Making the decision to file personal bankruptcy (prepare for long post)

[momof2inPA]

Could you get a low interest credit card and transfer your balances? Then you could just work on that one payment each month.

There is a financial guy on the radio, Dave Ramsey, who recommends paying off your credit cards from smallest amount of debt to largest to avoid bankruptcy and debt consolidation, so you wouldn't totally ruin your credit rating.

Also, I would not only put off the Disney trip until all payments were current, but also until you have paid off some of the debt that you have accumulated. Otherwise, you will be one bad month away from getting youself into the same situation.

Best of luck.

 

[Crankyshank]

So because I took a part time job to pay off some of my debt in order to avoid losing my possessions and the roof over my head, that means I don't love my family enough? sorry I don't buy that.


People who I am very close to are suffering the consequences of declaring bankruptcy. As I stated before, my best friend filed 10yrs ago and still can't get a car loan or a mortgage because of it. He rues the day he took some bad advice and filed instead of working harder to pay off his bills and calling his creditors to see if he can work something out.

10-20 hrs a week of a part time job temporarily isn't going to make or break your relationship. If it is, then it's not that strong to begin with.

This is a really major decision and you've gotten tons of great advice. Good luck to you.

 

[AirForceRocks]

You have an obligation to pay for the things you bought on those credit cards.

My sentiments exactly!!! Obviously there are situations where people can't help getting into debt, such as medical emergencies, etc. But just going out and buying and buying and buying on credit, all the while knowing that you are in over your head isn't a mistake. It's irresponsible behavior, and the rest of us shouldn't have to pay for it.

 

[Melora]

Hi..

I did not read all thorugh the posts so please forgive if I repeat or say something that has been gone over already.

When I met Dh he had a huge debt load. It got to the point that the interest was killing us. We went to a debt consolidation service (a reputable one whose name I cant remember off hand ..if you need it PM me and I will find it).

They consolidated all of our bills and cut the interest down to almost nothing. We made one monthly payment which was MUCH lower than the regular.

It did nothing to our credit report (barring the late charges we had just started to incur). We ended up paying it all off after we got a huge chunk of money but before that happened it was such a relief to cut out the interest and lower the monthly payment.

Before anyone says that it DOES affect your credit, we have bought 2 houses since then and have gotten low interest loans that you can only get with excellent credit. Our credit scores are very high.... (But we did it before we were deeply in trouble.... before we had bad marks against us opn our credit file, except those couple of late pays.... On our credit report it never showed anything except that we continued to pay off each card. Then it showed that we were paid in full when we paid it all off at once.)

You have to make sure the company you go to is reputable.

The other point (sorry if its been made) is that you still have to pay your bills when you declare bankrupcy if you want to keep you belongings. You don't just do it and suddenly not owe anything. With the debt consolidation it shows nothing on our credit except that we paid off what we owed. (The couple of late pays are numereous years back and now dont affect us.)

 

[Michelina]

I don't understand how being responsible for yourself could ruin your family life. Of course money should never take precidence over your family but many people work very, very hard to acheive success and have strong families. If one has children I would think that sets a good example to them that you have to work for what you have and sometimes times are tough but a family pulls together to get through it.

 

[Beauty]

So because I took a part time job to pay off some of my debt in order to avoid losing my possessions and the roof over my head, that means I don't love my family enough?

I don't believe I said that. What I said was that if you have to take 2 and 3 extra jobs for an unlimited amount of time which causes problems in your family then it is not worth it. I also said that if a 2nd job could help pay off the debt and get a person back on track in a short period of time then I would definatly be for it.

Like I said I have been in this business my entire adult life. I see what goes on and I have seen family after family and marriage after marriage RUINED because of financial problems and IN MY OPINION its not worth it.

Yes you made the bills, yes you owe them and yes you SHOULD pay them but not at the cost of your health or your family. Nothing is worth that...thats all I'm saying. Bankruptcy should never be the easy way out, credit counseling should definatly be sought....BUT once everything has been looked into and there is still no light at the end of the tunnel then Bankruptcy is the answer, and if a person is forced into it they shouldn't have to feel like they have done anything immoral or shameful....they have done what they HAD to do to survive.

Oh and speaking of the roof over your head I have also seen many homes lost due to unpaid bills. Let me be a little more clear about what I did. I was a loan packager for farmers down South. Loans of hundreds of thousands of dollars. When farming bottomed out and prices right along with them because the U.S. is getting their cotton, soybeans etc. imported instead of staying within the U.S. then I saw people who were once very well off go to having absolutly NOTHING in a matter of two or three years. The only way to live was to use the credit cards. I have seen men cry because they couldn't figure out a way to keep their homes or to keep their children in the same schools that they went to their entire life. I have seen marriage after marriage ruined because the father/husband was trying so hard to keep OUT OF BANKRUPTCY that he forgot to take the time to spend to show his family they were important.

I have also seen homes repossesed and families move into apartments when they had lived in nice big homes and you know what, they were happier in that apartment, why? Because they didn't have to worry about where the next mortgage payment was coming from. They had a roof over their head and they could pay their bills which is really all any of us want to do.

I'm not trying to say anyones way of dealing with financial problems is wrong. To each his own. I'm simply saying what I have seen money and financial problems do to some of the nicest most hard working people you would ever want to meet in your life. When it all boils down to it, it simply doesn't matter....there is not 1 dollar or 1 million dollars worth losing your marriage or missing the time with your children.

None of us are promised tomorrow, why spend today worrying about money? Do something IMPORTANT. Go outside and run with your child, play hide and go seek with your spouse (Really fun!)

I'm sorry the world today is just to Politically Correct and to focused on things that won't really matter if we die tomorrow. If you die tomorrow and you still owe that bill the creditor will move on to someone else to call, but if you died tomorrow what would your wife or family do.

I just don't think the focus is on whats really important anymore.

 

[AirForceRocks]

Beauty, the examples that you gave about the farmers are perfect examples of situations that are out of the control of the debtors. They didn't do anything wrong to cause their problems, circumstances just occurred.

The same can't be said for people that knowingly and voluntarily get in over their head and then want out from under it with little or no consequence. I think that those people should feel shame at what they've done to themselves and to their families.

If the sanctity of the family is so important to them, then perhaps they should consider not voluntarily getting themselves in so deep.

 

[Bojangles]

I'm sure everyone understands the situations of the farmers or the workers that have lost their jobs and were unemployed long term. It is, however hard to drum up sympathy for people that run out buying clothes, nice cars, the newest electronic gadgets and taking expensive vacations on credit that say "oops..." when the bills pile up.

 

[Blondie]

If you declare bankruptsy, you will not be able to get a mortgage for years and when you do, you will be paying much higher interest than people with clean credit reports.

It must vary state to state because I know of someone who filed Ch. 13 in 1990 and bought a new home 3 years later, and with the current market's interest rate. He had to get some kind of permission from his Ch. 13 trustee (which wasn't a problem) and after that, all was fine. Since that time, he has bought 2 new vehicles, and not at higher interest rates either. I'm not trying to glorify bankruptcy by any means. But it isn't the end of your credit life.

 

[Beauty]

The same can't be said for people that knowingly and voluntarily get in over their head and then want out from under it with little or no consequence. I think that those people should feel shame at what they've done to themselves and to their families.

Oh I agree with you 100 percent! There is a family in this town that EVERYBODY knows by name. Just their name is enough to make people not want to do business with them. They live to go bankrupt. Mississippi is definatly not the smartest state, heck its probably the stupidest and credit here is not hard to come by. These people go Bankrupt every 7-8 years. They then live high on the hog until they can go Bankrupt again. There should be laws out there for this type behavior.

I also agree that its to easy. I've heard young people say Oh if I run up debts I'll just bankrupt them, or even go out and fill up the limit on a Visa before filing.

The laws should definatly be tougher concerning Bankruptcy especially a 2nd one not to mention the 3rd, 4th whatever. My main point is IF you have excersied every available avenue and there isn't a light anywhere in sight, don't kill yourself and your family trying to work it out when its just not going to happen. Again back on the farmers, they would try to sell anything and everything to keep from bankruptcy but then when the inevitable happened and they were forced into it I have never seen more relief.

 

[Blondie]

I also think people shouldn't get off so easy, but what is the solution? Drag them through the streets with signs on them to humiliate them in front of their family and friends? I would think that having to go to court and file is humiliating enough, maybe for some it's not.

Nothing's going to change with the "I'll run it up and file bankruptcy later" attitude until the laws are changed. They need to make it harder for people to file. I thought I had read something about that last year, but I never saw any follow through on it.

 

[Pongo69]

People filing chapter 7 get a clean slate , but they get to keep nothing ( unless the creditor decides not to reposses )
People with assets must file chapter 13 , they must have a job and pay back the creditors through a court appointed trustee.
Financial situations happen for many reasons, and nobody should ever say this is not going to happen to me, I have seen big towers fall.


__________________

I agree with you 100percent. It is so easy for people to sit back and say what they would and would not do.Noone knows what tomorrow will bring into their lives. If bankruptcy is the route you have to go than so be it. YOU have to do what you think is best for you and your family. People give advice to you but they are not the ones who are up at night stressing about the situation your in. Again do what you feel is best for *YOU*
As far as getting credit again, depending on where you live you can get credit the same year you file rather it be a car or home. YOUR CREDIT WILL NOT BE RUINED FOR LIFE so don't fret about it. I know it's a tough decision to make and with the advice that comes your way remember one thing, your the one who is going thru this and your sanity is what's important. If it's easier for you to file bk and have a piece of mind than do so. Your not causing me or anyone else to lose out on anything.

Whatever you do don't let the words of others make you feel any less of a person. Remember noone is perfect-we all make mistakes
Goodluck

 

[crazelion]

1. Pay off the smallest credit card bill first.

2. Stop eating out for lunch and dinner. Brown bag lunch.

3. Start paying the a dollar extra on the credit cards then the minium payment. It may not seem much at first but you will start to see a difference.

4. A tip for paying Christmas presents that I stand buy. Put in the layway at Wal-mart in September for Christmas and set a budget and stick it. Laugh if may. But I did not charge a Christmas present this year on a credit card because I put in the layway. Have not charge Christmas present in a long time.

5. Set-up a entainment budget each month. Do not go to first run movies. Go to the second run movies to see it at decent price.

6. Set up a monthly budget and stick to it.

7. Set up paychecks for direct deposit so won't have cash in your hand. I found if I have cash I will spend can't tell where I spend it.

I have not been that must credit card debt because I learned in high school how to handle money. Also coming for a poor struggled family makes you realize that you can't have everything you won't.

If wondering I have one outstanding credit card bill which is Mastercard it's 400.00. That is only because I need my car fix to get backfore to work. It will take me two months pay off the credit card. But it's the only bill I have. The only reason it will take that long is because they cut my hours at work.

Start lively cheap. All my friend and family tell me I am the cheapest person a live because I don't use credit cards anymore unless I have to. They is the ones worry about debit and I am not.

I love my Visa debit card to death. That is the best thing since slice cheese.

 

[swea_pea1]

Darlene9947,

I just PM'd you recipes for 5 cheap and easy meals. Had to send it in three different PM's because they were too long.

Let me know if you try any of them and enjoy!

 

[Bojangles]

Originally posted by Pongo69
Your not causing me or anyone else to lose out on anything.

Oh? So all of this credit card debt that gets wiped out is "free money"? No, those of us that pay our bills every month pay extra for those that don't...in higher prices or interest rates.

 

[Pongo69]

Originally posted by Bojangles
Oh? So all of this credit card debt that gets wiped out is "free money"? No, those of us that pay our bills every month pay extra for those that don't...in higher prices or interest rates.

Wow whats with the rolleyes. Maybe it's just me but it's really childish. Anyway I wasn't referring to the company where the bills are due.(I know they lose out) I was referring to people who try to make a issue out of other people hardships and feel that their lives are affected by it. I pay my bills just like the next person, and if someone has to file bk and honestly I don't care how many times they do because it's really no concern of mine, NO I don't think it will effect me one bit.

 

[Lanshark]

There are circumstances out of our control. Medical, loss of job are some. Bankruptcy should be reserved for those occasions.

Overspending is not one. When someone files bankruptcy everyone else pays for their overindulgence. Work with someone to restructure the debt and pay it back. Creditors would rather get cents on the dollar than have to write the whole thing off. Make sure you explore every option before taking this step.

 

[chell]

Originally posted by ZachnElli
My dh had to file bankruptcy 13 years ago. It stays on your record for 10 years, not 7.

Has this changed in recent years? Or does it vary by state? I know that in NC not very long agon Chapter 13 was on your credit 7 years, not 10.

You should check with your state laws to see how long it will stay on your credit.

Still sending you the best of luck!

 

[Beauty]

No, those of us that pay our bills every month pay extra for those that don't...in higher prices or interest rates.

I don't totally agree with this either, there is ALWAYS going to be a Credit Card, Finance Company or Bank battleing to get your business by offering low and no interest loans especially if you have excellent credit.

The people who pay are the people who have filed bankruptcy and/or have bad credit, they get the higher prices and interest rates which is the way it should be until they can prove their credit worthyness again.

 

[Desnik]

I don't know about other states. I know in NY bankruptcy stays on your credit for 10 years. It counts against your credit score for 7 years. So, after 7 years creditors will see that you had claimed bankruptcy, but it doesn't count against your score.

When DH and I started dating his dad had passed away 2mo prior. His dad had no insurance, a ton of bills and DH had to take on the burden.(long story) He was living on his own, struggling working 2 jobs and going to school. He had accumulated a bunch of medical bills, as well as having a car he couldn't pay for. I remember he would eat a bag(25 cent bag)of doritos for dinner. He would only have enough money to get $2-3 of gas at a time. My parents and I couldn't take seeing him live that way. His family turned their backs, including his mom, she took care of his younger brother. Anyway, my parents redid our basement to make a room for him and let him live with us.
At this time his bills were overwhelming. Not one of them was a credit card bill. Mostly Dr. bills. He saw no way out of it and after much thinking he decided to claim bankruptcy.

He had no assets. He voluntarily surrendered his car. He was able to claime bankruptcy on all the bills. He was able to choose which ones, he didn't have to claime them all. He decided not to claime his student loan. He didn't have to pay the attorney because he proved he had no money, so I don't remember the specifics, but the attorney was paid by the state? Not sure. Anyway, he immediately started changing his life. He got a good job with benefits and we got married. Within a year he financed a new car. Even with bankruptcy. The rate was alittle high, but he was still able to get it.

He has since had 7 cars, some financed some leased. We have purchased 3 homes. The first home we purchased did have a higher interest rate than was the going rate at the time. We didn't care, we just wanted the house!! Now we got a super low rate on our mortgage.

To this day we each only have 1 credit card with a combined debt of $400. DH still has a small student loan. We don't charge, only pay cash. Luckily DH makes a really good salary.
I guess my point to this long story is that sometimes people don't have a choice. Bankruptcy doesn't have to be the end of your life or relationship. My DH's bills put alot of strain on our relationship because DH had it hanging over him. We know we will never do anything to put us in that perdicament.

Personally, when I was right out of HS I racked up alot of credit card debt being stupid and clothes shopping. My dad paid it all off and of course I didn't learn my leason and charged them up again. Then I did a debt consolidation and paid them off. That time I learned my lesson. Bankruptcy was not an option for my stupidity.

I do know for a fact that continuously late bills bring your credit rating down drastically. DH had the exact name as his dad and his dads bad credit was on his report. It took us 3 years to get it taken care of showing different SS#'s and death certificates.

Finally my advice to th OP is do what is right for your family. If you have to claime banckruptcy, you shouldn't be planning a trip to WDW. If you have the money for that use it instead to pay your bills. Try everything else before you consider bankruptcy. Try debt consolidation. Throw away all credit cards but 1 major one. Alot of credit cards also brings down your credit score. Why won't you take all of your income tax return and pay off your debt. Don't be late again on any of the credit cards or car loan payments. You will encure late fees, over limit fees and dig a bigger hole. Pay alittle over the minimum. Never mind getting current, get debt free. Personally I couldn't go on expensive vacations such as WDW until I got rid of my credit card bills!
Please don't think of bankruptcy as a quick fix. It can help but, you need to make changes in your life so you are never in this situation again.

OK let the flames begin!