finances looking bleak--anyone here filed bankruptcy?

[Rock'n Robin]

Well, DH talked to his lawyer today. His company is going under and unfortunately, since I cosigned on one big line of credit, we will both have to file bankruptcy to save the house. At the time the business was doing well.
I really didn't want to do this because I have a good handle on our home finances. We have some money coming in over the next 6 weeks (tax refund, sold a billboard on Dh's property) and I was going to use it to pay our credit cards completely off. Now if we wait for that money time will run out on us.
I have all kinds of questions--what about small balance cards, like Kohls and Lowes? Can I just pay those off? I guess I won't have a Disney Visa to use anymore--how do you pay for trips without credit cards? Can you even get a rental car or a plane ticket? It doesn't really matter, I'll give up all the trips to save the house. If we have to liquidate the DVC points it will be a moot point anyhow.
Also we just got a camera at Circuit City with 12 months no interest--will that have to go back, or do we still have 12 months? Lowes is also 12 months same as cash but I only have about $270 on it.
To make matters worse I just put $1500 in my new checking account, transferring $1300 from a credit union--but found out later that I can't use that money for 5 business days because it was a check! That money was going to pay some bills. They won't be late, but next week is back to school, 2 open houses....I wanted to do it tonight. I should have just taken cash out of the CU.
So throw us some PD and prayers--DH is pretty low, and was thinking about starting up a new company but I flat out told him that right now I need a steady paycheck from him, so he'll have to go out and sell for someone else. Maybe someday when things are back to normal.
Robin M.

 

[ziggystardust]

I can't really answer your questions. I just wanted to wish you some luck.

A friend of mine, we went to Disney with her and her family last Aug. Her husband had filed for bankruptcy b/c of a failed business. They have no credit cards but were able to use their visa check card for everything. They had all of what you mentioned - plance tix, rental car, hotel, park tix, dinner every night. They were able to manage. He's been working for the last couple of years for another company to get back on his feet, and now hes starting up his business again. So its not the end of the world.

I hope everything works out for you and your family!

 

[MosMom]

Can't you file bankruptcy regarding just the business? I really have no idea how these things work but is that a possibility? Were you a LLC? If you were, I don't think they can come after your house. Like I said, I don't know much but I wish you the best regardless.

 

[doxdogy]

Sent you a pm.

 

[Rock'n Robin]

We could just file regarding the business, but the credit line I signed on is $125,000 and the bank has called it in within 30 days. Of course of all the things I sign on it has to be the biggie! So I'm in on it too.
One more question, what about medical things? I owe $77 a month to DD#2's orthodontist until next spring. I sure don't want them stopping her treatment! I guess I can just pay them anyhow.
And how do you pay places like AOL and XM without a credit card, is that what a secured card would be for?
Robin M.

 

[Crankyshank]

Do you have account protection on any of your credit cards?

I would give your credit card companies a call. Explain the situation and see if there is something they can do to help you out. My DH was laid off last year and I called my cc's and most of them told me they can freeze the account and defer payments for 6 months.

If that's not the case, I would pay off the higher interest rate ones first. See if you can transfer remaining balances to one card. I would totally push back any thoughts about Disney/future trips and just focus on the immediate future.

Cut down on all of your expenses. see if you can sell some stuff on ebay. Are you working currently? Have you spoken to a lawyer or legal aid for advice on ways to avoid bankruptcy? Good luck! And seriously- the first calls you should make are to your credit card companies and your mortgage. If you are up front with them, I am sure you will be surprised at how accomodating they are

 

[Rock'n Robin]

We can avoid bankruptcy if we can come up with $125,000 this month. I sold some stuff today, which is where I got the money I put in the checking.
I do work--I teach HS. I don't have CC protection because I pay all of my cards on time and more than the minimum amount. I have never missed a mortgage or car payment. The trouble is with the business payments.
I've cut where I can, but this has come up pretty quickly--we knew the business was in trouble, but we didn't think I'd have to file until today. And it seems pretty unavoidable unless I want to lose the house.
To everyone with your own business in this economy, good luck!
Robin M.

 

[RitaZ.]

No advice to offer, just hope that you can work things out.

 

[Cindy B]

First off take a deep breath.

I'm sorry to hear about your situatuon
.
Can you do some tutoring on the side? Whether private students, or even a place like Huntington Learning Center or Sylvan.

You could also do a SAT prep course with vocab.. are you a HS liter/Lang Arts teacher?

Can you sell things? Do you need to liquidate the DVC? or put it on a resell? (Hate to imagine, but desperate times call for desperate measures)

Your DH is a contractor, right? Can he work with any other companies? Can he do side jobs as well?

I work in a school too, and I HATE being poor in June July , August and part of September. We time our Ebay sales for June July and August. =a bulk of our sales are during this time (coincidentally I make more on Ebay those months than I do at work)

DH is also talking about taking on extra shifts for Xmas money.

 

[BedKnobbery2]

Robin, it sounds like you really need to talk to a bankruptcy attorney. They will be able to answer all your questions, and address issues you may not have thought about yet. Most will charge you for an initial meeting--usually around $100 or so per hour, and it should be prorated so you only pay for the time you use--and can give an idea then of the total cost for your bankruptcy. I know it seems ludicrous to take on another expense when you are on the verge of bankruptcy, but the laws are very complicated, and many lendors will try to take advantage of a consumer's ignorance. It is better to have legal protection.

Best of luck to you.

BK

 

[Crankyshank]

I do work--I teach HS. I don't have CC protection because I pay all of my cards on time and more than the minimum amount. I have never missed a mortgage or car payment. The trouble is with the business payments

That's really great But CC protection is to protect you in case you can't make future payments in case of financial distress due to illness or loss of income. It's what kept DH and I from losing our house when he was out of work.
Can you pick up a part time job or do some tutoring after school? Have you spoken to a bankruptcy attorney about this?

 

[Cindy B]

Take care and cancel all uneccessary things.

Suspend Directv/cable.
Get movies from the library instead of Blockbuster
Cancel any and all magazines, or monthly things like cable, netflix, etc.

$125K is hard to do within a month.

 

[mmexpress]

Ok,
Number one... You don't want large sums of money in the bank or in stocks, mutual funds etc...and if you make any large transactions ie, withdrawls or payoffs and such you'll want to wait 60 days before filing chapter 7 or 11
If you have a credit card with a zero balance pretend it doesn't exist til after the bankruptcy has been discharged.

You also must be able to show hardship to qualify for personal bankruptcy,
you can't be up to date with financial obligations.

 

[Rock'n Robin]

We couldn't do that much in a month if we sold everything we had.
DH talked to his regular attorney today who recommended a bankruptcy attorney. He will meet with him within the next few days. I will give him a list of my questions since I go back to work Monday.
Starting at the end of September I will go in early every day and tutor career and tech kids who are failing English--I get $21 an hour for that--but it can't start until the first set of midterms is out so we know who is failing. DH may pick up some side work, but if he goes to work selling for another contractor he will probably have to sign a Non-compete clause.
I have to see about cable--in March I signed up for a deal to cut my cable modem bill in 1/2 but the kicker was agreeing to keep the cable company for a year. I don't know if I can get out of that one. (a competing cable company came in, which I didn't know about until I had signed the deal--they just wanted to keep their customers). My magazines are almost all expired because I get my magazines in the fall when my kids sell them.
I do worry about the kids, and I am hoping that if we do file I will still be able to give them dance class, piano, etc.--that is why I have been doing the extra tutoring anyhow. I also signed up to be commissioner for DS's soccer age group because that way they get soccer for free. I don't think they should have to suffer--they already know to look for sales and that we always go to the resale shop first. Tomorrow I am going to go to my school CC and take out the little "kitty" I save during the year for school fees, pictures, etc.
Robin M.

 

[HisEllyNelly]

We just filed in the spring and it was just discharged in July. I have no advice but to see a bankruptcy attorney. They arevery understanding and can tell you all your options. I was mortified to do it, but ours was wonderful. Good luck!

 

[Cindy B]

Originally posted by Rock'n Robin

I do worry about the kids, and I am hoping that if we do file I will still be able to give them dance class, piano, etc.--that is why I have been doing the extra tutoring anyhow. I also signed up to be commissioner for DS's soccer age group because that way they get soccer for free. I don't think they should have to suffer--they already know to look for sales and that we always go to the resale shop first. Tomorrow I am going to go to my school CC and take out the little "kitty" I save during the year for school fees, pictures, etc.
Robin M.

You might be able to barter for some of the "extras". Maybe tutor in lieu of piano lessons., or just suspend them for now.

My kids know that we aren't rich, and my son helps with his own oboe lessons. He's 9, but he is in charge of the reeds he uses. If he breaks them, he needs to pay for his own. We do the lessons and equipment rental. He does the reeds (the are $4.25 each online/$10 at the music store)

My daughter doesn't like anything like sports or cheerleading. I would barter with someone to do something she likes. Sh eis thinking about taking up the flute. My neice is outgrowing her flute, so we will buy hers. (cheaper than oboe!)

 

[pkasbohm]

no advice--just wanted to wish you luck!!!

 

[jipsy]

Alright, color me stupid but I am really confused.

When you say you signed for the big line of credit, was it a personal guarantee or did you put the house up for collateral? I guess I just don't understand why you are going to lose your house if you signed for a business line of credit...

There are lots of different types of bankruptcies. It is possible to declare bankruptcy only on certain debts and not on others. You really need to speak to a good bankruptcy attorney fast.

 

[mudnuri]

Okay I'm a bit concerned...

First the loan you singed for was for 125K? Well, why/how are you having to pay that THIS MONTH? Thats the part thats missing from this picture for me.

Now for a bit of advice for ANYONE who is thinking or has a business PLEASE PLEASE PLEASE use an LLC....Limited Liability Corporation. Basically what this means in laypersons terms is that if the corporation goes belly up nothing of personal assets is attached to pay debt.

DH and his family own quite a few businesses and have bought/sold more than I can count...EACH and every time any of them have been in on a business, it has been a LLC.

We have/do loans from owner, if the company needs money for instance, we will take some of our stock or cash, or even take out a personal loan, and loan it to the business, however, this is done on a short term, to float the business through a slow period, not to carry a business that should/could fold.

I wish you the best of luck, and I STRONGLY urge you to contact whatever financial institution you have this loan through. I can't imagine that if you worked out a payment plan with them, on a personal side, they would not accept it, after all, they gave you the $$ in the first place. They don't care where you got the money, they just want it back.

Now, this might not sound like a good idea but those credit cards your using and have a balance on...pay the minimum and only the minimum until this debt is paid in full. No more anything....no charging nothing...this debt must come first. (of course, your kids dental expenses to as well...but nothing misc.)

Good luck with this, but I'd do everything in my power to NOT enter into any bankrupcy proceedings, thats going to haunt you for a very long time...!!!

I'd also consider selling the DVC, or at least renting your points for a few years (I know, thats not the favorite thing to do)...but if you get enough to cover the maintenance, and whatever else you owe, plus bank some $$$ its worth it.

Brandy

 

[Rock'n Robin]

OK, let me try to clarify....
DH's corporation is supposed to leave me out of things. I think it is an S corp. However, 2 years ago to consolidate some things and save the company at that time, he refinanced the building and the credit line. I signed on both of those and the house is collateral. Things improved for a time after that but this winter was awful. He sold a lot of jobs in spring and summer, but the money coming in goes to pay off the bills--there is no savings and he hasn't paid himself much these last months, so the savings at home is minimal as well. He knows that when it slows down this winter, especially if it is like last winter, the company will not make it through the winter.
The building is for sale currently. He has been having problems paying the credit line on time and the bank has called in the loan, which is why it is due in a month. It is kind of the last straw to holding out against bankruptcy. I will do whatever we need to do to not lose the house, and then have trouble buying another one in this district for credit reasons. I have already contacted Jaki at one of the timeshare places about how to sell our VWL points.
He is calling the two attorneys recommended to him tomorrow morning--I just hope they can see him right away, time is ticking.
I want to thank everyone for their advice, I am really touched by all of the help and advice offered--this is a really trying time for me, and it's not as if I can discuss it with my 12 year old. I'm glad you're all here!

Robin M.