1. Debt limits for a Chapter 13:I am currently in default on two homes which will result in. . . a $200k deficiency. . . I have about $20k in (non exempt) assets and owe $20k on credit cards. . . (A)n attorney advised me (that the foreclosing lenders). . . have four months after filing to submit this claim. The attorney also advised me that filing chapter 13 would be advisable since I have the option to back out. However, I might qualify for chapter 7. He told me the chapter 7 trustees are more aggressive and likely to advise the bank to file the unsecured debt. His fees for chapter 13 are $4700 and 7 $2200. One more concern is the amount of my unsecured debt is just over the limit of 1,000,000 and I may not qualify for chapter 13. Although he said he could submit it to see if goes through, I would still be liable for his fees if it doesn't.
$1,081,400.00 for SECURED debt
$360,475.00 for UNSECURED debt
2. Non exempt assets in a Chapter 13 are protected so long as you pay to your unsecured creditors the value of those assets over the life of the Plan.
3. Non exempt assets in a Chapter 7 will be taken by the Chapter 7 trustee for the benefit of your creditors.
4. Creditors have the right to file claims in either Chapter. Some may choose not to. In a Chapter 13 you have the right to object to claims assuming you have a valid reason to dispute them. In a Chapter 7 you do not have standing to object unless you are a “solvent estate”.
5. If you otherwise qualify for a Chapter 7 and do not care about the non exempt assets, consider it as you will obtain your discharge (assuming no creditor objects) within about 4-5 months, instead of being stuck in bk for 3-5 years.
6. If you want to protect your non exempt assets do not file a 7. If you are below the debt limit file a 13. If you are above the debt limit think about a Chapter 11.
Being able to dismiss the 13 (can’t just back out of a 7 or 11), is not a reason to file a 13. You have to decide what you are trying to accomplish. Do not let the attny push you into a 13. Consult with several attnys before making a final decision.
Des.

