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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Fri Nov 02, 2012 8:33 pm 

Joined: Mon Oct 29, 2012 3:11 pm
Posts: 49
alohabear wrote:
Then I have no desire to continue with this thread. Good luck to both of you, 'cause you're gonna need it.


Yep. Agreed.

Best wishes to you.


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Sat Nov 03, 2012 8:13 am 

Joined: Thu Jun 23, 2011 3:24 pm
Posts: 88
tdcgd0507 wrote:
babysteps wrote:
As someone who has semi-recently been through bankruptcy, I would vote for 'gut it out' in your situation.

***OK. Thank you for the encouragement. Is going through a bankruptcy a total nightmare?


Yes, bankruptcy can be a total nightmare. Although I am sure someone has had an 'easy' bankruptcy...we didn't.
And really, bankruptcy isn't designed to be easy, it's designed to be a last resort.

We like our new less-spendy lifestyle very much, but if we could have gotten here without bankruptcy we would have!! It would have been a lot cheaper, calmer and faster.

(too many details on the process:)
In our case we were in a bit of limbo from filing date until discharge, which took us almost 2 years. Our bankruptcy Trustee needed to approve almost anything we did (including a master budget, at least that was only a 1x approval). We also spent about 2 yrs before filing trying to find solutions that would avoid bankruptcy. We did have personal businesses so it wasn't a "plain vanilla" situation (but it was a personal bankruptcy, all the businesses we closed or had to show that they had no net assets).

One creditor disputed our bankruptcy, and although that creditor eventually dropped the suit (it wasn't really credible in the first place, but hey they gave it a try) it held up the process for an extra 12+months. That about doubled the total legal fees. There were also several pre-filing creditor suits but the bankruptcy filing basically resolved those.

It took weeks to collect, organize & scan/copy the necessary documents ahead of the filing date (a full bankers file box, so thousands of pages), although it was good that I had done this because it helped us in the creditor suit. Official filings alone were over 100 pages (many more pages of backup, plus the required documents for the creditor suit).

We also had the required official appearances (and more by our lawyer).

Oh, and the lasting impact on our credit which made personal debt pretty much impossible until about a year after discharge (in our case we tried keeping one credit card current in hopes it would be usable, but once we filed bankruptcy the issuer cancelled it).


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Sat Nov 03, 2012 9:22 am 

Joined: Mon Oct 29, 2012 3:11 pm
Posts: 49
babysteps wrote:
tdcgd0507 wrote:
babysteps wrote:
As someone who has semi-recently been through bankruptcy, I would vote for 'gut it out' in your situation.

***OK. Thank you for the encouragement. Is going through a bankruptcy a total nightmare?


Yes, bankruptcy can be a total nightmare. Although I am sure someone has had an 'easy' bankruptcy...we didn't.
And really, bankruptcy isn't designed to be easy, it's designed to be a last resort.

We like our new less-spendy lifestyle very much, but if we could have gotten here without bankruptcy we would have!! It would have been a lot cheaper, calmer and faster.

(too many details on the process:)
In our case we were in a bit of limbo from filing date until discharge, which took us almost 2 years. Our bankruptcy Trustee needed to approve almost anything we did (including a master budget, at least that was only a 1x approval). We also spent about 2 yrs before filing trying to find solutions that would avoid bankruptcy. We did have personal businesses so it wasn't a "plain vanilla" situation (but it was a personal bankruptcy, all the businesses we closed or had to show that they had no net assets).

One creditor disputed our bankruptcy, and although that creditor eventually dropped the suit (it wasn't really credible in the first place, but hey they gave it a try) it held up the process for an extra 12+months. That about doubled the total legal fees. There were also several pre-filing creditor suits but the bankruptcy filing basically resolved those.

It took weeks to collect, organize & scan/copy the necessary documents ahead of the filing date (a full bankers file box, so thousands of pages), although it was good that I had done this because it helped us in the creditor suit. Official filings alone were over 100 pages (many more pages of backup, plus the required documents for the creditor suit).

We also had the required official appearances (and more by our lawyer).

Oh, and the lasting impact on our credit which made personal debt pretty much impossible until about a year after discharge (in our case we tried keeping one credit card current in hopes it would be usable, but once we filed bankruptcy the issuer cancelled it).


Ouch. Thank you for your honesty and frankness. I really appreciate it.

Once we are out from under our mess (5 years, 10 years, 20 years?), I look so forward to that easier, calmer life-style that you mentioned.

Many blessings to you.


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Sat Nov 03, 2012 5:31 pm 

Joined: Tue Jun 30, 2009 9:44 pm
Posts: 246
Location: Atlanta, Georgia
tdcgd0507 wrote:
CatchingUp asked:

For example, even if you didn't literally call her stupid, could any of your words or actions have conveyed that message?

DDW - I have NEVER called her a name.

. . .

I readily admit my faults. She does not.

DDW, you seriously need to re-read your own post from November 2 at 9:12 p.m. I don't think that you are actually hearing yourself because that one post alone was full of insults towards your wife, though you deny ever calling her a name and claim you admit your faults. I am not saying that either you or your wife have more blame or whatever, just that you seem not to hear how you are coming across. In that one post, you call her "over-sensitive," that she wants to "kill [your] personality," she's impossible to please, full of "drama, drama, drama," the "most black and white, passive/aggressive person that I have ever meet in my entire life," full of "hatred and rages," of all the women you've dated "NONE, have ever had the drama and UN-pleasability of this one," and she speaks in "insane and usually untrue strawmen and loaded language." If you're not seeing how incredibly insulting this all is and that she would be emotionally hurt by it, then you really are not paying attention and/or are in denial. All of this would qualify as calling her names in my book.


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Sat Nov 03, 2012 6:07 pm 

Joined: Mon Oct 29, 2012 3:11 pm
Posts: 49
LeRainDrop wrote:
tdcgd0507 wrote:
CatchingUp asked:

For example, even if you didn't literally call her stupid, could any of your words or actions have conveyed that message?

DDW - I have NEVER called her a name.

. . .

I readily admit my faults. She does not.

DDW, you seriously need to re-read your own post from November 2 at 9:12 p.m. I don't think that you are actually hearing yourself because that one post alone was full of insults towards your wife, though you deny ever calling her a name and claim you admit your faults. I am not saying that either you or your wife have more blame or whatever, just that you seem not to hear how you are coming across. In that one post, you call her "over-sensitive," that she wants to "kill [your] personality," she's impossible to please, full of "drama, drama, drama," the "most black and white, passive/aggressive person that I have ever meet in my entire life," full of "hatred and rages," of all the women you've dated "NONE, have ever had the drama and UN-pleasability of this one," and she speaks in "insane and usually untrue strawmen and loaded language." If you're not seeing how incredibly insulting this all is and that she would be emotionally hurt by it, then you really are not paying attention and/or are in denial. All of this would qualify as calling her names in my book.


OK.


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Sat Nov 03, 2012 6:20 pm 
Moderator

Joined: Wed Sep 23, 2009 9:01 am
Posts: 5205
To both of you...

We are halfway through the weekend. I hope if you are both serious you have had a heart-to-heart talk and have nearly completed your plan.


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Sun Nov 11, 2012 1:30 pm 
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Joined: Wed Sep 23, 2009 9:01 am
Posts: 5205
Do you have an update for us?


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Mon Nov 12, 2012 5:52 pm 

Joined: Mon Oct 29, 2012 3:11 pm
Posts: 49
DoingHomework wrote:
Do you have an update for us?


Thanks for checking. We agreed on a six year plan to pay off all of our unsecured debt. I don't know if it will work or not (the variable of her being self-employed makes me nervous, it seems like most self-employed folks have 'feasts' then 'famines' seasons...)

So, we are not looking at bankruptcy at the moment. We have a written plan to pay of our 33k is CC debt. The time frame is a max of six years.

Don't do if we can do it or not . . . but having a plan now that is written down on paper eases my mind a little.

Dean


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Tue Nov 13, 2012 3:10 am 

Joined: Mon Feb 04, 2008 7:35 am
Posts: 1140
Location: Maryland
That sounds good, but let's see it here in writing. We'll let you know if it's feasible or not.
By the way, you seem much calmer in this post. This is a good thing.


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Tue Nov 13, 2012 5:14 am 

Joined: Mon Oct 29, 2012 3:11 pm
Posts: 49
peachy wrote:
That sounds good, but let's see it here in writing. We'll let you know if it's feasible or not.
By the way, you seem much calmer in this post. This is a good thing.


Putting things in writing, helped to make me calmer.

I don't know if you'll be able to make much sense out of it (nothing about the intelligence of the forum - problems on our end being able to clearly state it on paper - formatted).

Still, for me, the big unknown is my DW's monthly income. If she can average 1K per month it is doable. If she does not average 1K per month . . . Hmmm . . .

DW came up with the rough draft below -- as far as expenses, we dropped our cable TV saving us 50 bucks per month. I wish she would drop her therapist, that would save us another 50 bucks a month. But, she thinks the therapist is helping her. OK. One can not put a price tag on one's health - be it mental or physical - its all connected.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^


Here is just one possible option for a 6 year pay off plan.

Citi 1% ends 10/14 ….73 $7,260.81

Barclay/0% until 10/13 watch for BT $9,656.49

Chase 3% for life….61 $3,296.08

Chase 2% ends 4/14..77 $9,694

Discover..45 $627.28


Citi …73 - 6 divided by 8000 = 1,333.33 12 divided by 1,333 = 111 So if paying 120 to it a month it will be paid off easily in the 6 years. But since 1 % ends in 2 years would have to watch for another BT when gets close to ending that is close to as good of a deal at least.

Barclay - 6 divided into 10,000 = 1666.67
12 divided by 1666.67 = 138.89 Plan to send 140.00 each month.
Would need to watch for a BT before 10/13

Chase..61 - 6 divided by 3500. = 583.33 12 divided by 583.33 = 48.61

Chase…77 - 6 divided by 10,000 = 1666.67
12 divided by 1666.67 = 138.89
Plan to send 140.00 each month and watch for BT also before 4/14

Discover 627.28 I suggest just sending them $60 a month and planning to pay them off with in 1 year.

So this one possible option for pay off in 6 years is

120 + 140 + 50 + 140 + 60 = 510 A MONTH to credit cards either for a year then switch to 450 (or see below).

Also take half of any tax return amount and put to credit card debt. Paying off highest interest ones first (the other half goes to saving for emergencies). So say possibly at least 1k to it each year also. So 1k x 6 is 6000 so really 32k becomes 26k divided by 6 which makes it more like 364 in payments a month but plan high and adjust to lower if want later. Like the 60 that went to Discover for one year then possibly goes to another or to savings.

So new budget would look something similar to this.

Debt 510
Netflix 8
Mort 938
Hel 246
Utility 93
gas 53
elect 276
windows 120
life ins 22
cox 38
ING (savings) 50
= 2,354 - your income 2,482.55 = 128.96


So food, phone, medical bills etc. would come from my $1000 a month.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Dean again, to keep myself encouraged, I'm trying to view it as most of the money was for home improvement (at least 20k of it), therefore it was/is an invest. Then I tell myself we bought a BRAND NEW 2013 Honda Accord and we are just making the 'normal' payment monthly that we would be making had we actually bought the car. In reality, we drive a paid for 1999 van and a 1987 Nissan car. The van has about 120k on it and the Nissan has about 185k on it. I hope they can hang in there and last until the above six year plan is over!

I am eager to hear any one's thoughts on the above plan.

Thank you.

Dean









" Be who you are, and say what you feel, because those who mind don't matter, and those who matter don't mind." ~ Dr. Seuss


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Tue Nov 13, 2012 8:35 am 
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Joined: Wed Sep 23, 2009 9:01 am
Posts: 5205
This is a fantastic start. I hope you will continue to give us updates on your progress. Maybe you should start a journal in the the Fiscal Fitness Journal's board and update it at least monthly. I think you will find that a source of ongoing motivation! You will also find that when the inevitable hiccup happens, and we all have those little setbacks, people will help you figure out how to get past them and back on track, especially if they have been watching you make stead progress.

One of the best things about your latest post is that you both seem to have a much better attitude about the whole thing. Maybe that's because you've seen that by working together and solving this problem you know you can get past it. You both said that the stress of the situation was causing you both a lot of problems beyond the financial ones. There seems to be a lot less stress coming out in what you posted now.

Good luck and please stick with your plan and let us know how it is going.


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Wed Nov 14, 2012 6:25 pm 

Joined: Mon Oct 29, 2012 3:11 pm
Posts: 49
DoingHomework wrote:
This is a fantastic start. I hope you will continue to give us updates on your progress. Maybe you should start a journal in the the Fiscal Fitness Journal's board and update it at least monthly. I think you will find that a source of ongoing motivation! You will also find that when the inevitable hiccup happens, and we all have those little setbacks, people will help you figure out how to get past them and back on track, especially if they have been watching you make stead progress.

One of the best things about your latest post is that you both seem to have a much better attitude about the whole thing. Maybe that's because you've seen that by working together and solving this problem you know you can get past it. You both said that the stress of the situation was causing you both a lot of problems beyond the financial ones. There seems to be a lot less stress coming out in what you posted now.

Good luck and please stick with your plan and let us know how it is going.


I shared it (our plan/budget) - on one of the fool.com boards. One dude said this (plus my replies are included) about it - my reply to his are in blue:

AJ wrote about our budget:

I think you are being overoptimistic on several counts:

***Yeah, I thought it seemed a bit 'too good' to be true. But the mountain cannot see the mountain. So, thank you for sharing your thoughts below.

- you haven't said that you have stopped using the cards - if you haven't already stopped using cards, stopping their use is critical to the implementation of this plan, and may not be that easy to do

****We haven't used them in over two months now. But, I do see your point and thank you for the reminder.


- you are not adding BT fees to your debt balances or else assuming that the interest rate (and along with that, the required minimum payment) will go up if you don't find another BT opportunity - this alone will probably add 6 months - 1 year to your plan

****OK. Good point. I can live with that. However, thank you for making us aware of that area.

- since you haven't been tracking your spending, I suspect that the other expenses are probably in excess of $1000

****You could be right. I think the wife has been tracking some lately. But we have not been disciplined in that area. I know. We need to be. Thank you for the reminder.

- you never said if the $1000 was net of estimated tax payments - if it's not, then you won't actually have $1000 or your tax refund may not be as large as you plan, if you get a refund at all

****Hmmm. . . . Interesting. Taxes have always been that 'mystery item/area' to me. So much easier when I was single and did the 10W EZ form. I was just hoping that sense we are poor (Lets says we claim 55,000K gross) and have three kids under the age of nine, we'd be getting some money back. How much? That is that mystery place to me...

- do you really think that 14 and 26 year old vehicles will last another 6 - 7 years? And is your plan to go back into debt to replace them when you pay off the non-mortgage debt?

*****Excellent point. No, I doubt they will 'live' another 6-7 years. It is is the realm of possibilities . . . but doubtful. We are good on routine maintenance and have a friend that owns a repair shop. He keeps us going at a cheap price when we break down. But lets say we need $1,500 for a new tranny . . . Hopefully we will have enough cash in our emergency fund to take care of that. Also, I'm not too proud. I have bought and own many cars that I paid in full, with cash, for 500 bucks. They exist. For three years before going to college, I was an autobody repair man. I have a good idea what to look for when I buy used cars. I have probably bought about 20 of them over the last 35 years . . . and they all served me well.

****One more point, she did not factor end that I am willing to work this summer. I don't know what my odds of finding a job are if I tell them that I am a teacher and will have to stop working for them around mid August. Anybody got any ideas? I thought of putting an aid in the paper as a "personal trainer for overweight kids". Maybe that would take off. I'm lean and that is the subject area I teach. Physical education.


****So AJ, do you think 8-10 years would be a more realistic time frame? Man o man . . . that is a long time to be a slave . . . But I keep telling myself, "I got too much junk as it is any way..." When our three daughter are all in their teens during that 8-10 year period, that could get expensive.

****Is the 'best' plan to try to get out of this ourselves over the 8-10 year period, rather than to throw in the towel now (or, in a year) and declare bankruptcy? A judge would probably kicks us out of his court in a hurry saying something like, "three pets, dance and gymnastics for three girls, a Wii, Netflix, $50 bucks a month for mental health therapy and you can't pay your creditors what you owe them? Drop all the things that I mentioned and you can have them paid in 6 years. You are not trying hard enough. Get out of my court-room!"


****I just think bankruptcy at times to protect our few assets, our home and my 401k that has 20k in it, and my teacher's pension. We have still yet to miss a payment on anything . . . but it seems like we are just one emergency from being in hot water. While we send all this money to unsecured debt, we could have been building up our cash reserves to higher levels, to insure protection of the above mentioned assets.

****Thanks again for your time and input AJ. I really appreciate it.

Dean


Thoughts anyone? Thank you.


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Wed Nov 14, 2012 7:10 pm 

Joined: Sat Feb 12, 2011 5:47 pm
Posts: 87
Location: Ontario, Canada
You've decided that you can put $510 per month to debt. Another option is to do a debt snowball where you pay the minimum on all but one card, and put the rest of the $510 to the remaining one. That way you get rid of some balances sooner, rather than having them all done at the 6 year point.

I didn't see an interest rate on the Discover card, but you could have that one paid off in two months which might be a good motivational boost.

_________________
Kate


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Wed Nov 14, 2012 7:56 pm 

Joined: Mon Oct 29, 2012 3:11 pm
Posts: 49
Kate1 wrote:
You've decided that you can put $510 per month to debt. Another option is to do a debt snowball where you pay the minimum on all but one card, and put the rest of the $510 to the remaining one. That way you get rid of some balances sooner, rather than having them all done at the 6 year point.

I didn't see an interest rate on the Discover card, but you could have that one paid off in two months which might be a good motivational boost.



I agree with you Kate about the motivational boost. I tried explaining that concept to my wife, but she has some other
plans . . . and once she makes them, nothing can change her
mind. . . . The interest on the Discover card is 10%.

Thanks for sharing your thoughts, I appreciate it!

Dean


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 Post subject: Re: Bankrupt or try to 'gut' it out?
PostPosted: Thu Nov 15, 2012 12:15 am 

Joined: Wed May 30, 2012 11:56 am
Posts: 124
Different people are motivated by different things. I track my total debt so paying off an individual account isn't as much as a boost as seeing that I've paid off another $1000 in principle, therefore paying off my higher interest debt is of much more interest to me. If you have a debt that's weighing on you or your wife because you regret getting it, or if they're a pain to deal with, getting rid of that can be a bigger relief as well. You and your wife need to figure out what works best for the two of you, then do it, as long as you're still on the path to financial recovery. 'Cause that's really what this journey is about, it isn't just about paying debt off but also learning to live on what you make, making a financial plan and following through (paying off debt, saving for big purchases, living on a budget), etc.


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