Bankruptcy
June 8th 2008 14:01
I hate to say it, but it actually took filing for bankruptcy for me to get back on my feet. Unfortunately, it was before the new bankruptcy law which makes it a bit harder. This is a personal experience entry that will hopefully help anybody considering it.
I was over $60K in debt and was literally living from day-to-day on bologna and pb&j sandwiches. The major debt involved mortgage, loans, credit cards, and that doesn't include the increasing variables such as food, utilities, etc. My house needed major renovation, since I was practically given the mortgage through predatory lending. Yes, it was a money-pit, and I got soaked there, too.
The spiralling spending made me max out credit cards. Eventually I was running behind on paying my bills, including my mortgage. Then the calls started, the excuses came, and the phone went unanswered.
When I finally paid off my car, I figured I would now have an extra $300 a month. That was a pipedream as gas, utilities, etc., went up in price. I would walk to work because my job was nearby, but then I would make myself a victim to a possible crime since the neighborhoods were crime ridden.
I was getting desperate and started calling those TV ads where you can pay off your debt for less because they would reduce your overall bills. I found this to be a sham when I was told that they can reduce my total bills by $6(SIX) a month. I can cut $6 a month myself and wouldn't need their help.
I tried negotiating with credit card companies to no avail. They wanted their money. In desperation I considered bankruptcy and went lawyer shopping.
To find a lawyer I had to do some serious shopping. It took me almost a year. Most did only credit cards, some cc and loans, others only filed Chapter 13 when it was Chapter 7 I was looking for. Some did a point system to see what you could and can't declare. Needless to say I didn't buy into any of these which I considered 'band-aid' solutions, meaning that I would be back where I started in no time!
I finally found a lawyer that suited me and was within my price range for a little more than $600. I made payments and after my first installment, I began to see a difference. I was able to answer my phone and inform the collectors that I am in the process of filing bankruptcy against them. Now they were willing to negotiate. I wasn't!
When I made my final payment(within 2 weeks) was when my lawyer filed for Chapter 7 on my behalf. I included my money-pit house in the deal. When we appeared in bankruptcy court, thew process took less than 5 minutes when it was my turn. Suddenly it was as if I was given a clean slate and this burden had been taken off of me. The downside of the whole deal was that my name appeared in the paper. Big deal!
Now came the task of being able to get on with my life but without falling back into that bottomless pit of debt. After all statistics show that those who file for bankruptcy will eventually fall back into debt. I knew people like that. As a matter of fact everybody I know that filed had/has gone back in debt. One guy seemed to take pleasure filing every 7 years after running up a debt. For these system-players the new law serves a purpose.
It's been over 4 years and I am still debt-free. I got offers for loans and credit cards after my bankruptcy, but they all end in the trash. I have a debit card only for convenience. I am saving and spending only on things I can afford. I know that I am still walking a fragile highwire, but it is becoming easier and I am seeing monetary results I never thought possible.
I am able to stay afloat better than most in these trying times with everything rising in price due to oil. I am able to pay my bills and buy food that is good for me. I'm not saying that I don't come into any hard times, but I am better prepared to deal with it. If I ever get into these personal experience entries, I'll write about how I survived without a paycheck for a month after an unfortunate work accident. That proved to me that I might be doing 'something' right!
Note: This was a personal experience that worked for me. It was before the New Bankruptcy Laws and might not totally work today. Results may vary from individual to individual. These are USA laws and may not apply to other countries. This experience should only serve as a guideline to financial problem solving.
I was over $60K in debt and was literally living from day-to-day on bologna and pb&j sandwiches. The major debt involved mortgage, loans, credit cards, and that doesn't include the increasing variables such as food, utilities, etc. My house needed major renovation, since I was practically given the mortgage through predatory lending. Yes, it was a money-pit, and I got soaked there, too.
The spiralling spending made me max out credit cards. Eventually I was running behind on paying my bills, including my mortgage. Then the calls started, the excuses came, and the phone went unanswered.
When I finally paid off my car, I figured I would now have an extra $300 a month. That was a pipedream as gas, utilities, etc., went up in price. I would walk to work because my job was nearby, but then I would make myself a victim to a possible crime since the neighborhoods were crime ridden.
I was getting desperate and started calling those TV ads where you can pay off your debt for less because they would reduce your overall bills. I found this to be a sham when I was told that they can reduce my total bills by $6(SIX) a month. I can cut $6 a month myself and wouldn't need their help.
I tried negotiating with credit card companies to no avail. They wanted their money. In desperation I considered bankruptcy and went lawyer shopping.
To find a lawyer I had to do some serious shopping. It took me almost a year. Most did only credit cards, some cc and loans, others only filed Chapter 13 when it was Chapter 7 I was looking for. Some did a point system to see what you could and can't declare. Needless to say I didn't buy into any of these which I considered 'band-aid' solutions, meaning that I would be back where I started in no time!
I finally found a lawyer that suited me and was within my price range for a little more than $600. I made payments and after my first installment, I began to see a difference. I was able to answer my phone and inform the collectors that I am in the process of filing bankruptcy against them. Now they were willing to negotiate. I wasn't!
When I made my final payment(within 2 weeks) was when my lawyer filed for Chapter 7 on my behalf. I included my money-pit house in the deal. When we appeared in bankruptcy court, thew process took less than 5 minutes when it was my turn. Suddenly it was as if I was given a clean slate and this burden had been taken off of me. The downside of the whole deal was that my name appeared in the paper. Big deal!
Now came the task of being able to get on with my life but without falling back into that bottomless pit of debt. After all statistics show that those who file for bankruptcy will eventually fall back into debt. I knew people like that. As a matter of fact everybody I know that filed had/has gone back in debt. One guy seemed to take pleasure filing every 7 years after running up a debt. For these system-players the new law serves a purpose.
It's been over 4 years and I am still debt-free. I got offers for loans and credit cards after my bankruptcy, but they all end in the trash. I have a debit card only for convenience. I am saving and spending only on things I can afford. I know that I am still walking a fragile highwire, but it is becoming easier and I am seeing monetary results I never thought possible.
I am able to stay afloat better than most in these trying times with everything rising in price due to oil. I am able to pay my bills and buy food that is good for me. I'm not saying that I don't come into any hard times, but I am better prepared to deal with it. If I ever get into these personal experience entries, I'll write about how I survived without a paycheck for a month after an unfortunate work accident. That proved to me that I might be doing 'something' right!
Note: This was a personal experience that worked for me. It was before the New Bankruptcy Laws and might not totally work today. Results may vary from individual to individual. These are USA laws and may not apply to other countries. This experience should only serve as a guideline to financial problem solving.
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