Why Are/Have You Filed BK?

[tay666]

I suppose my tale has been heard a lot.

I worked at the same factory for 17 years.
Didn't make a lot of money but it was enough to pay the bills, and we had gotten to the point where life was at least comfortable. We had a little extra cash for luxuries like a little newer cars. Occasional weekend trips. and eating out a little more often.
Then in 2004 the company we did about 95% of our business with decided to move the work overseas, and the factory I had worked half my life at closed. That was May 2004.
I got unemployment for 6 months. That coupled with with the months vacation pay I got when the shop closed was more than enough to cover the bills. (we had worked a lot of overtime the year before, so my unemployment was actually bigger than my paycheck)
Well, the months went by, and I couldn't find any work at what I had been making previously. One of the biggest problems was, no references. I had the shop, but since it had closed, there was no one to call for a reference.

I worked under-the-table with a local electrician for extra money. So I managed to stretch things until spring 05 when I hooked up with a local building contractor. The work was sporadic as he was just a small time builder, but it was enough to keep things pretty much paid. Though I did have to use a few cash advances to make ends meet. (always the preapproved ones with the low fixed rates)
That worked out until Feb 06. He had no jobs lined up, and the weather was crap.
So, for 2 months I had to live off credit cards, until I finally found another job. Making a lot less than I had at my previous job, or even with the contractor, but it was steady work finally.
Unfortunately. Late 05 early 06, is when the credit cards decided it was a smart idea to boost the minimum payments to "help" people pay off their credit faster. So not only did I have less money coming in, but I also had more money going out.
I managed to cut way back on things and stretch things out by continuing to work with the contractor on top of working my new factory job.
It was going to be a struggle, but it looked like we would be able to pull it off.

Then the other shoe dropped.

All this time, my wife was working steady.
Not nearly enough to support us, but enough to pay her part of the bills. While I kept finding ways to pay my part.
Then the summer of 06 came. She traded in her car and got another one. The payments were a bit higher but she thought she could handle it. Then she started racking up other debt. Shortly after that she was diagnosed with a bipolar disorder (which explained the sudden irrational spending problems). That continued to get worse as the doctors tried to find the right drug combinations for it. So bad that in October she was hostpitalized for most of the month. This caused her to loose the job she was at. Thankfully she got rehired at her previous place of employment. But since then she is limited to only working 2-4 hours a day because of her medical condition. (meds still aren't completely worked out yet)

That is when I decided that there was no way we were going to make things work and started exploring other options.
We went from a combined income of over $40,000 a year in 2004 to under $25,000 a year now.
In 2004 we had debt of about $40,000 including our house.
Now we have over $100,000 in debt.
It didn't help that most of our cards raised our rates from an average of 10% to about 15% after my wife racked up the new debt. Guess our credit scores took a hit with the amount of debt we were carrying.
Now with some of them being past due in October since I was a little busy and too cash strapped to get to the smaller ones before the due dates. Rates on some are 25-30%. I was using cash advances on some cards to pay others while I waited for my wife to get out of the hospital. So things just spiraled the past few months.

About another month or so and we will be ready to file.
Just waiting for my wife's higher income to drop off the 6 month look-back.

[dac67]

FloridGirl, and WhenthePawn Exact same story- I grew up in a family business we had to work 7 days a week and could not get involved in scholl activities due to having to work on the farm. Our salary was figured out YEARLY and we were told the 2-3,000 that would be put in our bank accounts. I look back now and think what a racket my father ran. When we went on vacation we were allowed to take 100.00 for spending.
So long story short my parents never taught me anything about money accept it was always put in the bank.
So when I got out of school and starting working on my own and making good money I felt like i was making millions, I was holding checks in my hand every wee. They NEVER taught me about credit cards and they starting rolling in as well. Well I got them all and before I knew it I was 62,000 in credit debt that was 7 years ago filed Chap 7 was discharged and here we are 7 years later in a chapter 13. We are now finially learning and have vowed never to get this way again. Now we are only like 45,000 in credit/ consumer loan debt but we make half the state median income and I know why we keep getting in trouble, robbing peter to pay paul. We don't buy lavish things , it's not like I go shopping all the time at all. I am in school so I can get a better paying job and we have vowed not to carry credit cards again and we pay cash for everything. I am trying to teach my kids right, something I was NEVER taught. I was never allowed to have money and when I did I was foolish, I had no guidance. GOOD Luck to all.

[possumfat]

My filing was due to the failing of my business in 2002.........debt was personally guaranteed. Had five great years of income but evolution of the internet (buying online, less margin), 9/11 and two customers/companies filing bankruptcy that owed large amounts to the busines put me under. I avoided the creditors for three years but decieded it was best to file before the BK laws changed............plus a couple of the creditors were ready to take me to court, so i files in Oct. of 2005.

[Hagar100]

Excessive credit card debt, 90-plus percent of which I was unaware of until August 15, 2006.

My wife handled the family finances and repeatedly assured me that all was well up until the day the bank called to tell me that we were $2700 overdrawn. At first I thought they were calling the wrong person but I ended up having to scramble and managed to cover the bank overdraft. That night my wife admitted to about $49,000 in credit card debt but the next day, while checking into a home equity loan, I did my first free credit check, which showed $94,000 in credit card debt. It eventually ended being $114,00 in unsecured credit card debt plus about another $3000 that I paid off to local businesses prior to our filing BK. In addition, I ended up discovering that our savings account only contained about 1/100th of what I had been led to believe. As best as I'm able to determine, there's nothing really to show for all of this debt; no luxury items, no hidden cash, the money wasn't gambled away- I think it just creeped up on my wife until it couldn't be kept a secret anymore and then it fell to me to deal with it.

It seems hard to believe that all this occurred without my being aware of it but I did like many of us do and took my spouse's word for it that things were OK. I found that she had gone to considerable lengths to keep the truth hidden from me; having CC's that I didn't know about, hiding mail from me, giving the CC companies her cell phone so that they wouldn't call our home phone, etc. For my part, I deposited the same amount into checking every payday, never used or even saw the checkbook or savings book, and covered my personal daily needs using a small amount of cash that I put in my pocket each payday. I only had one credit card that I personally used, which had a $1700.00 balance on it, which was used mainly to purchase parts to keep our vehicles up and running, with me doing all of the mechanical work myself.

Now my wife and I are separated and likely on our way to a divorce (with 5 kids ranging from 11 yoa to 21 yoa) although, thankfully, this did drive her to finally seek psychiatric help. We filed a Chapter 7 as a couple and it seems to be going well with a status of "awaiting discharge", with the final day for objections being Jan 2, 2007 and none expected to be made.

I was able to hire an atty to represent us in the BK and also paid off the local debts that we owed by my selling the lone luxury item I owned, a Harley that I had owned for 25 years (since before we were married). I now have my own checking and savings accounts and am saving regularly, despite paying all of the bills that accompany having a household with 3 kids still at home.

I am thankful that the chapter 7 seems to be going along without a hitch. I was raised to pay my way in this world, live within my means, and thought that I was doing so. I wasn't excited about the prospect of a chapter 13 as I know that it would fall to me to make the payments for 5 years and I just feel that I've taken enough of a butt-whipping in this already. All I want is the chance to stand on my own two feet again and provide for my family.

The mandatory debtor counseling was a joke- seemingly intended for slow 5th graders. The counselor asked me what I was going to do to avoind ending up in the same position some day and I replied, "I'm getting divorced!"

At work I'm a boss with 15 employees who manages a 1.1 million dollar budget to within a fraction a percent every month. I'm able to do so because I have the information necessary to make good decisions. I am achieving this again in my personal life and for that I am truly grateful.

[bige1030]

Excessive Credit Debt

I made some bad financial decisions, especially in terms of buying my first car. I couldn't afford the repairs it required, and I put them on the credit card.

I've suffered from mental illness for quite a while and started getting treated a few years ago. It's cheap sometimes, but it gets expensive at other times. I had a hard time finding a good, affordable therapist until this summer - when I finally found one.

[lost11]

Excessive Credit Debt

Made horrible financial decisions and over spending! Started a business with 5 mouths to feed and no savings. All monies earned went to start up and personal living expenses and now outstanding debt gets worse everyday!

[pambysue]

Hi Catchme! I too am a gambler. I didnt use CC because I didnt have any credit left on them! but, i became addicted to online gambling and used my debit card from my bank account. then when payday came around, i was falling short due to overdraft fees, etc. Then there was nothing left over to pay any of my bills. I am surrendering my house and have found a nice duplex where my daughter & I can start over again. I so want this ALL behind me!! I am filing chap 7 in december when my income shows at below the median for NY. I have absolutely NOTHING to show for all my long working years. I wish I could turn back time and live my life differently, but..I cant. All i can do is learn from my mistakes..and God willing..get a fresh start!

[Faith]

My husband lost his job in 2001 and we sold our house and lived off that and his 401K. In the year that followed, we ended up with $100,000 in credit card debt (we had a lot when he lost his job already) plus we also had $550 a month in student loans. Over the next 4.5 to 5 years that increased to $120,000. When the credit card companies raised our minimum payments and interest, we couldn't make it anymore. We finally filed for BK after the bank seized our rent payment out of our accounts.

[PenneyP]

Job injury

We bought a house in September of 2005. In December 2005, my husband was injured on the job. He hasn't been able to work since then - so the bills piled up and we finally had to file bankruptcy. The company he worked for is still fighting us in court - they don't want to pay workman's comp. And he can't file for disability until the workman's comp thing is settled. So we filed bankruptcy because my husband hurt his back (4 ruptured discs) while working for a company he'd been with for 10 years, and they are being heartless . . . . . . . can't think of a word bad enough for them . . . . and because of that, we had to file bankruptcy or lose everything we have . . . .

[CATCHMEIFYOUCAN]

Catchmeifyoucan, here: cuz i'm a gambler, and still am, i just don't have the credit cards to play with anymore.

catchmeifyoucan

[pv34pv3p]

Factors:

1) 16 years of 0 child support...Never sought it...never complained. Can you say stupid?

2) 22 Years in the Navy...Saw the World/Priceless Memories/Never had the $$$ to qualify for a mortgage...See #1

3) 3 years as a franchisee...Nickled and Dimed to death...No good can come from signing a 200 page contract...


pv34pv3p(it's only money...)

[GoingUnderInNV]

Working a great job, great pay, killer hours (three day weekends EVERY week)... Company sold out my job to India (or Pakistan... like it really matters). Moved away from area because of ZERO tech jobs, and Seattle was in a SERIOUS tech rut at the time, so I landed in Reno. Took six months (with requisite draining of savings account paying credit card bills) to find a decent job (read: 1/3 less than I was making before). Just didn't have the money to pay the two big credit card bills that weren't even a blip on the radar at my last job. Fast forward a year and a half, and MBNA doesn't even want to discuss payment plans, so they forward my account to a law firm (Mann Bracken) to do their dastardly business. They chose to drop a bomb, and now I've chosen to send a nuke their way. With the new laws we (the People) have given these credit card companies carte blanche to do whatever they want, so I personally don't give a hoot if they lose money. Period.

I'm Steve, and I'm in Chapter 13. Proudly now, given the behavior and (in my eyes) unethical practices of two credit card companies. Screw 'em. My life will go on, I have plans to recover, and I'm not looking back. I also won't sign ANY credit application EVER AGAIN that contains this mandatory (ie, predatory) arbitration hogwash.

[monlyba]

~ $40k+ in student loans that i haven't even started repaying (graduated 5 yrs ago!)

~ high cc debt due to the way they "throw" any kind of credit at college students (my parents were never good with credit either so i only viewed cc's as money to spend - no long term plans for repayment - i didn't really know any better)

~ living with a roommate who convinced me it was "no big deal" for us to break leases at more than one place, therefore owing them for the rest of the year's rent

~ i chose an industry that is known for its low pay because it's what i was/am passionate about (non-profit/human services) so every job i have had is low-paying

~ high car payment for crappy car due to high interest rate b/c of my bad credit... but had to have transportation, and with bad credit all they want to do is put you in a new car... so of course that means being upside down for a couple of years at least

~ had a baby last year and racked up medical bills for me and her, and haven't worked since i can't find a job that justifies the cost of daycare

hmm, what else... i guess those are the main factors! ignorance, employment issues, family financial situation, etc etc etc!!

[drivermom]

Irrespondsibility and living beyond my means

I also have had a few bouts with depression, vertigo, 2 surgeries since January and a car accident. I missed alot of work and didn't get paid for part of it. Mostly it was my own irrespondsibility and not paying my mortgage.

[NCfellow]

A couple of months after we moved into our new house my wife's job was terminated. She was in school at the time and pregnant with our second child. We basically lived off credit cards during 2 1/2 years. We figured we'd be able to start paying it all off after she graduated. This wasn't the case and now we have to file. Our future combined income won't cover our expenses! She starts in a couple of weeks and we plan on filing in a month.