topic Re: People with BK please comment in Bankruptcy

People with BK please comment

ecocredit — Wed, 07 Jan 2015 04:26:38 GMT

I've read about people going through bankruptcies and I'm curious to learn more about the circumstances that lead people to filing for bankruptcy. If you guys feel safe to share, I'm curious to learn more about the circumstances, what you could've done to prevent it and how are you guys rebuilding your lives? I'm not here to judge. I'm simply trying to get a better understanding.

Re: People with BK please comment

pizza1 — Wed, 07 Jan 2015 04:30:11 GMT

Are you currently in a BK yourself, or post BK? This should be in the Bk section. If you're a member here, I would assume you browse all the categories? It's filled with rebuild stories of people who have files and rebuilt their lives

Re: People with BK please comment

ecocredit — Wed, 07 Jan 2015 05:57:01 GMT

Sorry. I did not realize there was a section dedicated to it. I am not in a BK. I am just researching it.

Re: People with BK please comment

TRC_WA — Wed, 07 Jan 2015 06:12:29 GMT

I don't mind sharing... LOL

I lost my job in 2008 during the recession and was out of work over a year. I blew through my savings and got to the point where I was paying my bills with $20 a week left over. That's how it is when you are in a state where $300 a week is the maximum unemployment... (by comparison the state I am in now, WA, pays a maximum of $620 per week)

Anyway, there was no work in sight and even though I wasn't behind on bills the ship was sinking... so I filed Ch 13 and got on a payment plan and kept the car as well. I've got a lot of pride and am glad I didn't file Ch 7 and burn all my creditors 100%. I don't know if Ch 7 was an option (my attorney said it wasn't) but another poster today said my $37k was under the GA guidelines and I would have passed the means test.

Water under the bridge now... don't care. I moved west 4 years ago and got a good job. I have rebuilt my credit and have quality accounts... Ch 13 falls off my report in April 2016. According what I read tonight I can get it deleted 6 months early off TU... and 1 month early off EX and EQ. Pretty cool.

I'm in cruise control mode now... my profile is where I want it to be after a lot of patience and work... I started in May 2013 with a $1000 CapOne card. Now I have over $40k in cards... including all the majors Visa/MC/Discover/Amex.

Re: People with BK please comment

FocusedAndDetermined — Fri, 09 Jan 2015 01:34:20 GMT

For me it was a combination of factors, some beyond my control and some within. I had accumulated more debt than I should have, had a reduction in income and child with a medical issue. I had worked out payment plans with most creditors but when the next reduction in income came, it became a choice of creditors or child. Needless to say, child won! BK7 was the only way forward.

Since that time, I have not charged beyond my means or missed a single payment. In fact, I have only carried a balance once and that was for only one month. The lesson has been learned!

Re: People with BK please comment

Taoron — Fri, 09 Jan 2015 02:29:11 GMT

I think it was a mixture of things.

1) Medical disability

2) Kept losing income

3) No income = not able to pay bills

4) "current" bills go into collections.

5) Cycle continued on and off every few months for 10 years.

Couple trips to the ER in AZ = $$$ and no insurance due to lackluster job (didn't provide insurance.)

In between the times I was working, I had no money and no income so that just made things worse. Bills would go unpaid and I'd have to try to start over again after I got a new job. So this probably lead to depression as well. That lead to poor management of finances.

Re: People with BK please comment

Anonymous — Fri, 09 Jan 2015 02:40:12 GMT

I filed because in 2009 I bought the "American Dream" when I bought my first house and it turned out to be a 3 year nightmare instead. Although my house was nice and so was the neighborhood, there was a bad group of kids there that terrorized many others including my son. They bullied him for 3 years, put him in the hospital once when they threw him into a brick wall and almost broke his nose and succeeded in breaking his 2 front teeth clear in half. I tried listing my house then to sell it and get outta dodge but the market just wasn't moving.

Three months later, in January, they pushed him into a lake on the way home from school and I was done. I called Bank of America and told them to take the house back, I didn't want it anymore and that I could re-build my credit but not my son when they cracked his skull open.

SO.....a $160K foreclosure later and some defaulted medical bills I filed, best decision ever. My son is safe and my score is coming back as I knew it would.

Re: People with BK please comment

Anonymous — Fri, 09 Jan 2015 19:02:32 GMT

For us it was a combination of things.

1) A change in employment for me. I work in healthcare and after a merge with another facitily (as well as a decrease in patient admissions) my hours were cut by 2/3 of the hours I was accustomed to working for the several years prior. About a year later my husband lost a freelance writing job that he had worked on the side for a reduction of $24000/yr. So those combined were equivalent to losing a full time job for us. We quickly depleted our savings and had to resort to using credit cards just to buy basics, like groceries. We always intended to be able to "get back on our feet" and figured that we were "good for the money" once my job situation changed. It didn't.

2) Medical bills/issues over a two year time period. We have "good" insurance and still owed a very large amt when we (my husband and I) had to have surgery within a 12 mo time period. I am glad that we did though and neither of us have any long term issues. We also have four kids... one of whom has several asthma resulting in some medical bills and one who has severe allergies.... resulting in several trips to a specialist during that same time.

3) Lack of a budget and focus on reality. We used to have a budget and we followed that closely. When our 4th baby was born my mother died a few weeks later.... and I was off of work. There was almost a year where there was no budget and I honestly was disconnected with the reality of the long term ramifications of credit card usage and no budget. Also, sometimes I think we are the unluckiest people we know.... if one appliance breaks, another does. If one car needs tires the other needs brakes. We put our house on the market for a year hoping to sell and use the equity to pay off some cards and rent for a while and save for a new home... We got NO offers in over a year of having it on the market.

We have never been overspenders in general. We do have two cars.... one is a 2000 and one is a 2006 both dodges so nothing fancy. We don't have any luxury items. Our home is very moderate. We do not take fancy vacations.... so I guess overall life happened to us. The biggest thing for me was admitting we were in over our heads... admitting we were never going to dig out of the hole we were in. We have tried many different things in the past two years and were able to pay off our cars, student loans and some medical bills... but with the interest rates on our credit cards we were not getting anywhere. We had never missed or been late with a payment until september. At that point we realized there was no way we could continue to make payments on our cards. We did some research and met with an attorney and I can honestly say I feel better now that we can manage to pay for everything we need (house, insurance, food, utilities, gas) with a budget and without using cards at all.

Re: People with BK please comment

MacMan313 — Fri, 09 Jan 2015 19:37:09 GMT

Serveral combining factors. I was taking out debt to pay my other debts. Once I was unable to acquire more debt i was unable to pay bills. Spiraled completely down hill

Re: People with BK please comment

redmarc32 — Fri, 09 Jan 2015 20:33:26 GMT

I filed BK7 in September 08, discharged January 09. I filed after being layed off from a teaching position and being unemployed for almost 10 months. I had purchased a condo at the height of the housing bubble and could afford the payments at the time, however, after almost a year of unemployment I couldn’t keep up, my credit cards were nearly maxed and I was mentally “over it”, really tired of just surviving from day to day, so I Googled “bankruptcy” and started researching the pro’s and con’s. The final factor that pushed me over the edge was the development where I lived had started a new phase and I called the office acting as a potential buyer inquiring about the price of a condo model just like mine, they were now selling for 200,000 less; I was shocked, sad and crushed. At this point in my life I was financially naïve, I thought I had done the right thing by purchasing a home for my kids and I but had no clue about the real estate market and housing bubbles. I made a mistake. Six years post discharge; I believe that it was absolutely the right decision for me and my family. Filing for BK7 motivated me to become financially educated and aware of my options in life; from credit cards to retirement, I research everything; I make choices only after thoughtful consideration. Life is long and I’ve recovered, I have a great job that I've been at for the past 6 years. If I wanted a mortgage I could be approved. I have plenty of available credit but I pick and choose what to apply for and when. There is so much information and advice on the internet now. I am on this board multiple times daily just reading and learning from other people’s experiences, but as you can see this is my first post but I thought you asked a very good question and I’m in a place where the end of the tunnel is fast approaching and I can speak from experience and growth. I wish you the best. Regards

Re: People with BK please comment

ecocredit — Sat, 10 Jan 2015 09:13:09 GMT

Thanks all for sharing so openly about your individual situations. Is it reasonable to assume that more financial planning / education could've helped? A lot of factors are usually out of our control like the 2008 RE market crash.

Re: People with BK please comment

Anonymous — Sun, 11 Jan 2015 00:55:24 GMT

@ecocredit wrote:
Thanks all for sharing so openly about your individual situations. Is it reasonable to assume that more financial planning / education could've helped? A lot of factors are usually out of our control like the 2008 RE market crash.

That's a really good question. In my case, I doubt it. I was in pretty good shape until about 15 years ago. My wife lost her job, and while she wasn't making much, it made a big difference. I knew she's never find another job. Then about 10 years ago I lost my job. I was unemployed over a year. With no other income we were basically living off the credit cards. I'm not really sure what other options we would have had at the time.

When I finally was able to find a job it was almost $30K less per year than I was making before. Add that to the loss of income from my wife and we're talking close to $60K a year difference. At that point I could no longer get our debt lower and just slowly rose. Then the wheels really fell off. I got cancer (vocal cord) about 3 years ago. Even though I had insurance through work, my out of pocket expenses were close to $10K. Then 2 years ago it got worse, more cancer, this time lung. I had an operation and was not able to work for close to 3 months. While I had short term disability insurance, it was a further 30% pay cut. On top of that add another $10K in medical bills and you can start to see the type of hole that I was digging.

Finally, October of 2013 I got fired. The health issues were a contributing factor, but not enough to qualify for disability. At that point I kind of knew it was over. At 59 years old, in the tech business, I wasn't going to find another job. I knew bankruptcy was inevitable.

What really bothers me, back in 2010 I bought a new car. The finace guy told me he had never seen a higher FICO score. I owed a lot of money, but I had tons of cards and not a single late payment on anything. Now, at 60 years old I'm starting over. Oh well.

Re: People with BK please comment

ecocredit — Sun, 11 Jan 2015 07:26:51 GMT

That really sucks. I think the potential for gathering debt is rather high unless you have some guaranteed source of income. BTW as a side note, the tech sector is booming, I hope you'll find a job.

Re: People with BK please comment

CWESTL — Sun, 11 Jan 2015 17:49:38 GMT

In my case a variety of issues contributed to my having to file bankruptcy. These included the recession, loss of employment/income, home renovation contractor issues, and overextending myself. It felt like the "perfect storm" hit all at once. I had perfect credit for approximately 15 years (since I was 18 years of age) with over $200K in available credit (credit cards), paid as agreed mortgages/auto loans, etc. The humbling experience of financial hardship truly was a test of my resiliency. My experience forced me to learn new skills in order to limit expenditures and improve my financial footing moving forward. Although I was a "responsible borrower" for many years prior to filing bankruptcy, I was not operating in a way that would maximize my financial future. Since filing bankruptcy I have not paid interest for anything except my original mortgage. Every bill is PIF to avoid interest charges. I repositioned my financial house to allow me to save approximately 40% of my monthly income by doing the following:

1. Leased my primary residence. This allowed me to decrease the amount of money I was paying monthly for a place to live while providing me additional income via the profit received from the rental payments.

2. Saved a considerable amount of money in the six months following filing bankruptcy and purchased a home that I own outright as my new primary residence.

My main focuses following my bankruptcy filng have been to limit my expenses, maximize my income, and utilize my savings to make investments that increasing liquidity/financial security.

Re: People with BK please comment

Anonymous — Tue, 13 Jan 2015 17:20:44 GMT

Combination of factors led to the BK.

1) In 2001, we overbought on a house we could barely afford. This basically required us to use almost all of our income just to maintain and resulted in us getting into credit card debt for the first time.

2) In 2004, I sold the house (basically a wash). And got a much higher paying job. But instead of getting rid of debt immediately, we took our time. We had $50k of credit card debt. By 2009, despite a 6-figure income, we only reduced it to $20k.

3) Most important, I lost my job in 2009. I was able to get temp gigs here and there, but ended up draining retirement and racking up debt to over $70k. I finally lost another job and realized that we couldn't survive under this huge amount of debt. So we filed chpater 7 in October last year.

Biggest change I would have made? Obviously, each of 1, 2, and 3 were fixable. We should have paid off our debt when I had a 6 figure salary.

More recently, I would have filed earlier. If I had filed for BK in 2009, we would have saved our retirement. We hated the "stigma" of bankrupty, without really knowing anything about BK. If I had learned about the truth of BK in 2009 or 2010, we'd be in such better shape now.

Re: People with BK please comment

Pway — Mon, 19 Jan 2015 18:51:00 GMT

I will share my story.

After loosing my job April 2014, I stayed a float for a while living off my savings, cashed in my 401k and pension to keep current on my bills. Then around in July of 2014 I was diagnosed with a rare skin condition and I could not work any longer, on top of having two main surgeries. I applied for disability denied the first time around and things went down hill from there. I lost my car and my bills I stopped paying because I had ran out of money. When I did receive my disability, and being sued by creditors I decided to file bankruptcy. It was the best decision ever.

Re: People with BK please comment

DaveInAZ — Tue, 20 Jan 2015 13:20:28 GMT

@Pway wrote:
I will share my story.

After loosing my job April 2014, I stayed a float for a while living off my savings, cashed in my 401k and pension to keep current on my bills. Then around in July of 2014 I was diagnosed with a rare skin condition and I could not work any longer, on top of having two main surgeries. I applied for disability denied the first time around and things went down hill from there. I lost my car and my bills I stopped paying because I had ran out of money. When I did receive my disability, and being sued by creditors I decided to file bankruptcy. It was the best decision ever.

Well, I've been avoiding telling my BK story as it's not very sympathetic. But with your post and AvengersAssemble's post describing how you went through your savings & retirement accounts before using BK, I'll fess up:

I wanted to retire early, longevity is not one of the stronger family genes - I only had one grandparent alive when I was born, my mother died at age 65 and my dad at age 68, only 3 years after he retired. In early 2005 I was 54 years old and living in Las Vegas, with real estate prices so crazy high I decided to quit my job & sell my house. I got 2.5x what I paid for it in 1999, $150k over my mortgage, so I was feeling pretty plush. I bought a 10 acre property in rural southern Arizona, paid cash as it was a foreclosure in need of a lot of cleanup and minor repairs. Got it all fixed up and applied for a mortgage in spring 2006, it appraised for more than double what I had paid for it, so again I was feeling plush. I did various self employment things to have enough income I didn't dip into my savings, including buying another foreclosure & fixing it up & selling for a profit, buying pallet loads of 30 day consumer electronics returned to retailers within 30 days,checking to see they worked OK and sold them as open box returns on eBay & Amazon, and installing satellite internet for rural customers with no other broadband options.

2008 financial crises brought my self employment biz ground to almost nothing. I had been putting the maximum amount each year into my IRA, and decided if I caan just make it to mid 2010, when I would be 59 1/2 I could start withdrawing from my IRA without penalty. I did odd jobs but income was not enough to avoid running up CC debt. By late 2009 I began to reconsider things. By then I was up to $60k in CC debt, and realized I'd be using much of my retirements accounts to pay it off and would problably still be trying to pay it all off when I reached 62 and qualified for early Social Security. So I began to research Ch 7 bankruptcy. Under AZ law the equity in my home would be exempt, my retirement accounts would be exempt, and my 2003 car long since paid off had a value that would be exempt. And I could keep my mortgage & home. I decided that if my early retirement was going to be successful, Ch7 BK was going to have to be a part of it.

So I lived off CCs until all maxed out in summer 2010, and I retained my BK attorney. He made me wait 90 days to file as I had been using checks from one CC to make min. payment to others, and those were considered cash advances and not dischargable if made 90 days prior to filing. File 9/2010, discharged 1/31/2011. So now I sit here 4 years post BK. My credit score is back over 700, I have no debt except my mortgage. I started receiving Soc. Sec. 2/2014 and have worked part time for the county since 3/2012. So, income is more than adequate for my modest needs. I enjoy the work I do for the county and plan to keep doing it for a long time, and having to get up & be at work by 8am 3 days a week helps me keep an active lifestyle. But I consider myself retired, and have been since 2005. The freedom is wonderful.

So, the moral of my BK story is that BK is not the the end of the world, it's a fresh start. But going through all your savings, especially retirement savings, is not a price you should have to pay. BK laws are written with those exemptions for a reason. To put it another way, the big banks made gobs of money giving mortgages to anyone with a pulse. Then when it caught up to them they came to the taxpayers with hands out, saying they were 'too big to fail'. I didn't think I was too big to fail, I just decided I was not going to fail.

Re: People with BK please comment

Anonymous — Wed, 28 Jan 2015 05:56:23 GMT

My story is slightly different, however I learned quickly to not help out or cosign for anyone anymore which is a simple yet easy conclusion to come to. Anyway, a person I was dating had a great dream of a business that was going to be helpful financially for both of us especially because at the time I was out of the workforce for almost a year because my father was very sick and his caregiver, plus my son was a toddler at the time. When I was finally able to work I had to take a minimum wage job and odd temp jobs just to make ends meet for almost 4 years. Anyway i found out later had a drug problem so he fell extremely behind on the business I helped cosign on for him. At this point BK was my only option because I had a lien on me that would not allow me to be able to purchase a car or home had I not paid back over $25,000 that I became responsible for because he never paid the bills. The embarrassment that I felt when the police came to my job to serve me papers stating that they were taking me to court was I describable and so awful to the point that I hid in the bathroom and cried after. It's actually funny though because my credit is better now after BK, and I learned a lot. The only thing that gets discouraging is being denied certain things bc of the BK especially knowing it was bc of the irresponsible behaviors of another person and me being naive. I'm currently going through hell just to get an auto loan bc on paper right now I don't make a lot and the stupid BK! It's frustratibg as hell and I'm impatient at times but I know I have a longggg way to go. Sometime the BK makes me feel like the woman in The scarlet letter story but I know that it shall pass 😑

Re: People with BK please comment

Anonymous — Wed, 28 Jan 2015 21:29:14 GMT

Don't mind sharing at all.

My husband lost his job in late 2008. I lost mine in April 2009. Delivered my first kidlet in July 2009 (you can imagine my job hunting prospects in the interim, ja?)

Anyhoo... ran out of savings in December 2009. Didn't find another job until June 2010... at less than 1/2 of what I'd been making pre-recession/job loss (actually... closer to a third). Tried to get caught back up on past due bills (CCs for husband, a large personal loan for myself). Gave up mid-2011, contacted a lawyer.

Filed Chapter 7, 3 years ago today. Discharged May 2012.

Husband got his first post-BK CC in August 2012 and we've been slowly rebuilding since. A total of six credit cards (one secured), asking for SP CLIs every six months. Small Share Secured loans with NFCU.

Getting ready to pull the trigger on a mortgage preapproval in mid-March.

Re: People with BK please comment

gdale6 — Thu, 29 Jan 2015 01:53:22 GMT

1st one - Being Young & Stupid

2nd one - business failure

3rd one - business failure and I let it dismiss...