Why Are/Have You Filed BK?

[killinstinct]

Mastiffmom:

First of all, congratulations on having the courage to take this important step.

When you're ready, recognize that you must deal with the UNDERLYING issue to have a successful bankruptcy. That probably means the depression, in your case. You don't want to end up in trouble again, post-BK.

[qsr]

I think this story is probably changing here in the past 8 months or so, as opposed to when this poll first went up. I have yet to file, but am leaning towards it. $60k+ in unsecured debts plus $25,000 in IRS/School Loans. I lost my job in October and have failed to find anything remotely near what I was making. I think filing bk and unloading some of the debt would really open my options up so I can find work--maybe even something I'd be happy doing. Almost all of my debt has been run up in periods of unemployment over the past 5 years, as I have had trouble finding steady work. When I get a job, it tends to pay pretty well, but they really come and go. Part of the problem is that I'm not entirely happy with the line of work I've been in, so it's hard to find motivation. This would be the "underlying problem" that needs to be addressed.

But with the post-Bush economy, it doesn't look like things are going to improve enough to the point that I'll ever be able to even keep current on my debts. I'm going to file as soon as I can sort out a rework on my mortgage.

[bktmom28]

Things finally came to a head.

First off, I just want to thank you for setting up this forum. I, like many others of you out there, never thought I would be in this position. I am 29, my husband 28, 3 kids, a mortgage, and $40000 in credit card debt. It all started back when we purchased our home in 2002 for $97000. We had a comfortable house payment, a tiny bit of credit card debt and a baby on the way. Things were very good. We felt very blessed. After we had our baby, we had a hospital bill of over $3500, and we did have insurance. That was our portion. We were in shock. We decided, still not sure why to this day why we did, to buy an SUV. We had a car that was paid off, and suited us just fine. I would say we were just stupid. Wanted to keep up with the Jones' and not be grateful to the Lord for what He allowed to have. We financed a $16000 used car that turned out to be a lemon. We were stuck with a car that we were putting money into 6 months after we bought it. Big money...had to replace the transmission. We were heading down without even realizing what was taking place. Anyway, we have figured that is where it started. From there things got better and worse. My husband got a new job, which dropped our pay temporarily, so we decided to take out a second mortgage. A few months later, we saw how easy it was and tried to get a little more money, each time our home appraised really high! Woo hoo! We were stoked! Some time later, in 2005, my husband and I got a phone call from the same broker that helped us get into our home. She told us that we could get into a 3/1 ARM that would consolidate all of our credit cards and we would have one payment. That sounded great. She told us something about our rates increasing in 3 years, but that wouldn't really affect us as we were planning to sell our home in 2 years anyway. Once again, we were young and stupid. Well, 3 years later and another 2nd mortgage later, our rates jumped. We were stuck with a $1200 mortgage payment and no sign of relief. We only had about 10000 in credit card at the time. Well, my husband had been informed that they would be hiring apprentices the following year. He prepared by taking 3 months off of work so that he could attend a vocational training school. I knew how deep in debt we were but I did not tell him because I knew that if he had any clue, he would not go. This was something that he needed to do so that he can further his career. Well, needless to say, we paid everything with credit cards, bought our kids Christmas presents with credit cards and felt sick everytime we pulled the stupid plastic out. I tried throughout this entire time to work out a loan modification, never missed a payment, which ended up working against us, then, had all of our credit cards jump from just under and average of %9 to over %30. We could not keep up. Then, another blow, they would not be hiring apprentices for another year. Great! Now what!
This past month I went and talked to CCCS and was advised that we needed to talk to a BK attorney. I was shocked. I knew we were in deep, but never had a clue. At first, I wanted to throw up. How could we have been so dumb? We are not big spenders by any means. We just allowed this idea of how things were "supposed to be" to cloud our view. I went and spoke to an attorney and she too looked at our income and said we most definitely qualify for Ch7. We will be giving up our home because we are $60000 underwater. I do feel like this will give us a clean slate. I will not ever hide anything from my husband again, and we will never again be using credit cards. I am almost done with the paperwork, but we are in the process of moving from our home to a rental, because our attorney told us that the trustee will want to know what we are doing with the money we aren't spending on our mortgage and CC debt.

[lostinnola]

Well I must say it was a mixture of bad financial decisions that put as at living at our means combined with a relocation that did not exactly work as planned. My wife and I purchased a house in 2006, right at the top of the housing boom. We also took out a home equity loan on the house which we consolidated some of our debt and spent money we shouldn’t have. Both things were big mistakes. Within a year or two our son was born. My wife was relocated to work that was about an hour drive each way. With gas at $4.50 a gallon, we made the decision to move closer to her work. With our house now under water by $50-$60,000, there was no way of selling it. We decided to rent our house out, but it was at a loss each month. We bought another house closer to my wives work (another bad move). Up to this point, we were broke but we had never had a late payment on anything. A little time passed and I was accepted into an alternative certification program to be a teacher in high needs schools (very similar to Teach For America where you get placed into a school and make a full salary). I would not get paid for 3 months, but would end up getting paid a full teacher salary. My wife and I thought about it and prayed about it and decided to make the move. We knew that we had enough savings/retirement money to make the move and not miss a single payment. We sold our condo via shortsale and moved 800 miles from home. The issue we ran into was that my wife ended up getting a job paying less than we expected and I was never placed into a school. First time in history the program I am in was never ever able to place someone. Teach For America has over 50 people without positions as well. As a result, I am now substitute teaching. Combined, we are making about $30-$40,000 less than we expected and $50-$60,000 less than we did the year before. While we are not proud to do it, we feel as though this will give us a clean slate and allow us to make much better financial decisions in the future.

[militarybrat]

My story went on for a while. I was very young and stupid. Went to college where they put credit card apps in the bags at the school store. Applied for some of them. Didn't use them. Freaked out over the amount of student loans I had ($30,000 between Fed and Sallie Mae at the time) came home to try to fix it. I enrolled at the local community college and took out a mixture of Pell Grant and student loans. In my very first semester at the community college I was driving down State Street in Salt Lake City and got into a car accident. I t-boned another car; she never saw me, she claimed, and attempted to drive against six lanes of traffic to get to the other side. My car was totaled and I was left with a back injury that came complete with a note from the doctor advising me not to lift, push, or pull more than 10 lbs for at least 6 months; he later extended it another 6 months. Being unskilled, and in Utah, where the young are a dime a dozen and having no good or bad affiliation with the local dominant religion, I could not find work for anything, especially when I told them I could not lift much. I got depressed. It was later revealed that the other driver in the accident, who was at fault, had no car insurance. So my parents and I had to pay my deductible to get my check to replace my car. I ended up with a lemon, a Saturn that has cost me thousands to repair, but I could do no better because I could not find work.

In 2006 I ended up at Macy's, where being around so much nice stuff was a major weakness. I racked up debt like there was no tomorrow while working there. I was laid off in February as Macy's was redoing the store since it had once been a Meier and Frank. I then worked at a Blimpie's and never got a pay raise. The woman who ran the place was not the smartest. She let the teenaged help play hockey in her store with the raw cookie dough and never fired them for it, despite many customer complaints and eventually there was no business at night, so she cut everyone's hours. Despite the fact that I had always been a hard worker had always showed up and did my job and got along with most of the customers, I got my hours cut. And then a fun thing began: my paychecks from that job began to bounce. The third time this happened, my bank told me that they would no longer cash my paychecks. I ended up quitting.

I quit working for a while because I wanted to go through CNA school and was still going to the community college. At this point I was only going to school because I did not make any money and could not repay my student loans. My grandmother, grandfather, a good friend and my dog all died during this time. It was an awful time. I just kept spending and spending money on the strangest of things. In hindsight, it was all stupidity. I've always wanted to move back to Nevada, which is where I am from, and I should have, there were jobs there once, and people seem to do better there. But I did not.

I finished CNA school and thought that I had an ironclad way to avoid being laid off. Everyone says that anyway: the medical industry always needs help, the medical industry is ALWAYS hiring! The economy began to decline in Utah; my first job was as a hospice aide. The census dried up so bad it wasn't funny. It went from 65 to 29 in a three month period. People were moving in with their dying loved ones or their dying loved ones were moving in with them; they felt there was no need for hospice. Half the people where I worked were laid off. I was one of them. It took me three weeks to find another job; I got lucky and found a full-time one at a facility. The census began to dry up there, too. Families were coming in talking about job cuts and lost hours; they were downgrading the rooms their loved ones were staying in and some others were pulling their loved ones out of the nursing home because they needed the loved one's SS checks to keep from losing the house. The census went from 62 to 40 in three months. People were laid off; hours were cut. I was one of two laid off entirely; others went from full-time to part-time.

I have been unemployed for a month and a half. I can't seem to find work that is beyond PRN (as needed) because no one needs CNA's here, I swear. I've got friends who just became CNAs who cannot find anything; my uncle teaches RNs and tells me that new RNs can't find work either. So don't believe that medical is doing that great; its not!

Ultimately I ended up in BK because the first CNA job loss almost killed me. I missed a payment once (they did not report it to the credit bureaus though) and the payment became so bad that my entire first paycheck from the new job went to it and I had to pay for gas for my car to get to work with a CC. So when I got laid off a second time, I decided I was going to continue to contribute my share to the family grocery bill and keep the car going. As a result I ended up filing. I felt there was no other way. CitiBank has no interest in cooperating. They even raised my interest rates in January, increasing my minimum monthly payments.

Funny thing is, I've always wanted to move back to Nevada; its where I am from; had I played my cards right, I could have been there years ago and not have had to deal with being so underworked and having less than stellar jobs. My dad's boss owns a business in Vegas; they paid well, I could have ended up there. For some reason, even though I honestly hate Utah, I never did take them up on it. Now I am hoping the receptionist down there will quit or they will need a new one.

So when I say I made some stupid choices, I'm not kidding!

[debtprison]

This should tell the story:

1999 income - $50,000 Liabilities: $2,000 Age: 21
2000 income - $36,000 Liabilities: $6,000
2001 income - $32,000 Liabilities: $12,000
2002 income - $21,000 Liabilities: $17,000
2003 income - $13,000 Liabilities: $40,000
2004 income - $10,000 Liabilities: $20,000 Chpter 7 filed 2003 Only secured/priority debt remains.
2005 income - $11,000 Liabilities: $24,000
2006 income - $11,000 Liabilities: $30,000
2007 income - $11,000 Liabilities: $37,000
2008 income - $12,000 Liabilities: $55,000 ($45,000 secured/priority debt)

Note: figures are estimates only.

Declining Business, IRS debt, Student Loan debt.

[kc1985]

very long story made very short...Family business went under due to a partner that got into drugs. Took the entire family down with it. Then, couldnt find another job until it was too late.

[OverItinVA]

For us it was plain old stupidity! Our motto was "as long as we can make the payment each month we can charge it". We were so busy trying to "give our kids everything that we never had" and we lost sight of the reasons why our parents had us go without...they didn't live beyond their means! I paid the bills and when our credit card debt ran up to $25K applied for a line of credit to consolidate our payments into one bill with a controlled interest rate with the promise to myself that we would close all but one of the cards. Well, life happened...no raises, higher taxes, car repairs, outrageous gas prices, etc. etc. etc. so we never closed the cards and started charging to the cards again only to max them out once again. Knew we were getting into trouble when we were buying groceries on our credit cards because we had no cash left after making the payments...then the economy crashed and our interest rates went up to 30% and we realized that we couldn't make even the minimums anymore.

This whole experience has been very sobering...if we can't buy it with cash we won't get it. I will not become a slave to Visa/Mastercard/Discover/AmEx or any other credit company again!

[bktmom28]

For us it was plain old stupidity! Our motto was "as long as we can make the payment each month we can charge it". We were so busy trying to "give our kids everything that we never had" and we lost sight of the reasons why our parents had us go without...they didn't live beyond their means! I paid the bills and when our credit card debt ran up to $25K applied for a line of credit to consolidate our payments into one bill with a controlled interest rate with the promise to myself that we would close all but one of the cards. Well, life happened...no raises, higher taxes, car repairs, outrageous gas prices, etc. etc. etc. so we never closed the cards and started charging to the cards again only to max them out once again. Knew we were getting into trouble when we were buying groceries on our credit cards because we had no cash left after making the payments...then the economy crashed and our interest rates went up to 30% and we realized that we couldn't make even the minimums anymore.

This whole experience has been very sobering...if we can't buy it with cash we won't get it. I will not become a slave to Visa/Mastercard/Discover/AmEx or any other credit company again!

I couldn't agree with you more! We will never be slaves to debt again!

[jdcat]

Hello to all, new here. I've been reading here for a little while because I'm (obviously ) considering bankrupcty. My story is pretty much a repeat of what others have shared about their experiences, the only difference being that we don't owe as much, maybe 24k with a mortgage and two car payments that we would like to reaffirm.

One thought that kept appearing as I've read through this forum is that my husband and I were definitely living beyond our means. I guess raising a family of 5 on one income can look like that. And that's what put us in the dog house, living off one income ( until a year ago ) so I could stay home with the kids.

I'm now working and with our combined wages we aren't making it. Groceries are going on credit and credit is about to run out. We do not want to open another cc account. There is absolutely no where to turn *except* bk. And we have nothing material to show for all of our debt! That's the kicker.

Am looking forward to reading and learning...and terrified to stop paying our creditors.

[bktmom28]

Hello to all, new here. I've been reading here for a little while because I'm (obviously ) considering bankrupcty. My story is pretty much a repeat of what others have shared about their experiences, the only difference being that we don't owe as much, maybe 24k with a mortgage and two car payments that we would like to reaffirm.

One thought that kept appearing as I've read through this forum is that my husband and I were definitely living beyond our means. I guess raising a family of 5 on one income can look like that. And that's what put us in the dog house, living off one income ( until a year ago ) so I could stay home with the kids.

I'm now working and with our combined wages we aren't making it. Groceries are going on credit and credit is about to run out. We do not want to open another cc account. There is absolutely no where to turn *except* bk. And we have nothing material to show for all of our debt! That's the kicker.

Am looking forward to reading and learning...and terrified to stop paying our creditors.

All I can say is if you are considering it, stop paying now! I wish that we would have known that going into this. All of our payments were going to interest and we were paying creditors before buying groceries which was a HUGE mistake! All of our years of paying on time and more than minimum balances didn't stop them from jacking up interest rates and adding new fees to our cards. Mortgage companies wouldn't assist us in a loan mod and pushed us over the edge. I also found a great way to avoid the creditor calls. Sign up for Google voice. Once they start calling, they pretty much want a place to leave messages. I signed up for one when the call started, changed all my contact info and received very few calls after that. Hang in there and truly know that BK is not the end of the world. It has been the beginning of a new one for us!!!!! We are also a family of 5 and truly never thought we would be in this place, but BK was put in place by our forefathers for a reason. I believe this is what is was intended for. Giving people a new life and a reason to do things right the next time around! Good Luck and Lord Bless!

[OnTheRocks]

I look at the long term view in regards to my upcoming BK. In 1992 I was making $23.50 hour. My job I was canned from a year ago I was making $23.50 hour. WTF??? I think I could manage the debt fine if pay kept up with cost of living.

[SURV69]

I was married three+ years ago to a woman who loved to watch QVC and spend money. She always bragged tht she had a nackfor picking the most expensive things.

Money was tight and I always told her to curtail spending and return items she didn't want(about half of what she bought, she never even opened). I put her through college(and did most all of her reports etc..), and she got a decent job paying about $37k.

One night she asked me for a divorce.

I gave her most everything of value(including the house) and moved into a mobile trailer . . . cheapest for a person to live as long as one's not trying to impress people . . . best move I've ever made. I don't pay support and no kids were involved.

ANYWAY, I had a medical issue hit me in December of the first year of post-divorce. My sugar lever shot to about 500 and I went to the hospital . . . gawd, the thngs they bill a person for is unreal.

I then had a problem with my heart, have a 40% blockage and I'm marked as having heart disease. I can throw in my long standing fractured back(two different times and arthritis. I have been overworking my body for years.

ANYWAY, I've been in and out of hospitals more times in this past 2 years than the total of all my brothers in their lifetime.

BTW my three older brothers are all dead . . . all before 60 . . . all different causes and the last death being last summer. This has weighed heavily on me. My only other brother has bad medical issues(Iraq based . . . I think), and I'm looking at life differently now.

My business revolves around the need for houses to be built an properties to be sold. I'm a surveyor, and this man-made disaster/depression has hit my profession exceptionally hard. My earnings are down 50% in the past year, which were already down over 40% from 4 years ago. In the second half of 2009, I've had as many deposits as I would've had in a month, 4 years ago(thankyou ex-wife) . . . my last "normal" year. I see a worse year coming up.

I was one of those guys who set up all my payments on auto-pay and whenever I'd go to the bank I'd make extra payments. Those days are gone and even though the bank once told me I had "15 months credit", on my loan(which I didn't uderstand since I ALWAYS told them to apply extra money to principle), when I missed payments they'd be on me me like flies on xxxx.

SO . . . I sort got a quadruple wammy with the divorce, medical issues, brothers dying and the economy. All this added together spells "Depression" . . . me and the economy have something in common.

Thank God, my sister "finally" talked me into going V.A.. At least the medical bills no longer pile up.

BTW . . . I tried to tagged multiple reasons in the poll . . . didn't work.

[jshep]

I was the second generation in a three generation family business. Various members of the family over the years would loan money out to the company, then we would have a big month and pay it back.

Then 9/11 happened, and it impacted the company in a big way. After that we kept loaning money, but the company never had that big month ever again. That kept going on until 2008 when the economy really tanked. The company went under owing me over $200,000. I also got hit with about $200,000 in personal guarantees for company credit cards.

Right after the company closed, I was able to get a job making the same money I did before, and I kept up all the payments. Then, I got laid off for six months. At that time I fell behind. When I was rehired recently, it was with a 50% paycut. After that it was really hopeless.

After the bankruptcy, I'll still have the $200,000 I loaned the old company on my home equity line that I have to make payments on, but I at least will get out from under the $200,000 in unsecured debt from the personal guarantees, which I should be able to manage. As the economy improves, I should get closer to my old pay again.

It's one of those things that I never thought I would have to face. We thought we would always have our own company, and that would be the answer to everything... but, it wasn't. I am in my 50's, so if it were not for being able to file bankruptcy, I doubt I would live long enough to ever pay the money back.

[nc73]

Cuz I thought the grass was greener elsewhere. Boy was I wrong, my salary kepting dropping and now I just don't make enough.