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My Bankruptcy Journey (Updated 03-18-2019)

jjb0894
Regular Contributor

My Bankruptcy Journey (Updated 03-18-2019)

I’ve talked with some of you on this forum and I’ve decided to make a post about my Chapter 7 Bankruptcy case.
I will update this thread as things happen instead of making new threads.
On November 1, 2018 I officially retained my attorney and he started working on the petition after giving the paralegal all the information she asked for.
My bankruptcy arose because of a failed business endeavor.
I made a lot of stupid decisions and my business partner left me in the dust to pick up the bill and I just can’t service the debt anymore on my $23,000 income.
Here’s a breakdown of my debts:

USAA ($18,000 owed)/$18,000 limit
Chase ($13,000 owed)/$13,000 limit
Barclaycard ($12,000 owed)/$12,000 limit
Wells Fargo ($7,000 owed)/$7,000 limit
Citi ($6,500 owed)/$6,000 limit
PayPal Credit ($2,000 owed)/$2,000 limit
Military Star ($1,500 owed)/$3,000 limit
Discover ($1,000 owed)/$1,000 limit
US Bank ($1,000 owed)/$1,000 limit
Amazon Synchrony ($700 owed)/$710 limit

Total credit card debt: $62,700 (approximate)
Plus roughly $15,000 in student loans that will likely not get discharged.

As you can see, the debt isn’t serviceable on my income.
I’ve tried getting a second job but nobody has hired me.
I attempted a credit consolidation program and still could not afford the payments on that program.
Me and my wife decided that Bankruptcy is our only option.
Also, I know laws vary from state to state, I’m in WA State.
I will update you guys when our petition is filed.

Update (11-14-18):
My attorney called and the petition is ready to file! We just have to come in and sign! Once it’s signed and the automatic stay is on I will update you guys again.

Update (11-16-18):
We have filed, and now have a case number. We have a 341 meeting date (01-08-2019).

Update (11-18-18):
A Chapter 7 Bankruptcy Filing was added as a public record on my TransUnion Credit Report.
My score has somehow gone up 29 points overnight, which makes zero sense but whatever. Lol.
Also, something interesting, after the BK showed up on my credit report, some creditors blocked access to their websites to show the balance.
I think because they might view showing a balance as an attempt to collect a debt and they don’t want to violate the Stay.

Update (11-29-18):
It’s been interesting since filing. Haven’t really talked to my attorney at all except to send him my post bankruptcy credit counseling certificates.
It’s kind of interesting how quiet it gets when you file. My credit report is constantly updating with credit accounts status being changed to reflect that they’re included in bankruptcy, but it’s been super quiet, that’s probably the whole point of the Automatic Stay. Been getting a ton of solicitations in the mail from car dealerships offering to rebuild my credit during my Chapter 7 and some solicitations to do post BK credit counseling. No mail from creditors, which is kind of nice honestly.
My credit score has been fluctuating but right now it appears to be the worst it’s ever been at 413 (TransUnion).

Update (01-08-2019):
We had our 341 meeting today, the trustee asked about ten simple questions and we were in and out in a matter of about 30 seconds.
We should receive our discharge with no problems and have enough exemptions left to exempt our tax return.
No asset case and expected to receive a discharge in about two months.

Update (01-09-2019):
Report of no Distribution filed by the trustee this morning. The creators will get nothing and all my exempt assets will be mine to keep. I even have additional exemptions so my tax return will be mine to keep.

Update (02-07-2019):
Paid the remainder of the filing fee with my tax return (entered into PACER same day). Yes, I actually get to keep my tax return!
Got Capital One approval before discharge. $300 unsecured card. Probably not the best idea to apply pre-discharge but it is what it is.

Update (03-07-2019):
My finianfial situation has gotten much better without the burden of all the debt I was carrying.
Chapter 7 bankruptcy provided much needed relief for me. I am only 11 days out from my discharge. Just playing the waiting game at this point.
I have a new (pre owned) car that I paid cash for (with trade of my old car), have an unsecured Capital One Card already (already reporting on my credit as an open account) and I don’t feel like I’m constantly behind.
I will let you guys know when I have my discharge.

Update (03-12-2019):
The deadline to file objections has passed. No objections! All filing fees have been paid and the credit counseling and financial management courses have been entered into PACER.
I spoke to someone in the court and they said cases auto discharge two days after the objection deadline.
I will let you guys know if I get my discharge tomorrow or not.

Update (03-13-2019):
DISCHARGED! Order of Discharge entered in PACER!

Update (03-18-2019): Case closed!
Credit Obtained Since Discharge



Capital One Platinum MasterCard, $600 Credit Limit.




Indigo Platinum MasterCard, $300 Credit Limit




Chapter 7 Discharge: March 13, 2019


Home Loan: $120,000 30 YR Fixed VA Loan @ 3% APR
Home loan through Guild Mortgage
Message 1 of 39
38 REPLIES 38
FireMedic1
Super Contributor

Re: My Bankruptcy Journey (Not Yet Filed)

It isnt easy making the decision at all. On the bright side. Once DC'd. You'll have so much more $ to actually get the student loans paid off. Put some $ in a savings account. It isnt the end. Just the beginning. Recovery can happen. Takes time. My signature below is to show what can be done after BK.  Not to brag. It can be done. GL! Keep us updated.






My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC @ 540's.
Message 2 of 39
mspenny
Valued Member

Re: My Bankruptcy Journey (Not Yet Filed)

Fear Not! I did it with much apprehension and embarassment almost 5 years ago. But in doing it there was so much relief that things were dealt with once and for all (calls and worry stop). The awesome up side is that there is life after bankruptcy and it starts immediately after discharge. It is up to you to make the best of your second chance in the credit realm by making smarter, more responsible financial decisions and knowing your limitations. 


Message 3 of 39
jjb0894
Regular Contributor

Re: My Bankruptcy Journey (Not Yet Filed)

I think I learned my lesson.
I’m probably gonna be scared of debt for a while, which isn’t a bad thing.
Credit Obtained Since Discharge



Capital One Platinum MasterCard, $600 Credit Limit.




Indigo Platinum MasterCard, $300 Credit Limit




Chapter 7 Discharge: March 13, 2019


Home Loan: $120,000 30 YR Fixed VA Loan @ 3% APR
Home loan through Guild Mortgage
Message 4 of 39
jjb0894
Regular Contributor

Re: My Bankruptcy Journey (Not Yet Filed)

I will keep you updated!
It’s been kind of a mixed bag of emotions really. I’ve been very nervous for the 341 meeting. Thinking of little details that the trustee might ask about that could sink my case. My lawyer keeps telling me I have absolutely nothing to worry about, and that he knows the trustee and what he will ask and what he usually does. He said he could count on one hand how many times he’s taken assets.
Also, kind of funny that the place they do the 341 meeting is directly across the street from the Wells Fargo. Lol. I don’t think someone from Wells Fargo even cares enough about a $7,000 debt to even show up.
When I told Wells Fargo on the phone I had an attorney for my BK so that they’d stop calling me to collect, they were super nonchalant about it. The guy on the phone was even like “Well, I was gonna see if we could work out a payment plan, but if you’re filing Chapter 7 there’s no point.” And chuckled.
Credit Obtained Since Discharge



Capital One Platinum MasterCard, $600 Credit Limit.




Indigo Platinum MasterCard, $300 Credit Limit




Chapter 7 Discharge: March 13, 2019


Home Loan: $120,000 30 YR Fixed VA Loan @ 3% APR
Home loan through Guild Mortgage
Message 5 of 39
jjb0894
Regular Contributor

Re: My Bankruptcy Journey (Not Yet Filed)

My credit is already more or less trashed. It can’t get much worse than it already is.
As I keep checking it, more and more banks are reporting delinquencies.
That’s the biggest reason I decided to file also because even if I went absolutely insane paying these debts and took like three additional jobs, it would probably still take several years and my credit wouldn’t really recover until these accounts are taken care of.
My family supports me in my decision to file (not that they have a say unless they want to write my creditors a check, lol.) and my brother said I should’ve filed months ago. The biggest thing stopping me was I felt bad for borrowing money and not paying it back. I felt a moral obligation to pay.
Credit Obtained Since Discharge



Capital One Platinum MasterCard, $600 Credit Limit.




Indigo Platinum MasterCard, $300 Credit Limit




Chapter 7 Discharge: March 13, 2019


Home Loan: $120,000 30 YR Fixed VA Loan @ 3% APR
Home loan through Guild Mortgage
Message 6 of 39
mspenny
Valued Member

Re: My Bankruptcy Journey (Not Yet Filed)

You cant stop a hemorrhage with a bandaid. Your brother is right. And, as you can see, there are so many of us who were, not so long ago, where you are. So forgive yourself, do it now, and start the new year fresh. Good luck. Choose your credit offers and spend wisely during your rebuild.  


Message 7 of 39
jjb0894
Regular Contributor

Re: My Bankruptcy Journey (Not Yet Filed)

I’ve been amazed how nonchalant some of the credit card companies are when they call me and I tell them I have an attorney for BK.
The representative for Wells Fargo even chuckled and was like “Well, I was gonna see if we could work out a payment plan but I guess that doesn’t matter now.”
The only ones who were rude about it was Discover.
Credit Obtained Since Discharge



Capital One Platinum MasterCard, $600 Credit Limit.




Indigo Platinum MasterCard, $300 Credit Limit




Chapter 7 Discharge: March 13, 2019


Home Loan: $120,000 30 YR Fixed VA Loan @ 3% APR
Home loan through Guild Mortgage
Message 8 of 39
ScooterMcDoodlebutt
Established Contributor

Re: My Bankruptcy Journey (Not Yet Filed)

I understand how how feel. I also had a failed business, and lost my house of 16 years as a result. I also burned a longtime friend who loaned me $10k to keep my business going by including him in my BK. I am still going to pay him back someday, but at the time I had no choice but to include him. Bankruptcy is a business decision, plain & simple. It took me a long time to get past that, as I felt a total failure to my wife & kids after losing the house. Once your case is discharged you can start over and hopefully never repeat the mistakes that got you into your current situation. Good luck!







Message 9 of 39
jjb0894
Regular Contributor

Re: My Bankruptcy Journey (Not Yet Filed)

I did some number crunching.
Long story short, BK is the shortest and most logical way out.
Debt Breakdown

Credit Card Debt
USAA: $17,885
Chase: $12,842
Barclaycard : $11,644
Wells Fargo: $7,097
Citi: $6,190
PayPal Credit: $2,096
Military Star: $1,378
Discover: $990
US Bank: $978
Amazon Synchrony: $658

Total Credit Card Debt: $61,658

Student Loan Debt
Federal Student Loan - Great Lakes: $2,767
Private Student Loan - Wells Fargo: $12,884
Total Student Loan Debt: $15,651

Total Debt: $77,309

Income:
Dominos:
$23,920/year (increasing to $24,960 next year)

Washington State National Guard:
$6,070/year

Total Income: $29,990/ year, $2,499/month
These figures are before taxes and normal payroll deductions.

Difference Between Income and Debt:
-$47,319

If I were to take a second job at the same rate as Dominos ($29,990/year) and add it to my income, I would make $59,980.
This would place me into a new tax bracket.
Assuming I paid zero taxes on the new $29,990 in income and we’re able to apply 100% of it to ALL the debt, I would still not be debt free for about 2.5 years. This assumes no major or unexpected extra expenses came up.
This would be 30 payments of $2,577.
The reason why I would only apply $29,990 instead of the entire $59,980 is because the current income I have is not enough to live and service the debt, so I’m already living above my means.

Chapter 7 Bankruptcy will allow me to rebuild my credit in a shorter amount of time and allow me to spend that 2.5 years saving money rather than making payments.
Even if my wife had a 20 hour a week job on top of me working 80 hours a week, this would still only only take a few months off this timeline.
$12,480 in 2019
$14,040 in 2020
$26,520 over 2.5 years or an additional $884/month.
$2577 + $884 = $3,461 = 22 months.
This would only reduce the total time by eight months.

Conclusion:
I am mathematically insolvent. Mathematically, Chapter 7 Bankruptcy is the most logical option in my situation.

Margin of Error:
Washington State Minimum Wage is increasing to $12.00 in 2019 and $13.50 in 2020.
These wage and repayment estimates do not take the inimum wage increase into account.
The difference in 2019 would be $1,040.
The difference in 2020 would be $2,080.
The total difference would be $3,120.
Add an additional $1,040 to cover the additional six months of this hypothetical payment plan to get $4,160 or just $139 a month for 30 months. This also assumed that 100% of my $22,990 income is tax free, which would not be the case.
Credit Obtained Since Discharge



Capital One Platinum MasterCard, $600 Credit Limit.




Indigo Platinum MasterCard, $300 Credit Limit




Chapter 7 Discharge: March 13, 2019


Home Loan: $120,000 30 YR Fixed VA Loan @ 3% APR
Home loan through Guild Mortgage
Message 10 of 39
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