Who has experience filing bankruptcy?

Friends of mine are in serious financial trouble. The husband had cancer two years ago and he is self employeed, their insurance was awful and now they are tens of thousands of dollars in debt and are at risk of losing their home. They own a home (still have a mortage on it) and two vehicles. When you file BK, does the bank take everythign you own? What is the best to file? Ch 10? Ch 13? What is the difference? Experiences please?

Hey, my husband and I filed a chapter 13 years ago. When we had just had our 3rd child my husband got reall sick and he was out of work and because of a mix up at his job (the correct papers not filed when a change was made for workmans comp) we could not pay any of our bills.

We had several credit cards to the max. It was really bad. We had credit people calling nonstop and some of them were very ugly. (one lady told me to get off my #@#@# and get a job so I could make the payments!) Even after he was ablew to go back to work they wanted all there back payment right THEN. It was not possible for us to ever catch up.

Watch this video with good tutorial:

Anyway, we found out about the chapter 13 and I will say that it was a godsend for us!!!! We went in that day, sat down with a lawyer, told him our situation, gave him our credit bills and by the time we left that place he was taking care of everything!

He called all of our creditors and sent a letter of cease and desist and we never got another call. We went to court and it was in and out..noine of the creditors showed up and fought it. We were given a payment plan that we could afford and sent it to the chapter thirteen office every month and they paid a portion to each creditor.

We stayed on it for 3 years, I think it was and that was it. It stayed on our credit for 7 years but we were able to bring our credit back up. As a matter of fact we ended up getting 3 credit cards over the last 3 years.

Then my husband lost his job and he was out of work for over 6 months and we ended up charging to much on those 3 cards and when he went back to work he just wasn’t making what he was before so just recently we got behind in our payments cause we ciuldn’t make the minium payments anymore, so late fees and over the limit fees got us behind AGAIN.

This time we refinanced our house and used the equity to pay off a loan and 1 of the bigger of the credit cards leaving us with two cards left that are behind. My husband is working with them and so far it is looking good. They are really working with us so far.

We actually was working with CCCS but it’s been really slow and while waiting on that we were getting further behind and getting 20 calls a day from 8 am till 9 pm from creditors. So my husband called the last two creditors and talked to them and if they do what they say, they will waive the late fees and over the credit fees and make our monthly payments more where we can afford them.

With lower finance charges we should be paid them off in less than 4 years. Which it would take 20 years to do with the finance charges the way it is now. Of course the cards will have to go but we have desided that if we can not pay cash then we won’t get stuff. We NEVER want to get be in this place ever again. That’s my story. Sorry it was so long. Hope it helps.

P.S. We did not own a home at the time of our chapter 13 but unless things have changed and I remember correctly the lawyer said that we would not have lost our home or car if we had owed owed on them. But check it out for sure first cause this was years ago and I don’t know for sure.

Update on my progress – good news!

house mortgageHi everyone, I have received a lot of great advice and reference information from this forum since having joined some months ago. I have also found Dave Ramsey’s resources to be very helpful.

I had really dug myself into a hole simply by taking on too much debt. There are so many times when things seemed hopeless, and I didn’t even know if I could get current because of all the fees and stuff I was paying – I’d catch up one place and fall behind in another.

I was also one of those caught up in the subprime mortgage situation (payed 11.75% initially which adjusted upward to 12.50% this Feb.). When I got behind in my mortgage payments, I was able to set up a 12- month forbearance plan with my mortgage company starting one year ago April, and completed it this April – one victory!

I then found out I had an extra monthly payment due that same month of my last forbearance payment(long story short), plus the extra amount due since my ARM adjusted up in February. I told them I couldn’t cover that right away and asked for alternatives. While I explored possibilities my mortgage company was taken over by another company and I received a notice of default. Things seemed to be going backwards again.

I called the mortgage company several times, explaining I could not make a double payment in one month … we talked about a loan modification.

Fast forward to today (certainly didn’t feel fast – it felt like a decade!) … my negotiator at the mortgage company called today … my modification has been approved AND they are giving me a new mortgage rate of 6% !! (Amazing since my FICO is still around 500.)

My next payment isn’t due till Oct. 1. It’s still an ARM, but I am going to jump on the opportunity to work hard on my FICO and refinance to a fixed as soon as I can.

Can’t believe this has happened. This year has been grueling – I have been working out repayment plans with all my creditors myself. Sometimes I had to request new arrangements. But I kept paying and paying, and I seem to be creeping ahead. I still have a ways to go, but in October I’ll get a bonus which will go towards debts, and my spreadsheet is increasingly in the black, and balances are going down. I keep a list of everything I paid off just to give me a boost if I get discouraged.

My thanks again to this group. I couldn’t have found my way without it. I just had to share the good news because I am feeling hopeful for the first time in a long time.

Re: New to forum and need some help

Hi, it’s been almost a year since you asked your question, anyway, here’s my input:

Thats a lot to take in….but let me offer a few suggestions.

We are in a similar situation…not that large of a scale as we only have 2 children, I stay home with them and work from home (work for myself- which is NOT a stable income), my husband works fulltime and just started working parttime on top of that to help us make ends meet…unfortunately. He will now be working every day of the week. We have been living off of credit cards a bit too much also….groceries, gas.

First, do a little homework and see, but I think with bankruptcy now you still have to pay off your debtors, you just get some leniency (and bad credit maybe?)…but I’d check on that. Look for a FREE LEGAL AID office in your community. Go online or check the phone book.

Second, for childcare while you work… check your local Health Department or Department of Human Services or whatever they call it where you live and ask about childcare assistance that you may qualify for. WE make a little too much for HEAD START but we qualified for the E.L.I program and my 4 yr. old will be starting preschool this month with NO cost for us….and I believe we can keep in full days if we need to….in fact there is a minimum of hours he needs to be there to qualify for the free aid but I think we can use the maximun hours they are open which is about 11 hrs a day. NOW- I am not leaving him there all day…just so you know. But 5 hrs or so a day gives me time to work on my home business and keep my 2yr old with me…etc.

Third, I saw an Oprah series awhile back where a few families were given help through financial coaches(?)….and they proved that sometimes you can get the credit card companies to lower your interest rates I think? You have to threaten the card company sometimes with the “if you don’t give me a better rate, I will stop using you and go to another card company”…..but say it nice and be sure you mean it. They are making money off you!

To help make money at home I sell on ebay…you can see my link below…, I also do childcare for people, but usually I only watch one child parttime because its a hard thing to do and I have the ebay biz also. I also buy and sell gently used clothing and resell it at a local church sale making maybe $200-300 a year….I take my things to a consignment store and as my items sell there I opt to not take the check…I keep the money on account and when she has her end of season “bag” sale…I shop big! I can use the money on my account and I’ve gotten around 200 or more items for almost nothing before. Be creative, look for ways you can make that extra money and save those extra bucks. Check out some of my other article I’ve written at this other link also.

Best Wishes! Hope these helped. All in all…I give credit to the Lord really for keeping us afloat…we have used credit and tried to cut back, etc…but its almost a miracle I’ve been able to stay home with my kids at all these 4 yrs.. He takes care of us and he’ll do the same for you if you allow him! We don’t want to carry a balance from month to month and we haven’t had much interest at all to pay ….we are trying to change our lifestyle where we need to (I don’t know that theres much room to change though:) ) so we don’t have to rely on credit for necessities and not be able to pay them off monthly. We’re muddling our way through as well! You’re not alone! Check out these links and see if any of the info gets you thinking about creative ways you can get ahead at home.

Also, Have you read Total Money Makeover by DaveRamsey.com?

Staying current on your bills but not having money to eat and live doesn’t work. You are not your credit score and I know the feeling that “My name is on it, I need to pay it.” Totally agreed. But right now, you are in a tough spot. Drop the CC payments and focus on making a budget that will allow you to eat and live. Once that is under control, then you can grow to the point where you can start paying again.

New to forum and need some help

Hi all,

I am new to the group and we are looking for some advice/ help. First let me introduce us. I am Kitty and my husband is Matt. We have 5 kids ages 1, 3, 4, 6, 12. I would tell you the whole story of how we ended up where we are now, but I will sum it up quickly since I figure it really doesn’t matter with regard to how to get out if it! We moved to the US (Matt is from England, I am American) in 2004 and replaced everything we owned since it was too expensive to ship our stuff here. About 8 wks later we lost everything in hurricane Ivan. We live in NW Fl. We moved to GA to get back on our feet and then about 2 yrs after that we came back to FL. In hind sight, we should have stayed in GA, our GREAT opportunity wo come home turned out not to be so great. Anyway, we now find ourselves with more bills than we can pay. None if it is from big TV’s and new cars, etc. It is all from needing to pay for food, gas, and normal bills.

I went back to work after Ivan as we couldn’t afford for me to stay home any longer. But, with the kids and the cost of daycare, we work opposite shifts as much as we can. I can’t afford daycare. In order to do that, I have to work part time. Matt picks up side jobs very often to make up some extra cash, but it is not enough. We have people that owe us over 5000, but I can’t make them pay. If they would, it would help so much! And it is for work we completed already- months ago. If they had paid us, it would be saving me well over 100 a month just in interest, never mind the normal payments on things! I am so angry about this….

With the economy now, our employer, Home Depot for both of us, is cutting hours. I get about 4 a week and a couple of time I have not gotten any hours at all. Plus, my oldest who is from a previous relationship has decided to live with his biological father. We all get along and so for the first year of this he let me keep the child support and not pay him anything. But now, they need it back. I am not paying him, but sending him back the 300 a month he sends me. We have cut out everything we can. We don’t have cable or a home phone, etc.

We are trying to sell our house since we now can have one less bdr with my oldest not living with us. It would save us a lot of money. But, we have an equity loan and if we factor that into the price of the house, we just can’t sell it. I am sure I could sell it for what we owe if we could pay that off and do it FSBO. We also have a vehicle we have been trying to sell for 9 months. We don’t need it anymore, but it is an Explorer Sport and no has even called. Again, I would have to drop the price more that I am able. I don’t know how else to come up with the money to pay the difference. We have tried trading both of our vehicles for another single used one. We can’t get anything that we can afford even by doing that.

I have jobs apps out so that maybe I can find a second job to make up some hours, but it is hard when my available hours would be different every week. See, Matt can’t have a set schedule at Home Depot. We have asked the company to give me a position that works 4 am to 1 pm and then he would step down from Dept manager to do freight at night. Then we could both work full time again. They won’t do it because it is ‘showing favoritism.’ We are trying to get a countertop/ flooring business off the ground, but again, we can’t get jobs because of the economy and because we can’t go ‘put the out’ as we are working so many ours other places to try to keep up.

I have called our creditors. Basically the response I get is that they won’t help because our accounts are current. They are current because we pay our bills, then have to charge food and gas. But now, the cards are about maxed, and we never wanted them to live off of anyway. Plus, my hours have gone down so much that even though it has always been tight for us, now we simply can’t pay even the bills. I have 1600 of bills left to pay this month and we will only get about 1100 or 1200 on payday. It doesn’t take a rocket scientist to figure out that does not work. The bank did defer our car payment for 2 months last year, but they can’t do it again for 2 years. I have talked with debt consolidation co’s and it doesn’t seem like it would make a big enough difference in our monthly payments to be worth it. I have advertised for a roommate for 400 a month and we will see what comes of that.

I just feel like we have exhausted everything I can think of, but I am sure there still has to be a way! Though we have managed to stay current, that will no longer be possible starting the end of this month. I tried doing the right thing and talking to everyone in advance. I told them the situation and that I want to remain in good standing with them and not have to file bankruptcy, etc. I asked them to work with us for a couple of months, so that it would ‘buy me time’ to get another job to make up the lost hours, etc. No one seems to care. What am I missing? They will help people that are already behind, etc, but they won’t help me not end up in that position?!?

We want our quality of life back. We want to actually see each other again and be able to let my daughter do gymnastics for 75 for 12 weeks. I can’t. I have tried and feel I am missing something. I don’t want to file Ch7; I loose the many benefits of USAA membership and then there is all the regular stuff that goes with it. Plus, I very strongly feel that no matter why or how we ended up in debt, it is our responsibility to pay those debts. That is what I am trying to do…. But, then my husband says, and I see his point, we can rebuild a credit score, save and pay cash, etc. We can never make up this time with our kids as they grow. On that note, anyone else have any ideas? I mean, if we are going to have to file, I might as well do it now and start putting the difference in savings and getting us back on track and not put it off. But if there is a way out, then I want to do that. I want to know that I have done everything in my power before I file anything! I know so many people that have done it and they say that they are fine and are glad they did. But, in the end I am paying off their debt with higher prices, etc. I don’t want to contribute to that. maybe I just have too great a sense of personal responsibility, lol! Ok, now I am rambling. Please, please, tell me I am missing something and that there is a better way out!

Thanks in advance and thanks for taking the time to read and reply to the long msg.

Question about debt mediation


I’ve been reading through messages and am encouraged by all the information here. I’m a new member on eccabana.com. We are facing some real problems currently. Our home’s value has fallen by more than $25,000 in the last six months. We aren’t behind on it and are working hard to pay our mortgage down.

We are, however, facing serious credit card problems. With a loss of employment and large medical bills, we’ve made some poor choices. All of our debt is from those factors now.

My question is, is debt mediation a good option? I received an offer from one company where they will collect a monthly payment from us and pay our lenders to settle the debt. But, in a phone call to them, we learned they want you to hold off on all payments to lenders and let the credit go bad. Then, as they accumulate enough money to work with one of the lenders, they negotiate a settlement. We could be paid off in 2 years.

We filed bankruptcy about four years ago, do to massive doctors bills from a heart condition. I’m worried about paying a company and not getting results. Any advice or perhaps suggestions? We appreciate your advice as we learn how to fix this problem.

Try to work with the CC companies yourself. You’ll have more control on who you pay what. If you get saddled into a large monthly payment to a place like this you might find yourself worse off. Unfortunately, since you’ve filed BK previously I would think you might know this but dont know what you filed, you have to become delinquent on your cards before the companies will work with you. They are determined to give you a neg. mark on your credit report. Basically no one will work with you until you default. I know, sounds stupid and it is. Makes no sense to me but that is the way it is. Also even tho you filed BK there are time limits but depending on which you filed you can file the other- meaning if you filed chapter 7 at some point you can file chapter 13 if needed

I’ve heard of that kind of debt mediation before, but something about it sounds fishy to me. There’s probably some legal stuff I just don’t know about, but letting everything get worse before starting a plan…it just doesn’t seem logical. To me. Maybe there’s some others on here that have gone that route successfully and can tell you more about it. There’s some non-profit credit counseling agencies out there that can give you some other options to consider. Good luck!

Stay far, far, far away from those companies. Very little of your money actually goes to the debt and a nice “contribution” goes into their pockets….