Well, after a year of dealing with timing issues and 2 years after a financial analyst recommended filing bk, it finally happened this week. I'd like to first thank all the posters on this forum for sharing their stories, advice, insights, etc... It really helps when getting the courage to file and break the cycle of denial. I have really learned a lot about bk and life from reading the posts.
My plight really began in 2001. I work for an airline so I endured several pay cuts, increased insurance contribution, and seeing my pension go away. I was never unemployed, but the gradual erosion of income meant that we started carrying cc balances. We then moved in 2004 to cut down on driving, and be near the area we spent our free time and closer to work. I bought the house for 190k and sank about 6k into it in the first year. We then had to relocate due to allergy/health issues. The house eventually sold 3days prior to the foreclosure hearing for 127k. To avoid foreclosure and as a condition of sale I had to sign a 35k promissary note. I took out more cash advances, and bought another house to live in before the foreclosure hit my credit score. All in all over an 18month period I got to the point where I had $110,000 in unsecured debt between cash advances and the promissory note.
As my employer emerged from Chapter 11, I got several bonuses that kept my income above median. I paid my creditors, kept current on debts but knew I would never pay everything off. This situation kept up through 2006. My initial plan was to keep the creditors at bay this Summer, get some things taken care of and prepare for a Chapter 13 this Fall. Three things changed this:
I didn't get a pay raise in April, my bonus was very small, and the DOJ raised the allowance for each family member over 4 from 6300 to 6900 per year..
Suddenly I figured I could pass the means test if I got on the stick. I met with an Atty on May 4, got my paperwork done, stopped paying the cc bills, etc.... And this week the paperwork was filed. My 341 is scheduled for July 20. It should be pretty straightforward from here.
My biggest lessons are:
A house is to live in, don't view it as an investment. If you make money over time and build equity. Great. My house that sank me was in a prime location, but needed a bunch of work. Until that work is done, the value is zilch!!!
See a lawyer at first sign of trouble. I was so terrified of foreclosure, bankruptcy, etc... that I just dug myself deeper while hoping to right the ship. If I had let my previous house go into foreclosure, gave it up in a bankruptcy filing, I would be miles ahead by now. In my ignorance I figured after a bankruptcy all I'd be left with is bad credit and a cup to beg with on the street corner. I was WAY too scared of the stigma. PRIDE AND IGNORANCE COSTS MONEY!!!
Don't accumulate debt by painting a rosy picture of the future. Unless you are unemployed, don't assume the future will get better financially.
And finally, a lot of bad things can happen to people that are outside their control. Industry downturns, unemployment, health issues, real estate bubbles, etc...That's part of the deal with being alive and there are no guarantees. Don't get hung up on "fairness" or equality. Don't get depressed over past mistakes, learn from them and move on. We're not on this planet too long, so don't waste your time making yourself miserable.
Hope this is useful to someone.
My plight really began in 2001. I work for an airline so I endured several pay cuts, increased insurance contribution, and seeing my pension go away. I was never unemployed, but the gradual erosion of income meant that we started carrying cc balances. We then moved in 2004 to cut down on driving, and be near the area we spent our free time and closer to work. I bought the house for 190k and sank about 6k into it in the first year. We then had to relocate due to allergy/health issues. The house eventually sold 3days prior to the foreclosure hearing for 127k. To avoid foreclosure and as a condition of sale I had to sign a 35k promissary note. I took out more cash advances, and bought another house to live in before the foreclosure hit my credit score. All in all over an 18month period I got to the point where I had $110,000 in unsecured debt between cash advances and the promissory note.
As my employer emerged from Chapter 11, I got several bonuses that kept my income above median. I paid my creditors, kept current on debts but knew I would never pay everything off. This situation kept up through 2006. My initial plan was to keep the creditors at bay this Summer, get some things taken care of and prepare for a Chapter 13 this Fall. Three things changed this:
I didn't get a pay raise in April, my bonus was very small, and the DOJ raised the allowance for each family member over 4 from 6300 to 6900 per year..
Suddenly I figured I could pass the means test if I got on the stick. I met with an Atty on May 4, got my paperwork done, stopped paying the cc bills, etc.... And this week the paperwork was filed. My 341 is scheduled for July 20. It should be pretty straightforward from here.
My biggest lessons are:
A house is to live in, don't view it as an investment. If you make money over time and build equity. Great. My house that sank me was in a prime location, but needed a bunch of work. Until that work is done, the value is zilch!!!
See a lawyer at first sign of trouble. I was so terrified of foreclosure, bankruptcy, etc... that I just dug myself deeper while hoping to right the ship. If I had let my previous house go into foreclosure, gave it up in a bankruptcy filing, I would be miles ahead by now. In my ignorance I figured after a bankruptcy all I'd be left with is bad credit and a cup to beg with on the street corner. I was WAY too scared of the stigma. PRIDE AND IGNORANCE COSTS MONEY!!!
Don't accumulate debt by painting a rosy picture of the future. Unless you are unemployed, don't assume the future will get better financially.
And finally, a lot of bad things can happen to people that are outside their control. Industry downturns, unemployment, health issues, real estate bubbles, etc...That's part of the deal with being alive and there are no guarantees. Don't get hung up on "fairness" or equality. Don't get depressed over past mistakes, learn from them and move on. We're not on this planet too long, so don't waste your time making yourself miserable.
Hope this is useful to someone.
Bravo, bravo!! 
... but I feel comfortable enough that chpt 7 os the way it should be.
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