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Bank Levy? This makes no sense to me

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  • #46
    Originally posted by justbroke View Post
    Trust me, Trevor, when I say that the attorneys have seen and heard it all. I had over $1.3 million in property... so... not even the Trustee batted an eyelash as there are others in much worse financial condition that we mere mortals. Remember that many, millionaires, billionaires, States, large companies, and even luminaries have all filed bankruptcy; including some former presidents.
    So true brother, Thank You! Happy New Year also.

    Comment


    • #47
      There are hardship exemptions for withdrawing from a 401k without penalties or taxes. I'm pretty sure Fidelity paid the entire amount as I had a surgery to pay for, cash upfront. Read up on the current tax code, or, you could call the IRS. Wait until the 3rd, or be the first caller at the time their taxpayer line opens. Find out how to document the hardship to avoid the penalty, if you can pre-pay it, or [insert your question here].

      Not knowing is hell. I highly recommend getting your city and county library cards and then getting a pile of bk and finance eBooks or books. In Phoenix the Library has Dave Ramsey's series, Suze Orman's series, Brian Tracy, and so on. Their Nolo series is out of date, though, as the last AZ Bk book was published in December 2017. The courthouse has an excellent video series on Bk as well as daily pro bono sessions for us mere mortals to go or call in questions. Use "Google Scholar" to review cases in AZ, or with your lenders. Been pretty interesting so far, especially Ramsey's reminder about the five stages of financial grief.

      As a sticky thread states, before BK, have a place to live, a reliable car (yes, do the car loan before bk!), and a bank account with no debts near the bank.

      good luck.

      Comment


      • #48
        While there are hardship reasons (which other than being over 59.5) for withdrawal, avoiding the 10% penalty is very narrow. Medical expenses must exceed 7.5% of your AGI (adjusted gross income). At least for high earners, that's a high bar to meet. I'm not sure Trevor mentioned any surgery, only that they took the withdrawal simply because of a separation from their employer. (This happens often, and I did the same thing with a retirement account... thinking that I would just put it into an IRA. I spent it trying to save property.)
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog


        I am not an attorney. Any advice provided is not legal advice.

        Comment


        • #49
          Originally posted by justbroke View Post
          While there are hardship reasons (which other than being over 59.5) for withdrawal, avoiding the 10% penalty is very narrow. Medical expenses must exceed 7.5% of your AGI (adjusted gross income). At least for high earners, that's a high bar to meet. I'm not sure Trevor mentioned any surgery, only that they took the withdrawal simply because of a separation from their employer. (This happens often, and I did the same thing with a retirement account... thinking that I would just put it into an IRA. I spent it trying to save property.)
          Yeah I just took the money out to help me relocate to Arizona.

          Worst decision I ever made in my entire life.

          Comment


          • #50
            I have a question, should have asked this way back. My current apartment lease is over in May 30th, and it's payed for. A couple months back I used various credit cards to make payments so basically I have a negative balance of around $3000. I can log in to their payment website, and it shows etc, we don't get rent receipts or even confirmation emails, it's all on the website.

            Now, when doing a Chapter 7, what will become of this? They (trustee) I'm guessing would want to try and get the money back? Or am I paranoid? I plan on doing another lease here in June, but again if I payed it forward, would they look to take those funds even though the apartment company was already payed out in advance?

            Other thing that is freaking me out is I hope they don't do a whole new credit check/check for Bankruptcy etc. I just read through my entire lease, and it does say it can disqualify you if you had Bankruptcy or credit/outstanding debt etc.

            Comment


            • #51
              Originally posted by Trevor View Post
              Worst decision I ever made in my entire life.
              Me too! Well, not moving to Florida, but exhausting my nest egg.

              Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
              Status: (Auto) Discharged and Closed! 5/10
              Visit My BKForum Blog: justbroke's Blog


              I am not an attorney. Any advice provided is not legal advice.

              Comment


              • #52
                Trevor, you need to talk to your attorney about the prepaid rent. I suspect it is an asset that you need to exempt. If it is considered an asset and you can't exempt it, then the trustee probably will force the landlord to pay the funds to the bankruptcy estate for distribution to your creditors.
                LadyInTheRed is in the black!
                Filed Chap 13 April 2010. Discharged May 2015.
                $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                Comment


                • #53
                  Originally posted by LadyInTheRed View Post
                  Trevor, you need to talk to your attorney about the prepaid rent. I suspect it is an asset that you need to exempt. If it is considered an asset and you can't exempt it, then the trustee probably will force the landlord to pay the funds to the bankruptcy estate for distribution to your creditors.
                  Yeah I'd be totally screwed if that happens, cause my lease is up May 30th, and they would not renew my lease. It says in the lease that you can be denied due to credit/bankruptcy.

                  I have a job interview tomorrow, at AT&T which was my old job back in NY. I'm praying to God I get this, cause then I can work this job and Uber/lyft on days off to pay off all this debt.

                  Wish me luck!

                  Comment


                  • #54
                    Good luck, Trevor. Are you saying you would be moving back to New York to work for AT&T or staying where you are?

                    Comment


                    • #55
                      Originally posted by Chrysalis View Post
                      Good luck, Trevor. Are you saying you would be moving back to New York to work for AT&T or staying where you are?
                      I would stay here, although I wish I could go back. I just have to get over this hurdle, I really don't want to live with a Bankruptcy on my record and destroyed credit for 10 years. It would feel so good to work my tail off and pay off my 3 vehicles and $27,000 in debt. It's attainable IF I get this job, and take on a 2nd job on my off days. I'll eat peanut butter and jelly sandwiches to survive. Hell I even kicked around the idea of living in my truck, a lot of people do that to pay off debt, it's weird, sure, but that would save me $900 month in rent. You just gotta join a 24hr gym for showers and a place to hang out.

                      Comment


                      • #56
                        Trevor, credit is actually not destroyed for 10 years. Anyone that has been through a bankruptcy will tell you that score recovery is pretty quick. I was over 670 within 6 months of exiting my Chapter 7. Back over 720 within 2 years. While the bankruptcy stays on your report, most creditors are score-driven and especially many credit unions. For most credit events, 2 years is the magic number when it comes to improving your credit score. There should be no stigma of having filed bankruptcy.
                        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                        Status: (Auto) Discharged and Closed! 5/10
                        Visit My BKForum Blog: justbroke's Blog


                        I am not an attorney. Any advice provided is not legal advice.

                        Comment


                        • #57
                          Financial matters are just business.

                          Several sources I've been reviewing state that once debt reaches 10-15k, it's nearly impossible to pay off. This doesn't mean cars and houses, something that has value at the end of payments.

                          if it's a lease, why not do an early return? You won't have any benefit or property at the end of the lease, thus all you're doing is renting the truck and paying the company it's depreciation expenses.

                          Then go find something in the affordable yet reliable range if you still need a truck. You generally don't need a new one ton Duramax anything when a 99 Dodge Ram is $2000 and running. Sure it has 155k miles, but it should go another 150k. Emissions, insurance, and licensing is super cheap as compared to new.

                          As for why leaving back east, well, its 70 here and really fricking cold back there. Move as fast as you can through anger and bargaining, and get to acceptance where you can take actions to solve the issues. BTW, a friend filed four years ago with foreclosure and two repos. At the two year point he bought a truck, at the three year point, bought a house. All were at prime lending rates vs. sub-prine screw you rates. BK ain't the end of life. Most often the problem is waiting too long to file.

                          Comment


                          • #58
                            Originally posted by Trevor View Post

                            I would stay here, although I wish I could go back. I just have to get over this hurdle, I really don't want to live with a Bankruptcy on my record and destroyed credit for 10 years. It would feel so good to work my tail off and pay off my 3 vehicles and $27,000 in debt. It's attainable IF I get this job, and take on a 2nd job on my off days. I'll eat peanut butter and jelly sandwiches to survive. Hell I even kicked around the idea of living in my truck, a lot of people do that to pay off debt, it's weird, sure, but that would save me $900 month in rent. You just gotta join a 24hr gym for showers and a place to hang out.
                            This is a joke, right? Bankruptcy doesn't "destroy" your credit for 10 years. Who told you that myth? For most people who file--including myself, the mere act of filing increases their credit scores, and discharge brings another small increase. Although the Chapter 7 bankruptcy remains under the "public records" section for 10 years, you can easily qualify for an unsecured credit card within a year after discharge, and if you use it and pay it off each month, within another year, your credit will be good enough to qualify for anything else you might possibly need, with interest rates similar to what someone who never filed could obtain. In fact, I am now a little over 4 years past discharge and approved for a mortgage, and was about to buy a house until the inspections turned up major problems which the seller did not wish to fix, so I'm still looking.

                            Also, I fail to see how it would "feel so good" to live a life of abject poverty in order to repay unsustainable debts, when a quick and painless solution is available. The debts are owed to ]institutional lenders, whom are in the business of lending money, and who price for the risk. They are not owed to friends and family, or even to strangers who are going to miss the money. Your creditors could care less if you end up homeless and hungry trying to pay, and you should extend to them the same moral courtesy. You should file for Chapter 7, eliminate all your debts, and not run your health into the ground trying to juggle multiple jobs.

                            It should be completely obvious by now that there is no way for you to repay these debts while maintaining a reasonable standard of living, and that is EXACTLY what bankruptcy is designed to provide an escape hatch from! Far from being shameful, it would be a savvy financial move for you. You could then use whatever income you make at your new job(s) to pay for living expenses going forward and save for the future, rather than throwing it down a black hole of debt.

                            The smart thing to do is quit paying all bills for things you don't plan to keep "cold turkey" and let them charge off. If/when you are sued, then you should buy the book "How to File for Chapter 7 Bankruptcy", and use it and the resources available here to file. By then, you will have spent most of your non-exempt funds, and should easily sail through a "no-asset" Chapter 7.

                            Comment


                            • #59
                              Thank you everyone, great advice I appreciate it.

                              The interview went well, but to be honest I've been talking to friends/family back home, and it's making me want to go back even more. My good friend has a Plumbing business and he said I can work for him till I get stable with a job etc. I absolutely hate it out here, and it's not because of my financial problems. Just today walking into the interview I thought to myself how long it would take to pay off and how miserable I'd be out here with no family/friends.

                              I was reading through my rental lease, and I could break the lease for $1200 to get the hell back to NY. I would voluntarily turn in my car to Ford, and motorcycle to Honda because I can't just abandon the vehicles and leave them in my lot. The truck I would use to drive back, can I keep the truck ($480month 84month finance through AlaskaFCU) while doing a Bankruptcy?

                              Someone mentioned it earlier where in NY you can have I believe $5,000 in your bank account as opposed to $300 in Arizona when filing for Bankruptcy. I know I'd have to wait 90 days to file in NY, but I would feel better over there filing, because of my connections with friends/fam, and actually having a couch to sleep on if things really get rough.

                              If I stay here, this apartment would kick my butt out because I found out they run a credit check every year they renew the lease. Last thing I need is run low on funds and be on the street with all these meth heads and homeless people and NOBODY to help. Sorry if that sounds selfish, in fact it kills me to have to lean on friends/fam for help.

                              Spoke to one of my neighbors, he's a nice old guy, and we starting both saying how we hate our current situations haha. It turns out he did a Chapter 7 in the early 2000's. He told me flat out to get that remaining cash I have out of the bank and wait a long time to file Bankruptcy. He even said to just keep running up my credit cards for bills and food and not big purchases. He's going to move next month because he's sick of the area.

                              On top of all this I think someone that used to live here is taking my mail, landlord probably never changed the mailbox key/lock. I get a call from a phoenix number to my NY number and this dude was cursing at me. I looked up that number, and it comes up at an apartment building 2 blocks down? Only way they would have my number is if they stole mail with my NY number in it, like a cell phone bill. NOW it makes sense why I never got my replacement drivers license and a reissued credit card.

                              GOD I MISS NEW YORK!


                              Comment


                              • #60
                                If you're planning to return to NY and file, you don't even need to pay the $1200 lease break fee. You'd just include the apartment complex in your bankruptcy, and reject the lease.

                                Comment

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