We are filing Chapter 7 bankruptcy
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  1. #1
    Registered User Jamielane's Avatar
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    Default We are filing Chapter 7 bankruptcy

    I never in my life thought we would be in this position. My husband and I are both devastated but we dont have any choice as far as we can see. My husband went from earning about 1200.00 a week to 800.00 and all the credit card companies we dealt with are raising or have raised their minimum payments and interest rates. We are in Michigan and there are no jobs. I homeschool my oldest daughter who has a chronic illness and a full time job is not an option for me as long as she needs me even if I could find one. Dh works every second they allow him to work but we are now to the point that after the minimums are paid on things and we put gas in the vehicleds there is little or no money left for even the bare essentails. I have been having to even charge groceries. You know the classic dog chasing my tail scenario. We retained an attorney and he said the house is not in any danger. We owe 10,000 to 15,000 more then its worth and no money could be made from its sale. We dont have anything large that is of any value for the court to sell either. We are allowed to have 10,000 in personal and ordinary household items. Dh and I have sat down and hashed out a budget for if things go as the lawyer says and agreed that if as the attorney says secured credit card offers will start rolling in as soon as the bankruptcy is discharged we will not get one for at least a year. Then it will be in the custody of dh at all times becasue I am the weak one. He is very strong and can resist the urge to buy something that he wants very much. I however have learned to do without quite a bit in the last year and see things differently now then I ever did. I never ever ever want to owe a credit card company anything again. If we have this debt erased and can begin fresh we can start to save a little money and have learned that we are not entitled to instant gratification that credit cards allow. We will save for things and appreciate them much more this way as well. Right now we both feel like we are in this dark dark place of fear and not knowing what will happen next. I told my dh I am getting through the day by saying to myself in a 6 months this will be over and just a bad memory and we will be starting out fresh if the courts allow. I also pray . Alot. Its all the "ifs" right now that are so stressful. The creditors have not started calling yet but they will in the next week or so and I am dreading it so much. I know its my fault though I have to face the music. The lawyer has told me what to say and that is what I will do but it is still scary as hell. Thanks for letting me ramble and if there is anyone here who has been through this can you please tell me what it was like for you and what happened that you didnt expect and what wasnt as bad as you thought it would be?
    Kim

    Wife to dh Jeff for 23 years

    Mom to dd 18 dd 15

    3 very spoiled cats

    1 dog

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    Sorry to hear Kim. Best of luck to you.
    I saved 100% by buying nothing. Best sale of the year.

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    Registered User frugalwarrior's Avatar
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    Ramble all you want. We're in a tough state in this state. My db may finally have ajob after 2 years. SIL found temp work again. I haven't worked in 2 almost 3 years now. DH works constantly. I drive DD to college because we can't insure her and she can't get a job. I have used a CC for groc. last month and this. Very disturbing. Our electric is up 36% because my DH works from home. We will owe $450. on the electric in 2 weeks even though we are on monthly budget. My poor dad called to tell us he can't give us as much this year for xmas. Now I worry about his financial situation. He got killed in the stock market too. We have no EF let alone money to help.
    I will pray for you. Many good people, hard working people are in this way. Do what you have to for your family. Good luck. Please keep in touch w/ the board,it will help.

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    Rude and Vile Master Greebo's Avatar
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    Have you actually been sued by one of the credit card companies?

    If not - you may be jumping the gun.

    If this is a bankruptcy attorney giving you the advice to declare - remember that's how he makes his living. His advice is biased.

    Have you ever posted a budget, and a list of your debts?
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"


    Greebo
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  5. #5
    Registered User Lindsey's Avatar
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    I hope it works for you. It's hard not to fall back into it though since bankruptcy is so easy and no work...

    Dh's parents were heavy in debt and filed and now are right back to where they were! And shouldn't be because they both have great incomes and he also gets disability and retirement from the AF.

    DH and I got ourselves in the same mess with almost the same about of debt inlaws had when they filed when I started Dave Ramsey. We got out of debt and now have remained debt free for over 3 years now. I also did not work (my choice) because I am a homeschooling Mom and felt it best to stay home with them when they were younger. It was HARD we didn't even give Christmas presents to our own children (or anyone else) during that time we were working our way out. Clothes were never new if and when they were NEEDED, not wanted.

    Good luck with whatever you decide, I just wanted to give you two different scenarios.
    Debt free thanks to Dave Ramsey!

    ^scratch that...we have a mortgage now.

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    Registered User NikoSan999's Avatar
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    Quote Originally Posted by Lindsey View Post
    I hope it works for you. It's hard not to fall back into it though since bankruptcy is so easy and no work...

    Dh's parents were heavy in debt and filed and now are right back to where they were! And shouldn't be because they both have great incomes and he also gets disability and retirement from the AF.
    Bankruptcy is NOT easy and NO work. Maybe you personally see it that way because your inlaws DID do it all over again. Not everyone does. Some people have to start over again with nothing. Not even their home. For some there is no choice. This lady can't even buy food without adding it to a credit card.

    Sorry, don't mean to go off here but don't say it's easy and no work. Hopefully they can do this without filing but if they can't dosen't make them taking the easy way out. It means they need a new start and for them this is it.
    Bank of America is THE godfather of Hell with Wells Fargo running neck and neck. When the world ends the only things that will be left are cockroaches, Walmart, Wells Fargo and Bank of America. Not necessarily in that order. The order remains to be seen.

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    Registered User Lindsey's Avatar
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    Quote Originally Posted by NikoSan999 View Post
    Bankruptcy is NOT easy and NO work. Maybe you personally see it that way because your inlaws DID do it all over again. Not everyone does. Some people have to start over again with nothing. Not even their home. For some there is no choice. This lady can't even buy food without adding it to a credit card.

    Sorry, don't mean to go off here but don't say it's easy and no work. Hopefully they can do this without filing but if they can't dosen't make them taking the easy way out. It means they need a new start and for them this is it.
    Your right, it's not easy...for tax payers. I'm talking comparing one to the other. You lose you possions in both situations, your credit takes a dump in both, I could go on and on, but I'll just call an agree to disagree here.

    It stinks the situation she is in, I wouldn't want to be there (again), but I know how she feels and just wanted to show her two scenarios. $800. a week is still a great income. When we went through this DH was making $1400. a month (this was before the military so we were paying for our own housing) and almost at the end is when DH joined the military. I also weighed my options on filing, so I know what is involved(and not just through my inlaws), but thankfully found DR before we did.
    Debt free thanks to Dave Ramsey!

    ^scratch that...we have a mortgage now.

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    Rude and Vile Master Greebo's Avatar
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    With a 41k income I question whether the judge will even allow for a chap 7.

    Re-reading the OP, I think they're a long long way from bankrupt. It doesn't even sound like they're missing any payments.
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"


    Greebo
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    Registered User Inkstain82's Avatar
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    Leave Michigan.

  10. #10
    Registered User Jamielane's Avatar
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    We have not been sued by any of the credit card companies Greebo. The lawyer gave us several options and didnt pressure us at all one way or the other. It is only a matter of weeks though we will not be able to make even our minimum payments on the cards as they stand now and the December payments of every card is going up due to interest rate increases. If I want to reject the new interest rates then they will be raising our minimum payments. Dh's hours at his job are varying between 32 and 40. On the weeks he cant get 40 they have been letting him use a vacation day to make up the hours. When the vacation days are gone I don't know what will happen. There have even been weeks he has been on 24 hours. We have two kids, one of which requires several prescriptions a month and I am taking my medications every other day to make them go further( I know, I know, I shouldnt but her heart meds are priority over my thyroid and Ibs meds). We have about 45,000.00 in cc debt to 10 different sources and my husbands income is going to come in at about 53,000.00 this year. Last year it was near 70,000.00. We tried the snowball thing but the trouble is there is no extra money to put on a snowball and the debts never go away to add to the next one because I am having to use a card now for the basic expenses. The only bill we have that is not a NEED is the cable/internet and really internet is a need since oldest DD homeschools. So it would be cable tv I guess which is 40.00 a month. That would be a drop in the bucket in the realm of things. Just one cc payment will be increasing by that in December. We are on the budget plan for the utlitlies and I am spending no more then 50 bucks a week on food for a family of 4. There are nights I eat little or no dinner so that the kids and dh will have plenty. I am line drying clothes as much as possible, dont go anywhere that I dont have to in order to save gas and carpool my youngest to school with her friend around the block to minimize the gas usage. I keep the heat down as low as I and oldest dd can stand it during the day . Its getting cold here in Michigan now and I have bad arthritis in my fingers so sometimes I have to turn the electric fireplace on for a little while to warm up the rooms we are in. The only other expense I can think of we have that could go in theory is the cell phones but DH works in a horrendous neighborhood and really needs his as a safety issue and dd needs hers as well as she is sickly and needs to have a source of communication with us at all times if she is out with friends etc. . We are also under a contract for them for another year and have the cheapest plan we could get and share minutes between us. I have applied for many work at home jobs and been rejected at every turn. I even had a friend put in a good word with her employer dog walking but they arent hiring either. I have been out of the work force for 15 years now and have no education beyond high school so finding a job is nearly impossible for me in the state of the economy in Michigan. We have the highest unemployment rate in the country right now. Also Dh works in an industry where the winter months are the worst and his hours are already slashed and the cold hasnt even set in so things are not going to improve there anytime soon and the contract is up in December and I shudder to think what concessions they will want then and how much our health coverage is going to go up. That is all I can think of right as far as budget and debt etc go. I feel like I am living underwater though so if I forgot something I am sorry.
    Kim

    Wife to dh Jeff for 23 years

    Mom to dd 18 dd 15

    3 very spoiled cats

    1 dog

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    Registered User NikoSan999's Avatar
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    Quote Originally Posted by Lindsey View Post
    Your right, it's not easy...for tax payers. I'm talking comparing one to the other. You lose you possions in both situations, your credit takes a dump in both, I could go on and on, but I'll just call an agree to disagree here.

    It stinks the situation she is in, I wouldn't want to be there (again), but I know how she feels and just wanted to show her two scenarios. $800. a week is still a great income. When we went through this DH was making $1400. a month (this was before the military so we were paying for our own housing) and almost at the end is when DH joined the military. I also weighed my options on filing, so I know what is involved(and not just through my inlaws), but thankfully found DR before we did.
    I'll call an agree to disagree also cause this could get heated and don't want to do that. But keep in mind she/he is also/still a taxpayer and will continue to be so as long as working.
    Bank of America is THE godfather of Hell with Wells Fargo running neck and neck. When the world ends the only things that will be left are cockroaches, Walmart, Wells Fargo and Bank of America. Not necessarily in that order. The order remains to be seen.

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    Registered User Inkstain82's Avatar
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    Will your budget be revenue-positive without the credit-card payments?

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    Jamie I'm not saying your situation is GOOD. I sympathize with it.

    But jumping from "the finances are getting tight" to "we're bankrupt" when you haven't even had one phone call from the creditors is a huge stretch.

    And then you talk about 'wiping the debt clean' - well you did borrow the money - what about the creditors who you borrowed it from? Are they not entitled to be repaid? Using bankruptcy as an out when you ARE able to make some kind of payment, well to be honest, I have a real issue with the morals of that kind of use of bankruptcy.

    And I still am not sure a judge will let you do a chap 7 - with 41k of income, it's more likely you'll get a chap 13, which won't eliminate any debt, it'll put you on a court mandated payment plan, while still trashing your credit.

    Repeating the question: Have you posted your budget and your actual list of debts here anywhere?

    What about a 2nd job for DH or a night job for you while DH is home?

    New question: What have you sold? You've got 45k in CC debt - so where are the things that 45k bought? Have you sold em? What about cars? For that matter - what about your house? Even if you can't get out of the house w/ any money left over, what's the house payment? If it's not affordable, it's time to move and sell the house, even if its at a loss.

    I don't have a problem with bankruptcy in certain circumstances - but I'm having a really hard time in this case NOT thinking that this is little more than a "oh times are getting hard lets just walk away from our responsibilities" move.
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"


    Greebo
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    Registered User Inkstain82's Avatar
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    Quote Originally Posted by Greebo View Post
    And then you talk about 'wiping the debt clean' - well you did borrow the money - what about the creditors who you borrowed it from? Are they not entitled to be repaid? Using bankruptcy as an out when you ARE able to make some kind of payment, well to be honest, I have a real issue with the morals of that kind of use of bankruptcy.
    I've never agreed with that. It's not personal or moral, it's business. As long as she doesn't take on any additional debts in bad faith (and didn't take the debts on originally in bad faith), there's nothing wrong with assessing the situation and deciding what you think is best for yourself: paying the debt or accepting the consequences. That's the entire point of our market-based economy: Everyone acting in their own best interests within the law.

    Like you said, though, I don't think the law is going to make it as easy to walk away from these debts as she thinks/hopes.

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    Registered User NikoSan999's Avatar
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    Quote Originally Posted by Greebo View Post
    With a 41k income I question whether the judge will even allow for a chap 7.

    Re-reading the OP, I think they're a long long way from bankrupt. It doesn't even sound like they're missing any payments.
    http://www.bankruptcylawnetwork.com/...-test-numbers/

    "In these courts, under limited circumstances, a debtor with “disposable income” per the means test may still be able to file Chapter 7 or a Chapter 13 with a monthly payment inconsistent with the means test. However, in most cases, the bottom line number generated by the means test will be used to determine whether Chapter 7 is possible or, if a Chapter 13 is mandated, what payout unsecured creditors in a Chapter 13 can expect."
    Bank of America is THE godfather of Hell with Wells Fargo running neck and neck. When the world ends the only things that will be left are cockroaches, Walmart, Wells Fargo and Bank of America. Not necessarily in that order. The order remains to be seen.

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