together....because then you'll have to stay with her and watch her fuck the other dude, in order to be financially responsible and all, or have a car accident and be sued for damages larger than your insurance limits. As long as none of those or dozens of other things happen to you, you can take pride in the fact that you're better than all of these "deadbeats")

Speaking of those "deadbeats", I wonder how many of these bankruptcy filings are people who worked for GM and Chrysler or the State of California?
Those fucking losers....didn't they know 5 years ago when they had their 3rd kid that they would lose their jobs and health insurance in 2009?

Fucking idiots.

Shit happens, survival of the fittest, fate favors the prepared.

What do you want me to say? If any of the things you listed off happens, I will be able to handle it without passing my responsibility onto the government. A lot of people can't say the same. Is that their fault or not?

Americans are the most retarded people by far, it's no wonder so many of them are broke right now and eating three meals a day from the dollar menu.

What the hell is being passed on to the government?

Sorry, I guess I didn't mean the government... I was in the middle of another argument about welfare and shit like that with someone else. Bankruptcy debt doesn't just go away though, we all pay for it.

While I will strongly agree with you that many people live outside their means and spend every penny they earn medical bills and insurance are two separate things. What about what Boneprone says? His daughter had medical problems and the bill was 378K and the insurance decided no to pay. That is a lot more common than people know. There are many people who get injured or sick and accumulate a lot of medical bills then the insurance doesn't pay them and you are screwed.

Take the average family in this country. That means they have 2 adults and 2 kids and they have an average annual income of 50K pre-tax. So if they live in an average house and don't drive any kind of fancy cars and they live well within their means and put 10% of their income away each year in savings so they are doing well by most people's standards. If you drop 100-150K in medical bill debt on them they would be in trouble. They might be able to pay it off over time, but there would most likely be wage garnishments and all kinds of financial troubles.

Everyday in this country insurance companies deny claims. If you are denied you have two choices. You can either just pay the bill yourself or you can hire a lawyer to fight the insurance company. If the medical problem has strapped you financially to begin with you probably can't afford the lawyer.

In theory yes, but in practice no.

Creditors are going to charge the highest rate the market will allow, regardless of the default rate.

If bankruptcies were going down, they wouldn't lower rates across the board, they'd just pad their profits.

BTW, I could also handle those things happening to me without having to do the BK dance, so could alot of people....but that doesn't mean I don't have any empathy for people who are in over their heads because they lost a job or had a medical problem.

Sure, there are deadbeats and losers who game and take advantage of the system, but lumping everyone into the same category is like saying all black people are criminals and drug dealers. :2 cents:

BTW, can you guess what all of these people had in common?

Walt Disney
William C. Durant (founder of GM)
PT Barnum
Ulysses S. Grant
Milton Snavely Hershey
Abraham Lincoln
Thomas Paine
Rembrandt
Donald Trump
Mark Twain
Oscar Wilde
Henry Ford
HJ Heinz

This is all very true.

It's easy for someone who has been successful and has alot of cash in the bank to look down their nose at the average middle class guy who can't seem to get ahead.
Everyone wants to blame people living beyond their means etc....and in certain cases that's true, but for the vast majority of the middle class it's not.

If you're really interested in this subject (I was) do a google or youtube search for Elizabeth Warren. She's a harvard economics professor who has done alot of research on bankruptcy and the middle class.

This whole "people are irresponsible" line is propaganda that's been generated by the banks and credit card companies. They take the most egregious cases of irresponsibility and try to make the public believe that everyone in bankruptcy behaved that way. That's how they were able to get congress to pass bankruptcy reform....which put alot more money in their pockets.

quoted for truth

I think a lot of it isn't that a person can't get ahead, it is also that there are certain situations where personality comes into play.

If there are not people who are willing to work for companies then there are no companies. Everyone can't be self employed. If you make over 250K a year you are in the top 5% of wage earners in this country. It isn't that the other 95% are lazy and don't want to work, it is simply that capitalism is a pyramid. The more you make and the higher up you go the less opportunity exists. Those that do make the climb and understand it and are willing to do the risk and take the chances can grow. But most people are not wired that way. I have a good friend who makes a nice living at his job. He is very smart and the work he does for this company is in demand. He could probably make about 3-5 times as much if he started his own company. But he doesn't because he has two kids and one of them has a few minor health problems. He can't be without insurance and buying health insurance for a kid with a pre-existing condition is something that is almost impossible to do. So he stays at his job. They won't let him freelance on the side. In about five years his kid will be 18. If she goes to college he will still be able to cover her on his insurance. If not she will have to get a job and get her own. When that happens he is going to leave his company and work for himself because he can then afford the risk. In the meantime he is doing pretty good, but if a 200K medical bill fell on him he would be in some pretty dire straits. There are a lot of people out there who either can't strike out on their own, are not willing to take the risk, or just don't know how to do it.

I'm not for a second saying there are not people who take advantage of the system, but there are many people out there who have regular jobs and live within their means and they rely on things like car insurance, home owners insurance and health insurance to cover them in case of emergency. When those insurances don't work as planned things go south really fast.

It's not that simple.

First, not all debts can be discharged via bankruptcy--many govt loans, most student loans, etc cannot be discharged.

Second, yes, a bankruptcy court can compel a sale of your assets however there are limits as to which assets can be sold.

There does come a time when a person gets used to being in debt, too, and stops caring. What is the point of trying to pay back something you'll never be able to pay? Just "rent" the house or car until it's repossessed because your payments stopped. People do strange things just to get by day-to-day.

You obviously have not been on this planet very long. I've known nearly half a dozen people that have gotten sick and were unable to work and thus lost everything. One couple payed on their house for almost 20 years and lost it because he got cancer, HAD HEALTH INSURANCE, but the insurance company stopped paying for his treatment and ended up over 100k in medical bills. They obviously could afford kids when they had them, would you like to tell them their situation was due to poor planning and they shouldnt have had kids?

You forgot the founder of Macys, he went bankrupt a few times before hitting it with Macys. People dont realize a few misfires in a row and they become one of those people .

also watch this snake doctor talked about this. It really cuts threw the bullshit.
https://youtube.com/watch?v=akVL7QY0S8A