My family is trying to decide whether to file Chapter 13 now or wait and try to qualify for Chapter 7, and I’d really appreciate some perspective.
We have a bit over six figures in unsecured debt (credit cards and debt consolidation loans). Most of it has already been charged off. We made the decision to file last summer but dragged our feet, and now we were just served on one of the debts last week.
We’re in North Carolina (Triangle area), and from what I understand, wage garnishment for consumer debt isn’t allowed here. Because of that, our original plan was to wait a few more months so our income averages reflect my wife no longer working part time, which should help us qualify for Chapter 7.
The issue is I hold a security clearance. A lawsuit is likely to trigger continuous evaluation, and I haven’t reported anything yet because my intent was to do so alongside filing bankruptcy to show we’re taking a structured approach to resolving the debt. Right now, there aren’t any mitigating factors in place, which is part of the concern.
So now we’re stuck between:
- Filing Chapter 13 now, since we’ve been served and it shows action (maybe attempt to convert later?)
- Waiting a few months to try to qualify for Chapter 7, but taking on more risk
This built up over time while trying to stay afloat with a young family. We take responsibility for it, just trying to make the best decision going forward.
Would really appreciate any insight, especially:
- If you chose Chapter 13 vs waiting for Chapter 7 and how that worked out
- How lawsuits affected your timing or outcome
- Anything we might be overlooking here
Thanks