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Just filed ch.7. How I got here.

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  • Just filed ch.7. How I got here.

    Hi, well after much ruminating and trying to fend off the inevitable, I finally took the plunge and filed for chapter 7 last week. I do wish I had found this forum earlier, but then I find myself wishing that I had filed much sooner as well. Here's my story for any who wish to read it. Perhaps writing here will help me to crystallize and get a grip on how I got here, and maybe someone else will relate to my story as well. Right now, it's a feeling of guilt and relief combined, at least for now, being only about 10 days post filing, and a month before my 341 meeting.

    For most of my life, I have made my living as a mechanic in a Chevy dealer, paid on a flat rate system without a pay guarantee. This means that pay periods start at zero, and jobs are paid according to times stated in labor guides, or in the case of warranty work, warranty labor guides which are notoriously stingy. At the end of the pay period, if you are lucky you are above the hours you actually worked. If you had a bad go and you only made 20 hours, that's tough, better luck next week.

    If the stars align, the jobs handed to me on a given week treat me well and I make the time or even beat the time on most jobs that week. But more often than not, the work flow would be slow, or I would get warranty work that is difficult to make the time on, or the labor guide time for a particular diagnosis or repair is simply too low, or other circumstances would arise, and I end up taking or needing more time than the job pays, and my checks would end up being considerably less than the 40 or 45 hours I actually work. Rarely, I have a week where I am paid more hours than I work, but most often, my pay is in the range of 25 to 35 hours per week, usually working 45 hour weeks with extra Saturdays just to make that. And that means that my pay fluctuates widely from week to week without any way to predict my income. Sometimes I would have a run of a few bad weeks in a row, which would make it tough just to make the bills that month.

    It's tough, because each week starts with the possibility of me grossing over $1100, but I always end up grossing about $750 or less. And out of that, I have to buy tools to be able to do my job, and some of those aren't cheap, especially off the tool trucks.

    But that is just one side of my story.


    Throughout my adult life I've had trouble with money management, with paying back credit, with trying to live beyond my unpredictable means while supporting a significant other who doesn't work, and our now adult daughter, who also doesn't work (she's a short bus kid, but she stays out of trouble, so I deal with it peacefully.)

    I've used payday loans almost continuously in one form or another for at least 20 years. Short week? No problem, find a loan, it'll be better from now on, right? Begged and borrowed my way through life, getting from one short paycheck to the next, trying to keep all the services on, making the car payment. Got through college with student loans that I still owe over $30k on, putting them off and putting them off, and I know that will still be there when/if I get my discharge.

    As my 56 year old ass looks back, during and since college I've had numerous judgements and garnishments because I failed to pay back a loan or a credit card, I've had my bank account drained by surprise by a judgement creditor. I've been evicted from a rental trailer and forced to live in a motel room. I'm always behind on all the bills, pushing the envelope of getting my services cut. Once I had the cops show up on my door because I used an overlimit card to buy gas (in the pre-internet days). Later on, I inherited a paid for house from my parents, took out a equity loan to do all the repairs it needed, failed to make its payments, then got foreclosed on. My credit life has been, in short, a hot steaming mess.

    Which brings me to today.

    Today, I am buying my present home, a much better place than the one I lost, on CFD from my second job employer, who owns a real estate company and found me a good place to move into after my foreclosure. My paychecks from that job go directly to my house payment, so I landed on my feet after foreclosure and my home is not in jeopardy, thank God, although I still struggle like before with keeping the bills paid.

    At one point a few years ago I felt like maybe things were beginning to turn, like I was starting to see my way out of debt trouble. Then, out of the clear blue, I discovered... motorcycles.

    Never rode one in my life before I was 52. Then I found out the safety course to get your license was free, and you didn't even need a motorcycle, they provide everything... so I took the course, got my license, and a few days later I had my starter bike for 1200 with the help of, you guessed it, a payday loan. Becoming a daily commuting rider, I outgrew that bike rather quickly, and a few months later, got another 1200 dollar bike, a bigger one, with the help of yet another loan. Oh, I'll sell the first one, right? But I couldn't bring myself to do it. Two jobs, lack of time, didn't want the hassle. Of course, older bikes need tires and repairs, and you need helmets and safety gear, and farkles (accessories) and all that adds up... and I was finding deals on everything I needed, but still...Then I got a yen for yet another bike, a big touring model...found one that needed a fair amount of TLC for 1100, but again, tires, parts, repairs, even though I can do all my own work, it's still adding up. And I still can't bring myself to sell either of the first two bikes...

    But my income problems continued, in fact they got worse. Then sitting down and taking a hard look, I found my 2017 income fell 8K from the year before, and this year is no better, and I'm suddenly looking up at no fewer than 8 loans, mostly from nutty finance companies with usurious interest rates, and my truck is collateral on one of them. There was a payday loan in there too. And I'm juggling payments like a drunk circus clown, trying to fend off garnishments.

    This madness has to stop. NOW.

    I threw in the towel, revoked my creditors wage assignments, and found a pro bono attorney through a legal aid foundation, took the pre file course and did the paperwork, and he filed for me last week.

    It was weird how whenever my phone rang, it was some creditor asking about a payment. As soon as I mentioned I was filing BK and gave the attorney's info, just to a couple of creditors, my phone stopped ringing almost completely...

    Now I'm in the automatic stay, so I don't need to worry right away about my truck being repo'd. But it will be at some point, so I will need to replace it. I've had it for 13 years, and it's beginning to show its age developing some issues... I could fix it, but why invest in it when it's going to be taken away. It's only worth about 3K at best, on a 12K loan... so I need to have a replacement, somehow. Since my filing, I've received about a dozen ads in the mail for vehicle financing...

    And my bikes? Well, one is rideable right now... The big touring bike is apart in my garage, having suffered a driveshaft failure, and the starter bike wont start, probably needs a valve adjustment...

    I feel relief, guilt, shame...I just gave most of the nutty finance companies in town a big middle finger and turned my back on the obligations I made, but at least my phone is quiet and the hate mail has stopped. Also, I feel some apprehension at going through the BK process, hoping my attorney got everything right. He's filed me as a 'no asset' case, I'm hoping everything goes smoothly and no hiccups.

    So looking at all this, yeah I can blame the way I get paid at my job, but at the end of the day it was all me and a whole bunch of bad decisions. Maybe I should find some more counseling.

    Thanks for reading my story.


  • #2
    Welcome to BKForum. Financial decisions are tough for everyone. Who actually plans to file bankruptcy at some point in their life? I always say that life happens and bankruptcy is a way to hit the reset button. Don't feel bad for your (major) creditors as they probably already were paid back the value of the property, and then some. They also build into the financing ways so that everyone pays for the losses that the creditor may endure (except in extreme cases), and even then some are insured.

    I wish you the best of luck as you get your new fresh start.
    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


    • #3
      Thanks. I'm just trying to take ownership of what I did. Some folks can blame medical issues or a nasty divorce. My BK is just me.

      So I've been researching the vehicle situation, and if I'm understanding correctly, the creditor may allow me to keep the vehicle if I pay them its value in a lump sum. Which probably wont be an option, since I wont have $3K or so to pay for it. It's kind of a moot decision anyway because the vehicle is 17 years old and the midwest winter corrosion monster is taking its toll, so it will need to be replaced anyway.

      Talking to some people at the dealership I work at, they advise not to do anything until after the discharge, the longer I can wait the better. But I will need another vehicle at some point soon so I'm not sure waiting too long is an option, unless I find a cheapie from a private owner or an auction car or something.

      Comment


      • #4
        In a Chapter 7, you can actually pay them the vehicles current "fair market value" by using a process known as a 722 Redemption. There are loans available to "some" people while in a Chapter known as a 722 Redemption Loan. The interest rates are outrageous, but I used it and saved over $11K on my vehicle.

        You can always negotiate with the lender and even negotiate as part of a reaffirmation. If you're Pro Se, I don't recommend that road because you could be taken advantage of. If you owe $12K on a 17 year old vehicle that's only worth $3K, a 722 Redemption loan may not even be possible. The bottom line is that the vehicle is not worth the remaining loan balance.
        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


        • #5
          Originally posted by thud300 View Post
          For most of my life, I have made my living as a mechanic in a Chevy dealer, paid on a flat rate system without a pay guarantee. This means that pay periods start at zero, and jobs are paid according to times stated in labor guides, or in the case of warranty work, warranty labor guides which are notoriously stingy. At the end of the pay period, if you are lucky you are above the hours you actually worked. If you had a bad go and you only made 20 hours, that's tough, better luck next week.

          If the stars align, the jobs handed to me on a given week treat me well and I make the time or even beat the time on most jobs that week. But more often than not, the work flow would be slow, or I would get warranty work that is difficult to make the time on, or the labor guide time for a particular diagnosis or repair is simply too low, or other circumstances would arise, and I end up taking or needing more time than the job pays, and my checks would end up being considerably less than the 40 or 45 hours I actually work. Rarely, I have a week where I am paid more hours than I work, but most often, my pay is in the range of 25 to 35 hours per week, usually working 45 hour weeks with extra Saturdays just to make that. And that means that my pay fluctuates widely from week to week without any way to predict my income. Sometimes I would have a run of a few bad weeks in a row, which would make it tough just to make the bills that month.

          It's tough, because each week starts with the possibility of me grossing over $1100, but I always end up grossing about $750 or less. And out of that, I have to buy tools to be able to do my job, and some of those aren't cheap, especially off the tool trucks.
          Translation: You are/were working for an employer which takes/took advantage of you, with a pay scheme designed to charge the customer top dollar, while not even paying the worker for time spent doing his job. I fail to see how this type of pay arrangement is even legal, under state and federal fair labor standards. As long as the technician is doing the job to the best of his ability, and in accordance with industry standards, his pay should not depend on how much, if anything, the customer is being charged. Warranty reimbursement is intended to cover the actual cost of doing a repair, not to provide the same level of profit that a retail customer would pay. Whether or not the warranty labor payment for a particular job is "reasonable" to the owner should not be the technician's problem.

          I work in heating and air conditioning, and the ONLY pay arrangement I would ever accept is straight hourly, or a flat annual salary (which no company offers for this type of work). Some companies pay their technicians "book time" or straight commission, and every time that has been offered to me, I politely ended the interview and left. Not only do I feel that these type of arrangements unfairly take advantage of the employee, but I also feel that paying technicians, of any kind, commissions/spiffs/kickbacks is unethical and leads to consumer fraud. I frequently look at units which are quite repairable, for a reasonable cost, but a "technician" at a commission-based company tried to high-pressure sell new equipment instead to make a big commission on the sale.

          BTW, I also have to pay for my own tools and equipment, and my earnings can vary from one pay period to the next. This is not a problem, because I base my monthly expenses on 1/12 the annual total, which does not vary much from year to year--not on individual paychecks.

          Comment


          • #6
            Originally posted by bcohen View Post

            Translation: You are/were working for an employer which takes/took advantage of you,
            Actually, I work in an industry that takes advantage of its technicians. But that is just another facet of what brought me to file BK.

            A few days ago I had my 341 meeting. It was held in the local courthouse, in a courtroom, with the trustee sitting at a table, the debtors and their attorneys in the gallery, and creditors (probably) in the jury box, Having the meetings in the courthouse was explained by the trustee to be for safety purposes.

            The first case he called was a continued case, and the trustee's table filled up with an attorney and a creditor, and there was some open discussion over a piece of real estate. This first meeting took almost half an hour and had to be continued again. The trustee became visibly irritated at some of this debtor's answers regarding the real estate, and I thought, man this could be a tough go. My case was down the list a bit, so perhaps there would be an opportunity for me to observe a few meetings.

            After that first meeting, the trustee had technical issues with his voice recorder.. After about ten minutes of trying, the recorder was declared DOA and the trustee said he would proceed without it, then gave a talk about presenting your ID, where you must provide your state ID and SS card on government agency documents to the trustee for the meeting to commence. So the next case after the talk, guess what. They had no SS card. Punt, continued, next. A couple had their meeting, which lasted about 10 minutes, then my case was called.

            It went well, no points of contention from the trustee. He checked my ID's, swore me in, asked about my vehicles, do I own any guns, have a safe deposit box, transferred any assets, expecting any inheritances, own any whole life policies, asked about the house I'm buying but it's CFD. About 10 minutes of basically searching for assets, then he reminded me of the need to take the post meeting course within 60 days, then I was excused. No creditors showed up, not even the holder to my vehicle's title.

            Since my vehicle is worth only about 3000, and it's 18 years old, perhaps they will not pursue a repossession.

            There was some anxiety before the meeting; significant relief afterward.

            Comment


            • #7
              Yes, for most people the 341 meeting is a piece of cake, really nothing but a formality. Mine only lasted for a few minutes. It took way longer to find parking and walk to the courthouse. Of course, the trustee already knew beforehand that I was living in a 440 square foot apartment, and did not own any vehicles, investments, or anything else of value.

              Comment

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