Life after bankruptcy

[nomoneynomore]

[rck3]

Thanks, We are on the other end trying to make the jump into BK. We know it's our only option but still hard to commit. My biggest fear isn't our scores or loans but more just the lack of having credit available. If something comes up until we have some savings it can be hard.

[nomoneynomore]

I agree, it can be VERY hard. We had some very stressful & trying times during the first year. We were blessed to have had some great luck also which helped things go more smoothly.

There is no way to be certain all will go smoothly, but w/ dedication & hard work, there is a much better chance of it. We had alot of medical bills come up that about killed us, but luckily we were able to juggle our budget more tightly and pull through.

[rck3]

Yeah, we hope to keep it quiet as people assume bk is a lack of financial control and overspending. Far from the truth for us, just a hard life. We were married at 20 and hard our 1st child then 4 years later our second. No family help and 16 years later we have slowly built up debt to a level we can't deal with and can no longer just keep moving around. I laugh we I hear poor finances, I dare anyone to live my life and go 16years before ending up in BK. I promose most would have given up in 5.

[Amy26]

Yea, life after bankruptcy isn't as bad as it used to be. 10-15 years ago, filing for BK was like a social death sentence. And nobody ever spoke of such things... today, at least in my neck of the woods, its like oh you're thinking about BK? Me too! And creditors and employers are slowly seeing that what was once a taboo is now becoming more a necessity for some folks.

Rck3, it is tough and a hard thing to get over the hump with but its not the end of the world. I'm less than a year post BK and have little but adequat credit. I went from having credit cards with 20k limits to 500 and 1,100. But, for me... I'd rather have lower limits. Even though I've learned my lessons, it is nice that I just CANNOT wrack up something I can't pay off. I was able to get credit with Capital One (1,000), Hooters (1,100) and HSBC (500). Three is perfect for me and just enough limit to be able to have something to play with and still be able to pay it off.

I'm not ashamed of having to file, in fact I wear it proudly because I had enough forsight to do what I had to do to make things right and start fresh. In my case, it was not a result of frivolous spending either... it was a real estate market gone bad and a nasty move overseas that bit me in the ass!

[rck3]

Yeah, I would just love that have 1 card with a 1k limit, for work purposes. I have to pay my expenses and then get reimbured a week or two after. being out of town for weeks can get expense to pay everything out of cash.

[ladyjenn]

Yeah, we hope to keep it quiet as people assume bk is a lack of financial control and overspending. Far from the truth for us, just a hard life. We were married at 20 and hard our 1st child then 4 years later our second. No family help and 16 years later we have slowly built up debt to a level we can't deal with and can no longer just keep moving around. I laugh we I hear poor finances, I dare anyone to live my life and go 16years before ending up in BK. I promose most would have given up in 5.

AMEN!!!! Ditto here!!!

[nomoneynomore]

Yea, life after bankruptcy isn't as bad as it used to be. 10-15 years ago, filing for BK was like a social death sentence. And nobody ever spoke of such things... today, at least in my neck of the woods, its like oh you're thinking about BK? Me too! And creditors and employers are slowly seeing that what was once a taboo is now becoming more a necessity for some folks.

I'm not ashamed of having to file, in fact I wear it proudly because I had enough forsight to do what I had to do to make things right and start fresh. In my case, it was not a result of frivolous spending either... it was a real estate market gone bad and a nasty move overseas that bit me in the ass!

Same here! During and right after we filed, we were so ashamed, but now almost everyone knows we did. It has been liberating to tell people and we have been able to help a few of our friends who are going through financial storms. We are so much better off than we were before, and I can honestly say it has been well worth the embarrassment.

Ours wasn't spending out of control either. We were involved in a family farming operation. All of the farm loans etc were in our names. When hubby's grandparents passed, their farm was sold. With no farm income, there was no way to afford the $100k farm debt that had $10k yearly payments payments.

We have a letter written up that explains our situation prior to and after our bankruptcy and spells out how we are controlling our finances now etc. that we have submitted with our loan applications. In both cases, the lenders did take the reasoning into consideration and really appreciated knowing the history. They also stated the letter did help sway their decision to approve our loans.

[rck3]

Thats a great point. I know if I told someone I went BK vs I told someone that I got married and had my son at 20 then tried to support my family and goto school for 10 years only to then be laid off during the tech drop and then take 1 full year to find a new one which then dried up and throw in about 10k in dental bills sounds very understandable

[Flamingo]

All good points here but everyone needs to realize something...debt causes bankruptcy; not getting married at 20, having children, not the job loss, not the divorce, etc. If the event occurs and there is no debt in place and finances planned/saved, bankruptcy would not have to be filed. Foreclosures taking place over the past several years are the result of greed and spending beyond one's means to get a house and when the values dropped and everyone took out huge second mortgages to fill those houses with goodies or get the new car and then the job loss hit, no savings or plan was in place.

We blamed our BK on my husband's job loss and a 70% drop in our income. When that occurred we were heavily in debt, enjoying a life with a big six figure income. For years I blamed everybody else and everything else for having to file yet if we did not go crazy at the time and had savings/a plan in place in case something happened, we would have been fine. Reality hits hard after a while and you learn that credit is what one makes it in their life and that material items don't mean that much and to be happy doesn't mean you have to have every gizmo the Jones' have down the street.

Learn from this experience and realize that if you do not learn to control credit in your life, it can very much occur again.

[nomoneynomore]

"If the event occurs and there is no debt in place and finances planned/saved, bankruptcy would not have to be filed."

This is true, but it is not always possible. In our case, we had no "personal" debt. All of our "personal" bills were paid and on time. There are some businesses etc that it is not possible to start out debt free. Just because you borrow money to start up and/or run a business does not mean you are running wild or spending out of control.

"Foreclosures taking place over the past several years are the result of greed and spending beyond one's means to get a house and when the values dropped and everyone took out huge second mortgages to fill those houses with goodies or get the new car and then the job loss hit, no savings or plan was in place."

I couldn't agree more with this statement. But, at times, even the best laid plans fall to pieces. Savings accounts can be drained if things come up, no matter how diligent one saves or plans.

Reality hits hard after a while and you learn that credit is what one makes it in their life and that material items don't mean that much and to be happy doesn't mean you have to have every gizmo the Jones' have down the street.

AMEN! We haven't ever had this problem. If we have a want and don't have the money to pay cash, we don't buy it. If we save and still want it, then we might splurge. We spent many years living without things our friends considered necessary. We didn't have TV, cell phones, AC, nice cars etc. We lived within our means and are much better off for it. Not having all the "things" have really enriched our lives. We spent more time as a family and didn't have the worries many of our friends faced.

Learn from this experience and realize that if you do not learn to control credit in your life, it can very much occur again.

Since our bankruptcy, we have done very well keeping things together. We have a family of 5, and live very well on an income of aorund $33,000 a year. We are proof that you can live a good life and not be buried in debt.

[rck3]

Agreed, but it's rarely a single event. At 20 with no family help it is hard to support a family with a home, food, medical and normal life. We hand little choice on using up credit but no that was not the main cause but it was the start throw on some hard choices and some bad ones and over the course of 15 years it is easy to build it up. Much of our debt we could have avoided but also more we could not. Thrown in loosing work and doubling the min payments on all cards killed us. I had a plan and was paying min on all cards but 1 which we wanted to pay off and then switch to another. doubling all my min payments killed that plan.

[Amy26]

Flamingo, while I realize you're not attacking anyone and your points are valid as well, some people did not have to foreclose because they were "greedy" and "had to take out second mortgages to fill their homes with stuff".

My home was purchased for a reasonable (comparable) price and it was a 900 sq. ft. condo. I did not buy some outrageous big house with a crazy mortgage that I couldn't really afford. I afforded it just fine but guess what? My home's value dropped over 150k in value in 2 years. I had 60k in equity in it when I bought it.

Why did I have to file? 1. to get rid of that home that I couldn't even rent out for anything close to what the mortgage was and 2. I moved overseas and ended up getting laid off from my job and had to move back to the US. And I never thought about this but I was refused unemployment because I was laid off from a foreign company.

My fault for making a risky move to Europe? Sure... my fault I got laid off and the housing market tanked? No. If I had been able to get unemployment benefits after that I wouldn't have had to file. I would have been fine on my savings and unemployment. But going over six months with zero income and a mortgage and student loans and some credit cards was just impossible.

Sure, I could have lived differently by never owning a credit card, renting someone's basement, and driving a beater but to me that is not living. I also was living within my means ... I just had a series of unfortunate events take place to make paying those obligations not possible.

If someone looses their job there is always going some financial reprocussion. You will always have something you need to pay... whether its rent, mortgage, student loans, car, or whatever... now, with careful budgeting you should be able to pay those obligations in the event of something bad happening right? Sure... but for how long do you plan for? Personally, I had savings enough for 3 months... but there are so many people right now who are going on 9 months without jobs. So, do you save up all your money into your catastrophe loss fund to live 12 months without income? 24 months? People should always have savings of course but where does it end?

Life happens... and I'd rather spend my life enjoying it rather than planning for catastrophe constantly and I will live comfortably and make smart purchases. Will I go into debt for some things? Sure... will I go crazy? No.

Everyone's situation is different and everyone needs to put certain limitations on themselves to feel sound or make them feel like they are doing the right thing... its all relative. Nobody is perfect and nobody can see into the future.

I totally agree and respect people's opinions about the importance of making smart decisions post bankruptcy or even pre bankruptcy... but I don't agree with lumping everyone into buckets. I don't like stereotyping and I don't like the psychology of putting people into categories. Everyone is different. I'm sure there are lots of people filing for bankruptcy that just were plain dumb and didn't care about their finances but then there are others that do it to make a smart decision or for reasons that they couldn't quite control.

And yes people can debate all those reasons till the cows come home but its best to present people with information and let them form their own judgements and actions rather than pointing fingers.

[rck3]

Yeah, everyone is different. We also purchased a business to help get ourselves out of debt (sounds funny I know). It might have worked and will hopefully provide for us going forward but you can't plan for a 10% increase in your GROSS sales which equals a 20% decrease in the net profit starting this year. We figured the debt would be outweighed by the income and we have made more than we are paying on the debt so it did help our overall situation just not enough. It simply delayed the final outcome.

[BobMango]

I agree with Flamingo's point, which I understood to be that without debt, bankruptcy is not a consideration. But just because you had to file does not mean that you went out and borrowed in bad faith or were foolish in your financial life.

The fact of the matter is that we all could have lived our lives without debt. It's really only in the last 75 years that you could get a mortgage or finance a car. Many things that we consider necessities are really luxuries that we see others have and think we need as well. Not being judgmental, but this is reality. Some folks will disagree and say "that wouldn't work for me". And the answer is, "it would if you made different choices." But life in America is all about making your own choices. Because of my choice to take on debt I was in a vulnerable position when others made choices that impacted me. Sure I blame them for their actions, but I could have lived in such a way that their actions would have little or no financial impact on me.

For me, debt seems like that first hit of crack for an addict. Seems good and nothing bad happened. I can handle it. Then since that was so easy, more can't be any worse... well you get the idea.