Why Are/Have You Filed BK?

[blackmopar]

very bad mortgage loan/gamble on housing market and large amount of credit card debt as a result

[bookwyrm]

Looking back ours was at least five years in the making with making poor financial decisions along the way, but thinking we were making the right decisions, or in some cases what we felt were our only choices at the time (i.e. using credit cards to pay for property taxes and auto and homeowner insurances when they occurred when we didn't have the cash money on hand at the time).

So in the last five years we have gone through:

Graduation from college with $22,000 in student loan debt.

The death of both of my in-laws because of cancer.

A couple of Hurricanes and tropical storms (with damage to our home as a result).
Job loss because of said Hurricanes and tropical storms because my husband was employed in beach condo construction work at time.

Meanwhile, we got behind on payments but eventually worked them out to become current again, even if we were only paying the minimums.

A move to another state with an all but "guaranteed" full time position with the Air National Guard at an excellent salary.

Upon arrival to said unit a week later for inprocessing only find out that the funding had been pulled for the position and that the Guard unit was leaving for Iraq in four months and my husband would have to go.

Scrambling for and not being able to find a full time job that would hire my huband knowing he would only be there for a couple of months before leaving for Iraq.

We had signed a rental agreement for a house for six months and knowing that my husband would be gone when the renewal came up we decided to extend the agreement for another six months only to be told that the owners would be moving back in to the house and didn't want to renew so we had to scamble to find another rental who would accept pets.

In the meantime, we were using credit cards to live off of and maxing them out. By the time my husband left for Iraq we were behind on payments, again, but I got them caught up while he was in Iraq.

Once he got back from Iraq, he had no trouble finding a job and I finally got a good full time job at the local University and life slowly became good again and we began to pay more to the creditors to pay the balances down a little at a time.

We bought a house and a year later decided to do a refinance that would allow us to pay off a couple of the credit cards, and pay almost all of the balances on a couple more but would still leave us with some equity in the house based on the appraisal.

About a month after we signed the papers, my brother-in-law and my husband got to talking about his job and how they had a lack of qualified (and quality) candidates for the city police department. My husband and I got to talking and realized that we were both miserable in Arkansas and we both wanted to be closer to our immediate families. So my husband applied for the job and was hired.

So off we went to move again to Alabama. But this time we had a savings to live off of until I found a job, which surely, we thought, wouldn't take long because I did have a stable, work background with excellent references. We also had credit cards we could use...

That's when the house of cards finally started to collapse for us. It took me 7 months just to find a job as a waitress (good use of my college degree, huh?). I finally have a part time job with the county now... as a result of my not having a salary it became increasingly harder to rob peter to pay paul.

The house the realtor assured us they would have no problem selling since it was at an excellent price for the neighborhood (priced well below the appraised value). Needless to say didn't sell, apparently the bottom fell out of the real estate market after we left and no one was buying anything (the realtor didn't even sell one piece of property for several months). It became impossible to make rent and mortgage payment and the mortgage company didn't want to work with us. The realtor even came up with some options to try and at least stay afloat with the mortgage payment, like renting, until the market came back and we could sell the property, but no dice with the mortgage company. One option the realtor presented was someone who wanted to do an owner finance, they wanted to put $10,000 down and make payments that would be just a little over our monthly mortgage payment for one year to allow them time to qualify for a mortgage in a year. We got excited and presented this to our morgage company and they turned it down flat. We finally decided out of frustration to just let them have the house if they thought they could do a better job in selling it than we did.

I snicker at them when I realize that they haven't been able to sell it either. They've had a Sheriff's sale and three auctions and still haven't been able to sell it.

We had a small alluminum bass boat that we also finally told the bank to come and get. I will say they really tried to work us though and even when we called them to come and get it they still tried to work with us.

It was after the boat repo and the house foreclosure that I started thinking about bankruptcy when I realized that they could still come after us for any deficiency amounts.

In the last couple of months we have quit paying on anything we intend to have discharged and have turned the ringer off on the phone so we don't have to hear it throughout the day.

We have our signing appointment tomorrow with our attorney and, hopefully, things will go somewhat smoothly from here on...

[samantha625]

It was definitely cc debt that got us into trouble.
I applied for and received my own cc's for the first time in my life about 5 years ago. I had a good job at the time, didn't look ahead. Sure enough, the place I worked closed down. Other things came up, dh was out of work for 5 months, when we couldn't pay the minimum on any of our cards, of course our interest went WAY up, that's where I blame the cc company's, they did nothing to help our situation, just made it worse, then of course we ended up with late payment fees, and it just snowballed from there.
I did learn to never, ever count on what you don't have before you get it. I had counted on keeping my job to pay off my debt, never ever thought about what would happen.
Sigh.... when this is over, I'll never own another cc.

[tomato]

3 years ago, I started my own business, and financed it solely on personal credit cards. At the time, I had great credit and no debt--credit was plentiful and easily available, and had interest rates lower than any loan I could qualify for.

I never managed to turn a profit, but I kept holding on, thinking things would get better. I wanted my dream so badly--being my own boss, working on projects I cared about, doing what I loved--that I turned a blind eye to the fact I was bleeding money away. When I finally realized I'd dug myself in too deep, I had a total mental breakdown. Couldn't bring myself to answer the phone or check the mail, and spent my days shut up at home crying. My husband did his best to be supportive, but he didn't know any better than I did what would help. At my lowest point, I was seriously thinking about just ending it all. I couldn't see a way to fix things.

A few months ago I finally started making some positive changes in my life. I started with little things, like cleaning the house, and slowly moved up to bigger things like actually counting up how much debt I'd racked up (close to $80k now). I still wasn't sure what I'd do about it, but I figured I'd struggle along somehow, and kept making baby steps towards functioning again.

Then a couple weeks ago, I found out I'm pregnant with our first child. Starting a family was something hubby and I were so excited about before the debt, but with $80k in looming bills, it was terrifying news. I started thinking, what kind of life will this baby have if we're struggling just to pay the bills? We already live simply--how many extra hours will I have to work, how many corners will we have to cut, just to have money left over for basic necessities?

I'd never considered bankruptcy before, as a matter of pride. I'd always gotten by on my own, without help from others. But I'm willing to admit I screwed up and sacrifice my pride so that this family can start on solid ground. I'm hoping to file Chapter 7 on my own, without involving my husband, but since we live in a community property state, he might be pulled in, too. I'm meeting with a lawyer in a couple of days to find out what our options are, and in the meantime, I'm educating myself about the process as much as I can.

[greeatscott]

you mean aside the fact that this is a recession and interest rates are being pirated up along with no protections for a U.S. citizen from the banks/credit cards companies' raze and burn for profit tactics other than bankruptcy?

I moved to hell (south carolina), where business owners take advantage of a populace that is from one of the poorest states in the country and severely under-educated. So I had to take a massive paycut to survive. Along with health problems taken care of on a reactionary basis(as opposed to a preventative); Bank of America (affectionately referred to as Bank of Mexico in these parts for obvious reasons) playing games because they have the lobbyists to do so - wanting payments twice in one month, changing due dates; and just about everybody raising percentage rates and minimum payments for no good reason.

Sorry , couldn't hold out any longer

[bk4sky]

Well, I think the credit card companies got what they deserved. They extended way to much debt to too many people who couldn't afford the minimums if they maxed out their cards. Not to mention the way they view your using that credit limit.

yeah i totally agree, i kinda blame the CC companies too....they kept sending me more and more and giving me more credit. they should really change the laws on what those credit card companies can do

[bk4sky]

38k in unsecured debt....

reasons for deciding to file...i lost a great job,
was unemployed for 6 months wich i had to use credit cards just to survive
got a new job...worked my way back up to a good paying job, and thought oh this is cool now i have enough to make the min payments and still have left over for normal living expenses.....that job decided to close due to the economy. had to take a crappy 10.00 and hr job and it was too stresful, i was making just enough to pay the min payments then had to charge for food and gas and had to depend on fam and BF to help me out. it was just too much, it was starting to consume me. so i seen a lawyer and he said im def a chapter 7. so i started making payments to him. i still feel horrible and ashamed i had to do this. i was always the one who had the most money out of al my friends and always going on really nice vacations, now i make enough to eat and put gas in my car. owell....this too shall pass.

[ldsmedia]

Well, I think the credit card companies got what they deserved. They extended way to much debt to too many people who couldn't afford the minimums if they maxed out their cards. Not to mention the way they view your using that credit limit.

[Lajazz947]

Reason for BK

Sheer stupidity on my part and not listening to my wife.

I made great money, still make great money.

Invested $300,000 with a former childhood friend of 38 years and remodeled house and borrowed based on his promise to return the money to me.

He stole the money, I lost a significant portion of my income and borrowed $200,000 to keep remodeling all the while embarrassed to tell my wife and disappoint her.

Now she knows, has forgiven me but i have learned my lesson.

Just started to fill out questionaire so we will see how it goes.

At least my three boys are healthy, my wife is great and I have a great future.

[Pinkie86]

How I Got Here...

My situation all started when my fiance and high school sweetheart of 5 years, injured his back inconjuction with working a factory job that left him suseptible to back injury. At that time we were financially stable, we had never missed a credit card payment, always kept low balances. My credit rating was in the 700's. Just before his injury, his mother had to move in with us. She lost her home because she became physically disabled due to an accident. We began supporting a 56 year old woman, us, and our two dogs.

He had Short Term/Long Term Disability benefits through work up until October 2007, but they were FAR from coming in a timely or consistent manner, so I used my pay and our credit cards to keep us afloat. I graduated from College in May 2007, and started having to pay back my student loans in November. The month of October his job let him go because the doctor would not release him back to work; still won't as a matter of fact.

Since then we've been living off credit cards and I was making a little over the minimums, keeping us afloat, often times with only $15-50 left in the account until my next pay day. September 2007, his mother moved out, and gave us some of her social security money to take care of us. We paid off some debts, dropped $2,000 on the Jeep, and kept $1000 for our wedding planned for 2008. In March 2008, the anniversary of his injury, I finally had to use our savings for our October 24, 2008 wedding, and we officially in trouble. My tax return to went to creditors, and my stimulus went to fixing the car in my fiance's name, which I had to keep payments up on because it's our only vehicle.

At the end of April I missed my FIRST payments to my two American Express accounts. I'm still disgusted that I missed one payment on each card and they did this to me. I continued to pay what I could, but could not make the minimums. Last week they sent my accounts to Debt Collection agencies, and one debt collector made me feel like I was the scum of the Earth. Before calling me, he called my step father and told me I had defaulted on a credit card. Then the collector called me. He actually made me cry, and nearly guilted me into taking out a loan to pay them back. After I told them I would get back with them later, they called me TWO HOURS later to hound me and find out if I applied for any loans. My credit score is now around 657, they say I could still get more credit. At the present time, I am $31000 in debt, NOT counting my Dept. of. Education Student Loans at $10,000, and I'm going back for my Bachelor's Degree this Fall, and have $7,500 in loans coming to me then.

After that phone call I realized how bad it truly was; I'm only 21, but I'm smart enough to realize that a loan is not going to make my situation better, it's only going to make it worse. Before that call I had honestly thought that things would be tight, but if my fiance could get back to work, things would get better, and I could pay it all off in a couple of years. I realized that time was running out, and I needed to keep myself from drowning. I opened up my local phone book and contacted a lawyer I had heard good things about.

I went to see him Friday and he says I qualify for Chapter 7, as I do not have my own home, vehicle or any assets worth taking. I go back to see him next week and turn in the necessary documents next week.

I'm terrified, but I am SO THANKFUL I came across this forum. I'm the type of person who stews and worries and this forum has helped me feel better this weekend, and I'm sure I'll come back for comfort in the future.

[Jason]

Well, I'm new to the forum and it took us a long time to realize that we lived above our means. Some bad investments broke our neck and we thought that we could make it but it didn't work out. So after filing for bk we are of to a new start but this time we'll make things right. At least we are hoping to do so.

[SteveC]

New Here

Hello everyone,

I am new here and I live in the Pensacola, FL area. I have not declared yet. The reason I am where I am is because my wife had to have over 18 surgeries over a 6 year period. We had health insurance but it was not the greatest. We really are very conservative with money. We have mostly bought things with cash. The problem was the medical bills. The copays and deductibles were huge. I was complaining to a friend of mine who told met that if the medical bills got too large to pay, I could not bankrupt them. My friend happened to be a lawyer. He told me the only way to get out from behind what we call "the big 8 ball" was to get a nonsecured loan from a bank or if worst came to worst, put it on a credit card. I had to go the credit card route, at the time, with my wife having surgeries seemingly about 3 times per year, we did not know when or if it would end so the credit route seemed to be the best...and quite frankly, looking back, I honestly cannot say I would not have done it any differently. Anyway, fast foreward to January/February of this year. We were making the payments ok. I am self employed and I ended up catching a very bad case of the flu and was on my back for around 2 and a half weeks. I got behind on one of the cards and they raised the interest rates on all my cards. It was so bad, I could not make the payments. I talked to all 3 cards I had the old debt on and only 1 would work with me so I am working with them. The other 2 would not so I quit paying them. I went back and added up the payments made over the years and I have paid almost twice what I owed. It pissed me off. Since they would not work with me and the payments were so freaking high, I decided not to pay them. Since I live in FL, the laws here and our income and property rights here, they could not take our home, cars, or bank accounts of any kind. They cannot even garnish any wages. I have a plan, I am going to go along letting their collectors call us and not do much. After a year or so, I am going to offer a much lower settlement telling them either they take the lower ammount or I will bankrupt. What can they do? NOTHING. I have had it with the banks who issue most of the credit cards and I am going to war with them. I have the collectors afraid to call me as I have studied the laws from bankruptcy and credit and collections in my state of Florida. I am fully prepared to bankrupt but I will give them a chance to settle.

[vanzskater]

Credit cards.
I was going to school full-time in '05-'06, my father was paying for tuition and my living expense's. He told in May of '06 I needed to find a job, he couldn't pay for school anymore. Finally in October I got a job (where I made less compared to in August of '05, ) from a temp agency; got hired on full-time with the job, my car broke down, because of my excellent credit I got a new truck (got put into a loan I should have never been put in, and found out later the salesman had fudged my income so I could get approved for the loan ), I was getting harassed at my job by a lady who found out I was gay, and I had to quit (that was May '06) I was unemployed for almost 2 months, meanwhile, I was paying my rent, bills, food, EVERYTHING on credit cards.

Got a job, but it wasn't what I was making before, so I was supplementing my income with the credit cards. I still had a gas card that my father was paying (back when I was in college my dad had given it to me), and that helped me out a LOT I was finally getting back on my feet when... he took that from me and now I had to find an extra $200 a month for gas (my new job is 20 min outside of town). So yeah.....

poor choices, credit cards always looming there, and me not being strong enough to avoid them. I've always been poor in managing my money (even as a teen and a child) have never learned to save and I think finally it took all of this to happen to make me see I have a spending problem.

I'm excited though of the future and how I can finally start saving money, and not relying on credit cards, nor falling for the temptation for buying things (which is a HUGE temptation for me).

[Frogge]

My husband lost his job in February, that is what set us on this path.

We already had way to much debt compared to our income. Like 3 times the yearly amount. But somehow I managed to pay the minimum every single month. I would then use the credit cards to pay the monthly bills like phone,internet, gas & electric, food, car insurance, cell phone.

To be 100% honest though. I really had no idea how much debt we had. I had no idea how we were not really making it every month but were just digging deeper into debt. I know that I was stressing for a long time before he lost his job. I had to keep a notebook because there were so many different creditors and I could have very easily lost track.

The credit offers kept coming in. We definately had no self control.

I had thought that if we had no credit bills we would have so much more money but in reality we are just about the same but no longer in debt.

Wow, Momof5, that sounds SO much like us. I had no idea how deep in debt we were until I started unraveling everything to present to the atty. I have so many regular everyday things being charged to a credit card, it's ridiculous. I have a spreadsheet to keep track of who and when we owe.

[momof5]

My husband lost his job in February, that is what set us on this path.

We already had way to much debt compared to our income. Like 3 times the yearly amount. But somehow I managed to pay the minimum every single month. I would then use the credit cards to pay the monthly bills like phone,internet, gas & electric, food, car insurance, cell phone.

To be 100% honest though. I really had no idea how much debt we had. I had no idea how we were not really making it every month but were just digging deeper into debt. I know that I was stressing for a long time before he lost his job. I had to keep a notebook because there were so many different creditors and I could have very easily lost track.

The credit offers kept coming in. We definately had no self control.

I had thought that if we had no credit bills we would have so much more money but in reality we are just about the same but no longer in debt.