Why Are/Have You Filed BK?

[Senior Citizen]

Retired then went broke

My wife and I were doing fine after I retired back in 2002. We took out a Home equity loan to pay off some credit cards, auto (1997 car and a 1998 boat). Then lo and behold we started to raise 3 grandkids. 2 girls and a boy. The boy (a young man now (20 years old)who was my big headache, drugs etc.) He is now in Job Corps.. The 18 year old girl who likes boys to much is out and about but will get her High School Diploma next year. We stll have 1 left an 16 year old girl. Food ,clothing ,medical etc. made us go broke. I had to go back to work so we could eat and buy gas. My wife and I are 71 years old and just filed Chapter 13 God help us.

[Quentin]

Ended up in the hospital in a coma...doctors were surprised I lived...had to see MANY doctors over the last 5 years...then, ended up in the hospital this summer...I finally said "That's it! I am sick of having all of these medical bills over my head causing all this stress!"

I am lucky to be alive, so, I am looking at filing bankruptcy as a blessing. Now I can breathe a lot better!

[pattersonfan]

When I first accumulated the debt, I paid all my bills on time and always. 5 years later, I got sick and landed in the hospital for a month with another month at home for recovery. I Lost my job, I was served an eviction notice by my apartment complex, got kicked out of my apartment 22 days after leaving the hospital, lived in my car for 3 months (where I spent the rest of my recovery) and literally could not pay anything. I used what money I made during that ordeal (selling avon and other shit jobs) to feed myself, get a room 4 times a week in order to shower and put aside to get a place to live. I never recovered and neither did my excellent credit rating. The interest on my credit cards got worse and worse, I had major credit card debt because I lived on them while homeless.

I've learned my lesson. I'm never getting another credit card, I'm buying health insurance on my own and I'm never going to be one paycheck from homelessness again and I'm now in a much better paying job to make sure that doesn't happen again. I now have a plan.

Unlike most people on this board, I do not feel the slightest bit of guilt over filing. These companies screwed me, a "valued and great customer" when I needed them to be understanding. I guess a 5 year excellent payment history is not enough. Screw these companies and I will never be suckered in by them again.

[quest42]

Totally broke ... G A M E - O V E R !!! ... I did it because ...

Silicon Valley lost 100,000 jobs between 2000 and 2003 (many of those jobs went offshore... and the dot com bomb...) according to the San Jose Mercury...

After more than two dacades of very good jobs, I got laid off four times in the past seven years... got divorced... lots of debts inevitably built up while I was in-between those hi-tech jobs... Borrowing from Peter to pay Paul. The credit industry gave me lots of rope to hang myself with! I'd make over $100k one year... then get laid off again... and I'd be job-hunting for many months... making less than $20k the next year each time there was a local boom-bust cycle here in hi-tech... Desperate, I even took cash from my retirement accounts to pay credit cards -- a very DUMB idea -- Got hit hard with tax bills which I could not pay!!! And then, it got worse: for over a year, all I could find was part-time, temporary, hourly work.

As of October 2005:
Assets: $10k
Liabilities: $100k
Income: less than $1k/month: part-time, hourly, temp work...
Expenses: more than $1k/month: just to survive...

I have not used any credit in the past two years... and I put off filing for bankruptcy for over a year, until Mr. Bush made me do it! For two years, I could not even make minimum monthly payments... The exorbitant, compounding interest rates and penalties were killing me, and my credit reports looked like a war zone!

What does not kill us makes us stronger? I filed my Chapter 7 petition - in pro per - on the final day -- Oct. 14, 2005. Now, I feel a great sense of relief, hoping and trusting that the system works as I understand it should... admitting my mistakes, moving forward, being totally honest with myself and with the system, and legally starting fresh with a whole new financial life ahead.

[INA8791]

Job was outsourced to Jamaica for .40 cents an hour, which made credit cards go up since unemployment didn't cut it to live on, and one emergency trip to the hospital without insurance did it for me

[bkfiler]

wow quest42, your case sounds like mine. same debt and income figures too.

i lost my job at end of 2001. used my savings and ira, and cash advances to trade stocks and lost it all over 2 years later. my plan was to trade stocks while looking for work just like i had done before but economy was in the dumps. paid credit cards using everything i had including cash advances.

now for the last 2 years since that, ive worked basic jobs and got laid off again from that one.

i gave up and decided to file bk. ive turned my attention to other work instead. dont know if the trustee will allow trading stocks with the cash advances, switching fields of work after 4 years of not working the high tech field. i paid my bills for over 2 years in that situation and its been 2 years since that. still wonder if they will dismiss becuase i could go back and make good money in the field now maybe. but my desires have changed.

we will see.

[newstart]

I filed for chp 7 for several different reasons. I had excessive credit card debt and medical bills but the main reason is because I put a motorcycle in my name for someone else and they decided not long after getting it in 2001 that they were not going to pay for it (no obligation on their part I was the only signer). I couldn't afford to pay for it and it was wrecked and totaled in the process (no insurance of course) the creditor received a judgement of $16,500 against me which made up the majority of all my debt. Not being able to afford this debt and being a single mom lead me to file for b/k in search of a new start and a chance to restore my credit before my child grows up and goes to college.

[gunsmoke]

Haven't filed yet, but will around feb 06. almost all cc debt. some because of medical. some because charging was so easy to due. mostly because of my gambling habit.

[robivi3]

Gun, under the new law will that all be dischargeable?

[gunsmoke]

Robivi3, prob. a ch 13 because i'm over medium income, same as old law. Most of it will be discharged. Although it's mostly, (and I assume you're refering to the gambling part) is immoral. It's still legal debt. Gun

[angelab]

Just wondering

I was wondering can you please email me personally so I can talk to you in private at [email protected]

several reasons why i filed bk:

my hubby rec'd a better job in another city, even though I had bought a home 1 year previous we moved, but unfortunately now he has a good job and I don't...took a long time for the house to get rented, meaning we were paying rent and a mortgage at the same time....by the time it got rented this Feb, it was too late and I filed BK 3/31.

i have also had tendonitis problems in my hands, and took out a loan so i could take some time off work...this was a big factor in declaring bk. since my health problems prevent me from working full time at what i was doing (office work)

i have 20K in student loans that will not be discharged (probably) and I make a very small amount of money per month...

i filed as one spouse with a non-filing spouse...

[angelab]

just wondering

So what did you end up doing?

My debt came from many things. Irresponsibility being the major factor. Hey, when you are twenty-something, and you have six cards with 5 thousand dollar limits, and one card with a 9 thousand limit, and your parents never taught you how to be responsible with money because they never were, things are going to get out of control really fast. I shudder to think of how excellent my credit once was for my age. I remember the very first card I got at 21. It was Sears. Then came Discover. Then came all the Visa's and Mastercards and gas cards. Gold cards, platinum cards, every card. My error was that I got too many cards and began using them. Then I couldn't pay the bills. While some of the use was good, like car repair, most of it wasn't. I wish there were more programs out there to teach young people how to manage credit and how important credit is in this Country. Young people learn by example, and unfortunately, mine wasn't good at all.

[angelab]

So what did you end up doing?

[angelab]

just wondering

So what did you end up doing and can you please email me and tell me the results at [email protected] because I need some advice immediately?

I guess I would have to pick all four reasons in the poll. My credit issues began during my first marriage almost ten years ago. We moved to a different state together right after we got married and bought a house--both the move and the down payment were pretty much financed with credit cards in my name (x-Husband didn't have any credit). Then the house needed a bunch of repairs, all of which went on my credit cards. Then x-H left, and good riddance really, but while he was still around and was supposed to have been keeping on top of the bill-paying, it turns out he hadn't been. My cards were months behind and had been raised to 25% interest. The banks would not work with me on lowering the interest. I had started going to college by that point and did not have much of an income so I just tried to keep my head above water best I could. I would make the minimum payments, largely through my student loan money, and when home or car repairs would come up I'd charge them. I always paid on time, and whenever I would get near the limit on a card the limit would be raised--I never asked for this, it would just happen. Meanwhile my payments never touched the principle because the interest rates were so high. By the time I was a senior I had about $35K in available credit, even though I only earned about $7/hour at a coffee shop! I wasn't maxed out, tho--at that point I think the total I owed was around $25K. And I can't claim I never wasted a single penny, but at the same time there was sort of a psychological effect to those high limits--I thought they wouldn't be offering me all that credit if they didn't think I could pay it back. I was about to graduate and sure I would get a great job and it would be no problem. I still had good credit so I opened a couple new accounts to take advantage of promotional offers for balance transfers.

Meanwhile I had remarried to a man with a good income so everything looked pretty rosy. We decided to have a baby. We spent that first year we were married, before our baby arrived, paying around $1000/month or more to my cards. We knew we would pay less once we had the baby but we had such a great head start that it seemed like it would all work out. We made a LOT of progress paying it down, and the banks responded by raising my limits even MORE, sending me convenience checks multiple times per month, basically BEGGING me to transfer balances back to cards I had zero-ed out, etc. And we maybe overspent a little on things for the baby--it just seemed like everything was going great. Our combined income was $90K/year, it seemed like we ought to be able to afford a nice stroller. We were planning to move across the state, so we sold the tiny house we were in and started renting a bigger place. Then husband's car died right before the baby was born and we had to replace it, so then in addition to the bigger housing cost, we now had a car payment we hadn't anticipated. We weren't able to send much more than the minimums to the cards at that point, but the balances were all at 5% or lower, so we weren't too worried...it would all work out.

Husband was laid off right after our son was born...and then things really began to snowball. I went right back to work but my salary was only $30K. We would pay the minimums to conserve our cash--then use the cards to buy groceries or other things. I also had medical complications from the pregnancy/birth that even with insurance had high deductibles and co-pays, nearly $5K total. Our landlord wanted to sell the house so we needed to move again, and that's always expensive. Our credit was a little less rosy by that point--it showed high balances and some late payments so the new landlord wanted two months' rent as a security deposit. What to do but write him a big check and put all our other bills that month on the cards. Oh, and our nice low interest rates had gone up to 25% and even 29%, because of some late payments. We were making minimum payments of about $1200/month which weren't even touching the principle. We did that for almost 2 years...when I add it all up it makes me feel sick. I feel like we have PAID and PAID and PAID. I am DONE. For at least a year now we have refused to put even groceries on the cards, and somehow we've scraped by--family help, selling things on eBay, etc. This past month I had to decide whether I was going to pay the cards, or pay for groceries, housing, and daycare. I have to say I think food and shelter come first. We went to see a financial counselor who told us "the math doesn't work" and that our family's immediate needs should come first and to stop throwing our money away on the debt ($48K at this point). It was such a relief to hear we are not bad people for being in this situation. I wish we would have done this a few years ago...it would have saved a lot of stress, but on the other hand we had no idea how much worse things could get, and at the time we may not have even qualified for BK 7 anyway.

So...

Divorce/Separation - check
Long-Term Unemployment - check
Excessive Credit Debt - check
Excessive Medical Bills - check

What we have going in our favor is we are still fairly young, able-bodied, and can recover. We can start using our earnings to pay for what our family needs and to save for education and retirement. We can even have another child. We had been feeling like we couldn't have a second child until our debt was taken care of, which looked like it was going to take ten years or longer...I'm 31 now, my fertility would probably be gone by then. I think that honestly broke my heart more than anything else.

[lostsoul23]

Mine was a combo of medical bills, payday loans, and credit cards. This is why now I refuse to be without medical insurance, won't have a checking account, and if I don't have cash, don't need it. Valueable lesson learned the hardest way. It was a chain reaction - no medical insurance=need for cash till payday=credit cards because paycheck was going towards payday loans.

I suppose I'll have to get lax on that at some point because sometime before I'm 40 I'd like to purchase a home.

Once I get the "discharge" in late Feb/early March, it's going to the lockbox with the "paid in full" letters from the student loans. Then a real will be sounded.