It's been a month or so since I found this board, and I thought I would post our situation, start to finish, and with as little emotion as possible, for any unwitting or bored people who might want to read it.
I posted originally when I joined the board, but now realize that I was buried in a firestorm of emotions, rage and frustration. Not to mention embarrassment. My original post reads like a mixture of Danielle Steel and Stephen King but with the drama of a summer blockbuster apocalypse film. I guess that's what you get when you shoot from the heart and pour your soul out for others to see-and hopefully not judge.
Here goes:
Three years ago I hired a manager, who makes a percentage of my income for bringing me new work.
The manager not only brought NO new work, he took his percentage (15%) of my existing work as an independent performer/entertainer. My occupation is not particular interesting, and I am not someone you would recognize on the street, though if you live in the United States, you probably know me, if not by name.
The manager also was supposed to renegotiate my existing contracts and get me better terms and higher payments. He renegotiated, all right. Now his OTHER performers have my old contracts, with better terms in some cases, lesser in others.
End result: My income dropped from 450k per year to 120k per year. Meanwhile my expenses remained the same.
I realized too late that I had been screwed. There is nothing I can do about this, in legal terms, with the manager. My profession, and the talent therein, is a matter of opinion. For instance, it would be like trying to determine who is a better magician or whether the Rolling Stones hold a bigger musical legacy than the Beatles. Suing him would be impossible.
Our mortgage is 3800 on a 500k house. We have decent equity and have never missed a payment (thank God).
Our credit card debt has now ballooned to about 85k.
We own two vehicles. Both are paid off and well over the allowable exemptions in Florida. We have substantial equipment for my work which would be nearly worthless to a bk trustee. My wife is a real estate agent and makes periodic commissions that have helped keep us afloat, along with burning through 150k or so in savings.
Monthly income is about 12-14k and monthly expenses run about 13-14k, depending on the month and checks received. Wife's income varies a lot, and is tough to calculate. Over the last 6 months it runs about 1400 per month.
She hid the desperation of our situation form me for the past year, hoping we could straighten things out and make a turnaround in my work. We also spent a fortune on marketing my services and she began selling real estate-both good things-but neither provided a long-term answer.
It never happened.
Finally, the dam burst last month and we consulted a bk attorney. We will be filing CH 13 in a month or two, with perhaps $300 a month in disposable.
Our future incomes are entirely dependent on the conditions of our industries. Hers is obviously in trouble (real estate) though she has continued to do well. Mine is fluctuating and could at any moment explode with revenue or stay stagnant, depending on customers and demand for my work.
We also have a 14 year old son and five cats. We live in a very nice home that has very large maintenance and utility expenses. Not to mention insurance. Florida is a homeowners nightmare right now.
Our plan:
-File chapter 13 at the bottom of our worst 6 months ever.
-Hope (and this seems ridiculous, hoping for LESS) that I don't have a major improvement in work contracts and that she doesn't sell too many houses. To tilt the income slightly might mean we have to pay far more into a plan than we could realistically afford.
-Get confirmed.
-Sell the house and use the equity to purchase a much less expensive place. In Florida ALL home equity is exempt, if you have lived here for the past 38 months.
-Begin to recover.
I have also posted on our "hairbrained schemes" to spend a lot of sudden, unexpected, and nonrecurring income that most people would only shake their heads at. And our future thoughts on financial planning.
We will receive, due to billing errors in my work, commissions, and tax refunds, 35k or so in the few months before bk. We will use this money to pay for a badly needed air conditioning unit, to pay for dental work, eyeglasses, contacts, a bed for our son, home repairs, food, clothing, mortgage, advertising, equipment repairs, etc. There are more than enough legitimate expenses to cover this amount. And then some.
It sounds like an extreme amount, but the money, once taxes and othe fees are removed, would be reduced to about 12-13k. Even if it were 15k, that would make NO dent in our 80k of credit card debt, which is all now at 32%.
On the far side of bk (after), we are considering a number of things.
-Family trusts
-Dividing assets and debts, with either her or I taking all assets under one name and the other taking all debts. Understand that we are talking about assets that are free and clear. For instance, when we buy a new place, we will owe NOTHING on it. Same with vehicles. These things cannot be done now, or it would be fraudulent. But we CAN do them after bk, as a hedge against future risks.
-Offshore trusts and holding companies which own one another. Perfectly legal, as LONG as the money flowing though is reported for tax purposes. In the future, though, any liabilities against us, through bk or lawsuits, whatever, would not be able to touch these companies.
Many of you have been incredibly supportive, and not judged us, even though we are well above median income. Even the best plans can go completely crazy. We got caught in a whirlpool we didn't know even existed, until it was far too late.
I thought it would be appropriate to post all the facts with as little emotion as possible, so that you can, perhaps, understand why and how two people with decent income can be bk in the first place.
Being broke, to me, can fall across all income levels. All it takes is expenses that are higher than your income, which is what happened here.
Best wishes to you all,
-dmc
I posted originally when I joined the board, but now realize that I was buried in a firestorm of emotions, rage and frustration. Not to mention embarrassment. My original post reads like a mixture of Danielle Steel and Stephen King but with the drama of a summer blockbuster apocalypse film. I guess that's what you get when you shoot from the heart and pour your soul out for others to see-and hopefully not judge.
Here goes:
Three years ago I hired a manager, who makes a percentage of my income for bringing me new work.
The manager not only brought NO new work, he took his percentage (15%) of my existing work as an independent performer/entertainer. My occupation is not particular interesting, and I am not someone you would recognize on the street, though if you live in the United States, you probably know me, if not by name.
The manager also was supposed to renegotiate my existing contracts and get me better terms and higher payments. He renegotiated, all right. Now his OTHER performers have my old contracts, with better terms in some cases, lesser in others.
End result: My income dropped from 450k per year to 120k per year. Meanwhile my expenses remained the same.
I realized too late that I had been screwed. There is nothing I can do about this, in legal terms, with the manager. My profession, and the talent therein, is a matter of opinion. For instance, it would be like trying to determine who is a better magician or whether the Rolling Stones hold a bigger musical legacy than the Beatles. Suing him would be impossible.
Our mortgage is 3800 on a 500k house. We have decent equity and have never missed a payment (thank God).
Our credit card debt has now ballooned to about 85k.
We own two vehicles. Both are paid off and well over the allowable exemptions in Florida. We have substantial equipment for my work which would be nearly worthless to a bk trustee. My wife is a real estate agent and makes periodic commissions that have helped keep us afloat, along with burning through 150k or so in savings.
Monthly income is about 12-14k and monthly expenses run about 13-14k, depending on the month and checks received. Wife's income varies a lot, and is tough to calculate. Over the last 6 months it runs about 1400 per month.
She hid the desperation of our situation form me for the past year, hoping we could straighten things out and make a turnaround in my work. We also spent a fortune on marketing my services and she began selling real estate-both good things-but neither provided a long-term answer.
It never happened.
Finally, the dam burst last month and we consulted a bk attorney. We will be filing CH 13 in a month or two, with perhaps $300 a month in disposable.
Our future incomes are entirely dependent on the conditions of our industries. Hers is obviously in trouble (real estate) though she has continued to do well. Mine is fluctuating and could at any moment explode with revenue or stay stagnant, depending on customers and demand for my work.
We also have a 14 year old son and five cats. We live in a very nice home that has very large maintenance and utility expenses. Not to mention insurance. Florida is a homeowners nightmare right now.
Our plan:
-File chapter 13 at the bottom of our worst 6 months ever.
-Hope (and this seems ridiculous, hoping for LESS) that I don't have a major improvement in work contracts and that she doesn't sell too many houses. To tilt the income slightly might mean we have to pay far more into a plan than we could realistically afford.
-Get confirmed.
-Sell the house and use the equity to purchase a much less expensive place. In Florida ALL home equity is exempt, if you have lived here for the past 38 months.
-Begin to recover.
I have also posted on our "hairbrained schemes" to spend a lot of sudden, unexpected, and nonrecurring income that most people would only shake their heads at. And our future thoughts on financial planning.
We will receive, due to billing errors in my work, commissions, and tax refunds, 35k or so in the few months before bk. We will use this money to pay for a badly needed air conditioning unit, to pay for dental work, eyeglasses, contacts, a bed for our son, home repairs, food, clothing, mortgage, advertising, equipment repairs, etc. There are more than enough legitimate expenses to cover this amount. And then some.
It sounds like an extreme amount, but the money, once taxes and othe fees are removed, would be reduced to about 12-13k. Even if it were 15k, that would make NO dent in our 80k of credit card debt, which is all now at 32%.
On the far side of bk (after), we are considering a number of things.
-Family trusts
-Dividing assets and debts, with either her or I taking all assets under one name and the other taking all debts. Understand that we are talking about assets that are free and clear. For instance, when we buy a new place, we will owe NOTHING on it. Same with vehicles. These things cannot be done now, or it would be fraudulent. But we CAN do them after bk, as a hedge against future risks.
-Offshore trusts and holding companies which own one another. Perfectly legal, as LONG as the money flowing though is reported for tax purposes. In the future, though, any liabilities against us, through bk or lawsuits, whatever, would not be able to touch these companies.
Many of you have been incredibly supportive, and not judged us, even though we are well above median income. Even the best plans can go completely crazy. We got caught in a whirlpool we didn't know even existed, until it was far too late.
I thought it would be appropriate to post all the facts with as little emotion as possible, so that you can, perhaps, understand why and how two people with decent income can be bk in the first place.
Being broke, to me, can fall across all income levels. All it takes is expenses that are higher than your income, which is what happened here.
Best wishes to you all,
-dmc
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