Can You Commit?
So, the third factor in Is Chapter 13 Right for Me? Is this going to work? Or you can say, more properly, feasibility.
So, we talked about the first two factors, income. Am I over the IRS median, meaning I have to pay for five years? Am I under, meaning I can pay as little as three years, but I may need to pay more if I have to catch my house up, or a car? And the second thing we looked at, was what type of debt. Is it dischargeable at the end of this? Or if it’s not, is it getting paid in full? How much is going to be left over?
And now we’re going to look at feasibility. So, as I mentioned in the beginning, this is a big commitment. This is three to five years, 36 to 60 months, that you’re going to be making a monthly payment. Now again, it’s based on what you can pay. It should be doable. It’s not based on what you owe. Although sometimes, depending on what you’re trying to accomplish, there may be a minimum you need to pay.
But, otherwise, it’s only based on what you can pay. So, you should be able to do it. But it doesn’t leave you any room for luxury, cushions, or savings. It’s meant you’re going to put everything you have into this, and at the end of it, any debt you still have is gone.
So, the issue is, once you and I come up with a plan to propose, and say, this is what I can pay for how long, the question is, do you believe that your income is going to remain at that level, at least? You feel confident you’re going to be able to make those payments.
There are ways I always highly recommend people get their payroll person to just take the payment, Chapter 13 payment out every month, so you don’t have a choice unless you lose your job. The success rates are astronomically higher when people do that. Or there’s automatic bill pay, where you can have it taken out automatically. Again, it takes you to decide not to do it this month out of the equation. Or you can pay directly, but stats start to fall there.
The question is, can I do this? It’s okay to not be disciplined enough to do it, and you will save yourself a tremendous amount of effort and expense if you can’t do it to not do it. However, it’s a great solution. Even if you make a considerable amount of money, but find yourself in dire straits with debt, which lots of us feel that way and get there, you’ve got to be able to do it.
Again, to review, income, and the things you want to think about, is 13 right for me? Is your income, what kind of debt you’ve got, and feasibility. Am I ready to do this?
As always, you can reach me, an OKC Chapter 13 bankruptcy attorney, at edwardkelleylaw.com or call me directly at 580-478-3130.