BobMango
10-25-2009, 03:18 PM
I’m going to be filing for Chapter 7 next week, so while I process all of the negative feelings associated with that event I thought I would look forward to life after bankruptcy and put together a roadmap for the next stage. This is just my approach but I thought I would post it and ask for suggestions from others that have walked this path before me.
There are a number of factors that led me to this point, but I think if I had followed these rules (except maybe number 6) I would have been able to avoid bankruptcy, even after 18 months of unemployment. Listed in the order I thought of them, but not necessarily in order of importance.
1) Pay cash for everything. Shouldn’t be much of a problem since I’ve been doing this for almost a year now. The only debt obligation I’ll keep long term will be my mortgage, but from here on out everything will be paid for in cash or it’s not happening. My 2006 F250 is about 18 months from being paid off so after that, those payments ($630/month) go into savings for the next vehicle, which will be paid for in cash, and most likely won’t be new. I’ll let others take the initial depreciation hit next time I need a new vehicle.
2) Continue to simplify my life. Part of the reason that I ended up in this position is that I kept taking money and turning it into garbage. I would buy things on impulse, only to see them get sold at the next garage sale for pennies on the dollar. No more. I found I needed a bigger house to hold all of my stuff, but in reality I didn’t need the stuff so I didn’t need the bigger house with the bigger payment. Now I regularly go through my house looking for things that I don’t need. They either get sold or donated to a worthy cause. I refuse to be possessed by my possessions anymore.
3) Start regular savings to build up a reserve of 6 months living expenses. Once this is achieved, I’ll continue to add to it, but also start other savings accounts; like vehicles, luxury items, travel, etc. My ultimate goal is to get to the point where my income from savings and investments covers my living expenses. The book “Your Money or Your Life”, by Joe Dominguez is an excellent source of information and inspiration.
4) Regularly monitor credit reports to ensure that all accounts in bankruptcy are reported correctly.
5) Stay current on all payments, but especially mortgage and car payments.
6) Establish new credit accounts.
a. Start with Orchard Bank
b. Avoid secured cards with high fees
7) Teach my kids the proper approach to handling their finances so that they can avoid this experience on their own.
So, what have I missed in this list? I know there are lots of details about saving money on various expenses that could be included, but I like to keep my checklists fairly focused. Any other suggestions for living after bankruptcy?
There are a number of factors that led me to this point, but I think if I had followed these rules (except maybe number 6) I would have been able to avoid bankruptcy, even after 18 months of unemployment. Listed in the order I thought of them, but not necessarily in order of importance.
1) Pay cash for everything. Shouldn’t be much of a problem since I’ve been doing this for almost a year now. The only debt obligation I’ll keep long term will be my mortgage, but from here on out everything will be paid for in cash or it’s not happening. My 2006 F250 is about 18 months from being paid off so after that, those payments ($630/month) go into savings for the next vehicle, which will be paid for in cash, and most likely won’t be new. I’ll let others take the initial depreciation hit next time I need a new vehicle.
2) Continue to simplify my life. Part of the reason that I ended up in this position is that I kept taking money and turning it into garbage. I would buy things on impulse, only to see them get sold at the next garage sale for pennies on the dollar. No more. I found I needed a bigger house to hold all of my stuff, but in reality I didn’t need the stuff so I didn’t need the bigger house with the bigger payment. Now I regularly go through my house looking for things that I don’t need. They either get sold or donated to a worthy cause. I refuse to be possessed by my possessions anymore.
3) Start regular savings to build up a reserve of 6 months living expenses. Once this is achieved, I’ll continue to add to it, but also start other savings accounts; like vehicles, luxury items, travel, etc. My ultimate goal is to get to the point where my income from savings and investments covers my living expenses. The book “Your Money or Your Life”, by Joe Dominguez is an excellent source of information and inspiration.
4) Regularly monitor credit reports to ensure that all accounts in bankruptcy are reported correctly.
5) Stay current on all payments, but especially mortgage and car payments.
6) Establish new credit accounts.
a. Start with Orchard Bank
b. Avoid secured cards with high fees
7) Teach my kids the proper approach to handling their finances so that they can avoid this experience on their own.
So, what have I missed in this list? I know there are lots of details about saving money on various expenses that could be included, but I like to keep my checklists fairly focused. Any other suggestions for living after bankruptcy?