Re: Wage Earner Plan CONFUSSION

Posted by LadynRed (199.91.33.254) on October 14, 2002 at 12:17:07:

In Reply to: Wage Earner Plan CONFUSSION posted by OMAR on October 12, 2002 at 17:14:01:

The Wage Earner Plan is a Chapter 13 where a plan is drawn up and you pay back some percentage of your debts over a 3-5 year period.

I don't know what you're talking about with the arbitration thing, where did you get that ? With every BK, 13 or 7, there is a 341 meeting, also called a 'meeting of creditors'. MOST creditors never show up, but it is part of the procedure that allows a creditor to ask you for reaffirmation, return of the property, and, I THINK, to dispute your bankruptcy filing. If a creditor does not show up at the 341, and hardly any of them EVER show up except Sears, and perhaps BestBuy and Circuit City, has no real bearing on whether or not a debt is eventually discharged (wiped out). Unless they are disputing and it goes through, the BK proceeds anyway. If in CH 7, the debts are discharged after 3-4 months, in a CH 13, you get your discharge when the 3-5 yr plan is completed. Generally, unsecured creditors get no more in a 13 then they would in a 7, which is usually ZERO, but in some cases they get a percentage of the total paid back in the plan.

Once you file for BK, an automatic stay goes into place, stopping ALL collection activities. As for your credit rating immediately improving, that's a fantasy. Your credit rating will be in the sewer for a while no matter what, but a 13 will drop off your credit report after 7 years, where a Ch 7 remains for 10.

Ch 13 is much more restrictive while you're in the plan.. you live on bare bones cash while you're paying the trustee. The 'long term damage' is no greater than a Ch 7, unless you consider being forced to live on bare minimum cash 'damage'. A large percentage of Ch 13 plans are either dismissed because people can't make payments or they are converted to Ch. 7's. Wage Earner (Ch 13) is usually forced on people who have a lot of assets to protect or who have a LOT of disposable income.

Hope this helps.

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