About 2 years ago, my father plainly told me, “you need to file bankruptcy”
I resisted, vehemently to him, for weeks. For me the idea of filing for bankruptcy meant I was giving up, that I couldn’t do it.
Well no duh it was giving up. I wasn’t winning. At a certain point my mantra of “never give up” just becomes ludicrous. And so I filed for bankruptcy towards the end of 2007.
It was a good move. Looking at my personal debt now 18 months or so after filing, my situation has improved dramatically. Could I have made it without filing bankruptcy? Maybe. Probably. But at the time, it was the best decision for myself, my future and my mother (I owed her 145K at that time).
How has filing bankruptcy affected me since I did it a year and a half ago?
Honestly very little. I couldn’t approved for a home loan right now, even with a high income, but that’s fine, I don’t want to buy a house anytime soon.
I found housing after my bankruptcy and short sale via private landlords on craigslist just fine. I was upfront with my current landlord about my bankruptcy, and after checking my references and my payment record with my previous private landlord, I got my current apartment.
So, while I was initially repugnant to the idea of bankruptcy, in hindsight, it was a good move. It gave me a little breathing room when I desperately needed it.
You filed bankruptcy?
Has anyone else filed for bankruptcy? Are you glad you did? Did you file Chapter 7 or 11?
{ 7 comments… read them below or add one }
I am not so sure that bankruptcy is really worth all the headache as it at one time was. Now I suppose one could argue that I have no idea what I am talking about becuase I am not a lawyer and I have not gone through a bankruptcy. But just the same I have been involved professionaly with many people who have indeed filed bankruptcy and it really seemed to bring on more problems then it solved. I think that the old model of bankruptcy before busch passed the new legislataion was effective though still carried some serious consequences. But now…. You are still gona have to coughn up all the money you owe. or atleast quite a bit.
Yes, I filed bankruptcy. Chapter 7. If I needed to do it again, I would. It was the best thing I ever did for myself!
You still owed over $300,000 after the BK, so how was that a good thing? You still had a new car, and a biz. I don’t think you learned anything. You should have been taking the bus and washing dishes.
If by “new car” you mean 3 years old at that point, sure. Taking the bus and washing dishes? Thanks for the laugh this morning! I understand the point you are trying to make, it’s just a really really ignorant one.
I am glad that you had a good laugh. BK protects the CREDITORS. I take the bus, and although it has been a while since I washed dishes, I might be doing it again soon. Your sense of entitlement is rich. Laugh some more, and call me ignorant. People who hit bottom know that it is a springboard.
I don’t think Bankruptcy means you should be walking around in the proverbial barrel. It ‘protects’ you and some of your assets (i.e. a car may be necessary to get to work; in my case owning a car service it IS the work). I couldn’t make money (until I found a full time job ) if I didn’t have this car.
I am doing what I call a ‘do it myself’ bankruptcy for now, before going through with an actual filing if that’s going to be the final straw. Not sure yet. It’s a matter of mostly credit card debt (from a failed business attempt at flipping houses…make that one house in the slums of ATL where a property ‘manager’ scammed us out of $6,200 in phoney house repairs..another story…!), some HOA dues, a small tax balance (though the IRS ok’d a pay plan til Jan. 2010) etc. Just saved our own home from FC via a 10 1/2 month modification process and the slum house in ATL is closing this week via a short sale.
But, to file or not to file? I don’t think yet only because the car service is doing very well despite economic factors so there’s a income flowing in. I keep in touch with all my creditors, try to work out pay plans. Some are kind and understanding and some are nasty! But I’m having such a time catching up it’s really scary at times. Factor in an 800.00 car repair -on the business car-this week and it really drives home the ‘what if?’ factor of life which could truly force filing as a last resort.
Thanks to Debt Kid ,I have found Dave Ramsey so I have a little more knowledge from him to figure out how to juggle this situation BEFORE I actually do file. I agree it really is not to be taken lightly.
I don’t have a huge tax debt and currently have not been sued nor do I face any leins on my property so honestly for now I don’t think bankrtupcy really is the final answer – yet. But for people who are facing leins of the tax sort or medical bills to contend with washing dishes and riding the bus won’t do much more than put food money in your pocket.
Rght now my do it myself bankruptcy starts with the big three formula:
1) scale back on every unnecessary expense I can
2) sell off (ebay is very much my friend now ) and
3) earn MORE ( I write articles for websites now on the side while working at the car service biz. So far in 9 months it’s brought the total no. of debts down from and the amount’s dropped a solid $25K – & once the bum house is sold this week it goes down even more. And with payment plans with some creditors like BofA we’re literally on a 5 year 200 per month pay plan to pay off a card which is closed now but has only 5% interest forever and no more fees on it. Sounds like something akin to Ch 13 to me.
My biggest problem is ‘when’ to file….IF I need to. How do you tell?
I think for Debt Kid it really was the right thing at the right time.
The funny thing is bankruptcy seems to give everyone the impression you have to be stripped down of everything; you wind up ‘poor’ . Or, on the other hand you can walk away from overwhelming credit card debt. But it’s more involved than that. It doesn’t wipe your slate totally clean in terms of money owed. Unless you file a 7 or 11 for a business in which case selling off a car or a house or a jewelry collection is deemed the thing to do to raise the cash to pay your creditors by the Trustee.
Filing bankruptcy legally stops foreclosure actions for a time and gives you room to deal with any leins or lawsuits to form a legal plan to get things sorted. I know people who’ve done it -Ch 13 10 years ago- and swear it was the worst thing because of how it haunted them financially for so long. They were dealing with massive credit card debts and got scared. Now they warn us…don’t do it too soon- especially if it’s mostly credit cards!!! Truly you can deal with most any creditor especially in today’s economic climate. As much as I bust BofA on my own blog (overdraft fees from hades! damn them!) sometimes I’ve actually found them to be the most understanding. One customer service guy even told me while asking for a $388 min.payment that day (!) that one’s credit rating is not, in very short order, going to mean the same thing it once did and not to worry about my credit (once a flipping 800 – I swear…!) score going down. This subprime meltdown will totally change how credit scores are going to be viewed by banks and lenders in the future he said. WHY file bankruptcy when you can sort a lot of things out with communication with creditors, lots of paperwork (not fun) and time. (I joke to my husband that my new part time job is dealing with the finances – and it is! but it’s going to cost to file bk so if I can avoid that then the time spent is worth money to us.)
I’m mixed about it, but BK could be the last resort so I like hearing what everyone’s got to say about it. Esp. on this blog. The more I learn, the less scared I get & the more I can focus getting hubby and I to fix this somehow -oh and I used to work for a bankruptcy/foreclosure legal dept at a bank—I thought I was smarter than to ever get into a situation like this, but….then life sort of just happened to me.
Bankruptcy is what the banks did to us when we gave them billions. The only right thing to do now is file on them ,because your taxs will be going up to pay back the billions to the goverment,the only way to make it fare ,is to offset there game with your own game,one that kicks there plan out the window. There gambleing people wont file bankruptcy,and in many cases there are always the poor saps that will struggle for years to pay them back,and still end up broke and homeless. They didnt deserve the bail out billions. So make no mistake ,the Amercican people will get them,one way or the other for ripping us all off.