Bankruptcy

[yajsreym]

I am about to file Chapter 7 bankruptcy. I have already made that decision.

I make $22,880 a year. It equals out to about 320 bucks a week.

I am single. 27 year old male.

I have no mortage (i rent).

I have a car payment (which I will be reaffirming... gotta get to work somehow and it's a good car)

Credit cards (4 of them) equallying about $9,760. I have spent years and years trying to get my credit cards paid down. I've had second jobs. I've couponed. I got rid of my cable. I went to a cheap pre-paid cell phone instead of a contract. I've done everything but only making $11 bucks an hour I just can't pay these things down. It's my fault. I overcharged. I assumed I would make more money after college (i have no students though, I had scholarships and paid cash for the rest). My minimum payments are about 300 bucks a month (so that 1/4 of my income). I have never had a late payment before in my life, but trust me, I have barely scrimped by. 

I need a fresh start, plain and simple. I need to be able to afford to put food on my table. I need to be able to put gas in my car without saying to myself, "okay, well I have 8 dollars of credit left on this card and 3 dollars on this card, so I can put in about 11 dollars which might get me to work the rest of the week if I am lucky and then i'll just have to pay my rent a little late and hope I don't get a fee."

The final straw was when my car needed new tires. Like needed them QUICK. I had to apply for another credit card just to be able to get two front tires replaced (gotta have a car that runs or else I can't get to work to make the money).

QUESTIONS:

1) My roommate and I share a checking account because it's the easiest way to write out checks for our electric bill, rent, water, gas, etc. We both use a cash only method of spending to avoid overspending, so the bank account usually has about $15 bucks in it after we pay bills and take out money for gas and groceries. So there is no extra money there to apply to my cards. Will this affect my bankruptcy because we share an account?

2) I have never paid anything late and I really don't want to. I have borrowed money from family to pay bills before just so I don't end up late on anything. I have repaid them by doing laundry or chores just so I don't have a late fee or a hit on my credit. Is my 100% never late credit history going to hurt my bankruptcy? When should I stop paying my credit card minimums?

Finally! - I have a consulation with a bankruptcy attorney on April 1st, 2013. He is a friend of mine so I trust him well (I am a legal secretary for the governement so I know a lot of good attorneys... and a lot of bad ones too, haha). I will ask him all of these questions as well but wanted some input from this website first.

Any input would be greatly appreciated. Thank you. 

[jasonbirks]

QUESTIONS:

1) My roommate and I share a checking account because it's the easiest way to write out checks for our electric bill, rent, water, gas, etc. We both use a cash only method of spending to avoid overspending, so the bank account usually has about $15 bucks in it after we pay bills and take out money for gas and groceries. So there is no extra money there to apply to my cards. Will this affect my bankruptcy because we share an account?

2) I have never paid anything late and I really don't want to. I have borrowed money from family to pay bills before just so I don't end up late on anything. I have repaid them by doing laundry or chores just so I don't have a late fee or a hit on my credit. Is my 100% never late credit history going to hurt my bankruptcy? When should I stop paying my credit card minimums?

Finally! - I have a consulation with a bankruptcy attorney on April 1st, 2013. He is a friend of mine so I trust him well (I am a legal secretary for the governement so I know a lot of good attorneys... and a lot of bad ones too, haha). I will ask him all of these questions as well but wanted some input from this website first.

Any input would be greatly appreciated. Thank you. 

---

Hey hows it going?! I've been in and out of the forums for quite sometimes, but have never actually posted anything.  I completely understand your situation, I was discharged from my Chapter 7 in August of last year.  As far as your first question goes: It is my opinion that the shared account should not affect your BK negatively.  You made a good point in saying you always pay on time, I applaud you for that.  Bankruptcy pretty much looks at the amount of income you have vs what liabilities you have.  The amount left over in your account after bills are paid is not really a factor.  This slides me into your second question-Your 100% never late should actually help your BK.  My last late payment was 5 years and 9 months ago; im still getting hit negatively becauase of it.  Once the BK is discharged and reestablishement begins, continue to pay your new debts on time.  The payment history(which makes up about 35% of your score) will lessen the impact of the BK.  I hope this helps.  If you have any other BK questions, feel free to ask.

On another note-I FELT SO LIBERATED after my discharge.  The second chance is awesome, I am happy you have decided to file.  I was young and immature when I accumulated my debt.  I had no education on the responsible use of credit, and being a young sailor did not help. 

[yajsreym]

Thanks. That's sorta what I was thinking too. Been doing a lot of research but always enjoy a second opinion.

I studied bankruptcy for a semester in college and so I knew it wasn't the big scary beast most lay-people make it out to be. But for me, deciding that I was going to file bankruptcy was one of hardest decisions of my life. Last year around June I thought about it... but then I talked myself out of it. I tried to consolidate all my loans onto one card... Captial One, that gave me a $5000 dollar limit. Then soon enought it was $5500. And soo enough I had got myself a bunch of new clothes and actually got to go out with my friends a few nights and get something to drink besides just water. I thought I'd get a pay raise at work... but nope, still on pay freeze (been so for 4 years now). And if anyone thinks I should just go get another job, haha, yeah, good idea. I've got good health insureance and a retirement plan. I'm not about to throw that away.

Now it's almost a year later and I've screwed myself over worse (well, I was in debt $8000... now it's about $10,000) 

But since then I have changed a lot. I've learned how to coupon and shop the adverts (you won't see me paying full price for nothin'!). And now days if a button comes off my shirt, I get a friend to sew it back on, instead of buying a new one. Just the other day my shoes for work started getting frayed shoelaces. I brought new shoelaces instead of new shoes. If I decide to shell out cash to see a movie with friends, I go to the matinee instead.

Going bankrupt taught me everything about how to stretch a dollar, so even though it was tough, to be honest, I'm glad i've gone through this. I've learned so much. I haven't had my consultation with the attorney yet (April 1st!) but ever since I made the decision and scheduled the appointment, the weight of the world has been lifted off my shoulders. I know other people on here probably know that feeling of relief. I finally feel like I have a future. I finally feel like I am going to get my life in order and be able to have a savings account for a rainy day, instead of the whole "oh well, if something  happens i'll just apply for another credit card." 

I got myself into this mess but I'm doing my damnest to learn from my mistakes and turn this fresh start into the beginning of a financial rebirth. I was sure for years that if I just buckled down and pushed every penny I could to the credit card companies then I would eventually.... after years of hell... pay them off. 

Well I just can't do that anymore. I can't live on ramen noodles. I can't ignore life. I could die on the way to work tomorrow. I am taking control and I'm not gonna feel bad about it one bit. Sure, some people go through the idea of "well, it feels like cheating." But you know what, with my credit cards between 24% and 28% APR and me paying the minimums for years, I've MORE than paid them back. They're gonna get a tax credit from the government for my discharge anyways. 

On one site I read said, "think to yourself, can I pay off my debt in two years if I really try?" My answer was, "Ha! I'll be lucky to have it paid off in ten." So if it's gonna take ten years, why not file Chapter 7? Why not spend the next ten years building a savings cushon and rebuilding my credit, than go through this hell. In ten years my bankruptcy will be off my record. So why not?

This year I am getting a financial restart. And I've never felt better before in my life. 

[yajsreym]

So far so good. I have retained and paid my attorney (total was $839, this does include the filing fees... they have billboards all over town advertsing a flat fee of $500 bucks for a chapter 7 + court costs + required bankrupcty classes + credit report)

My meeting of creditors in June 20th.

I have already saved up a few hundred bucks to put into savings when it's all said and done and its a great feeling.

It's funny because my petition was filed on April 26th and I already have credit offers and car loan offers and crap in the mail (all of which advertise as being bankruptcy friendy).

If my 341 meeting is June 20th I'm guessing I should have my discharge around early August. Does that seem right? 

The strangest thing of all about this whole process is how easy it has been. Honestly, the hardest part really was just making the decision to do something. 

[aussiesareforever]

Congratulations on your new lease on life. I filed BK because of a similar situation. I was young and inexperienced.

Life outside of BK is not completely straight forward but it is easier than life before it. Use it well, it will be absolutely worth it in a few years!