Want to See How a Chapter 13 Works? Read an Interview with a Raleigh Bankruptcy Filer Skip to main content

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Want to See How a Chapter 13 Works? Read an Interview with a Raleigh Bankruptcy Filer


Interview with a client

Interview with a Chapter 13 Raleigh bankruptcy client

If you're struggling with debt and have fallen behind on your car loan, mortgage and other bills, you are likely wondering how to get out of the financial mess you're in. For many people, bankruptcy may be a viable solution. There are two main types of bankruptcy that consumers file – Chapter 7 or Chapter 13. Many of our clients don't come in knowing the difference between these two or which one will better meet their needs. Simply, Chapter 7 is for those with a lot of unsecured debt that want these debts wiped out.

Chapter 13 is preferable for those that are trying to keep a house and/or vehicle when they are behind on payments, but are earning a decent wage. Today, we share an interview with one of our Raleigh bankruptcy filers who opted for Chapter 13 to help you understand the process. Chris (not his real name) is one of our clients who came to us a few years ago and recently completed his repayment plan. We've changed his identifying information, but the debt information and other details are true.

Question: What brought you into our office for your initial bankruptcy appointment?

Chris: I had just received a notification of intent to foreclose by my mortgage lender. We had fallen about eight months behind on our mortgage payments and two months behind on one car loan and one month on the other. I was stressed out thinking we were going to lose our home and cars and have nowhere to live and no way to drive to work.

Question: Can you share what caused you to fall behind on your bills?

Chris: I had lost my job and spent six months searching for a new one before I landed a job that paid enough and was in my field. Four months into my job search, my wife was downsized and was also out of work. It took her three months to find a new job. My unemployment wasn't near enough to pay our bills, so we drained our savings. Then we had to stop paying our credit card bills and then our mortgage and car loans.

Question: How were your finances when you came in to see us for your free consultation?

Chris: It was frustrating. We were making enough money to pay our bills, but not enough to make the lump sum payments our credit union was demanding to keep our cars or that the mortgage company wanted to stop the foreclosure process. Neither was very flexible and offered us no options to get caught up. Our credit cards had been cut off and we had balances due there, but we were scared to devote money to them when we were so worried about our mortgage. We just didn't know what to do to dig ourselves out.

Question: How did you feel after you left that first appointment?

Chris: It was a relief, pure and simple. Our attorney explained how a Chapter 13 would give us the breathing room to catch up on those past due balances. They looked at all of our information and did the bankruptcy petition on the spot. It was actually filed before we even left the office. Within a little more than an hour, we had peace of mind knowing our lender couldn't foreclose and that they would have to give us time to make up our back balances.

Question: What about your car loans? Did those work out okay?

Chris: That was actually a tremendous surprise. We had two car loans that we had taken out several years ago under five year loans. We owed more on both than the cars were worth, but couldn't afford to buy new ones, so we didn't want to lose them. Your law firm was able to get our loan balances reduced down to the fair market value on both cars. This knocked the balances down by half. They also got our interest rates dropped a little. This was an incredible and unexpected outcome.

Question: You've just finished your repayment plan. How did that process go?

Chris: We had a five year repayment plan and we just made the final payment two months ago. It was a great feeling. Our budget has been tight while we were in repayment, but it wasn't like we were doing without or anything. We have our home and our cars are paid off and still hanging in there. And the last of our credit card balances we had left were discharged after we made our final payment.

Question: Now that you're done, how do you feel about Chapter 13 that you can share with our readers?

Chris: Sometimes it was tough sticking to our repayment plan, I'll admit it. Sometimes we had to balance things out like when our dryer died and we had to wait a few weeks to get a replacement so that we didn't miss our Trustee payments. But we adjusted and then it became second nature. The period we have spent in repayment has really taught us how to budget our money and now that our plan is all done with, I think we are going to be more financially stable than ever. We've got money to spare now, but we're saving instead of spending and still following the budget we developed while we were in repayment. We've got our house, cars, money in the bank and we finally started college accounts for our two kids. Chapter 13 bankruptcy saved us.

If you're behind on your bills, facing imminent foreclosure on your home or repossession of a vehicle, we can help. Contact the law offices of John T Orcutt for a free consultation at one of our convenient North Carolina locations. Also be sure to read our interview with a Chapter 7 filer to see the difference between the two types of bankruptcy.

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