Craving a *really* fresh start

[zenbit]

I was close to 80K in unsecured debt when I stopped making payments a few months ago. Not sure what it is now with fees and such.

Upside down in my home to the tune of maybe 50k.

I am divorced, trying to raise my two kids on my own - in my early 40s, with very little in my 401k.

Still trying to maintain too much of the old lifestyle - the big house, the stressful job, etc...

I am heading for a Chapter 13 due to a high income. Never dreamed I would see the day when a high income would feel constraining and heavy.

But to be honest, there are days when I am not sure how much longer I can carry on like this.

Does anyone else ever really just crave a fresh start? I am guessing I cannot be the only one. There are days that I really want to hand it all over, go rent a small place with my kids, buy an old beater car, and get a less stressful job.

Of course, the whole Chapter 13 process is anything BUT this. It means at least five years of trying to carry on with this mess to keep enough income coming in to make the trustee payments. And even then, I have this house I am upside down in with not much of a light at the end of the tunnel on this at all.

I get that I screwed up. Not blaming anyone. But how does one ever really get out from under?

Part of me wants to "man it up" here, and eek out the next five years, and hope I am in good shape by then. Another part of me just doesn't see how it can really work.

Setting aside all judgment and guilt trips about what I should or shouldn't do... I can't help but to wonder what would happen if I just woke up one day and said "no thanks" to this crazy lifestyle, and opted for something much simpler, honest, and more peaceful. My kids will only be young once, and at times, I just feel like I am running up hill in all directions.

It's not like they could throw me in jail, could they?

I really don't mean to whine or sound all dramatic. There's an honest question here... if anyone can relate or if you have ideas or perspectives to share, I would really appreciate it. Thanks!

[tkharvey]

wow....funny I've thought the same exact thing. There was a time when this big house we're living in was our "dream". However, I can't tell you the last time me or my husband had a decent night sleep with all the worry and stress of trying to rob Peter to pay Paul so to speak. I'm tired of it, too. I want to go back to the "Mayberry" days....seriously.

[treehugger1]

Take a deep breath. The worst that might happen is that you are sued and a judgment comes against you. GO to the US trustees site and see of you can get a feel for what your payments might be in a BK 13. If they exceed 25% of your disposable income (wage garnishment in most states,) then you have lots of time to sort things out. You are a high wage earner with no assets, so it is unlikely a suit will be brought soon,

On the other hand, if you are as distressed as you lead on, you can simply stop paying on all unsecured debt and use the money to eventually file a BK 13, or put the money aside. You are temporarily in control of this situation.

[rrockinggramma]

as a past chapter 13 filer and successful finisher I can say that without question, my life changed completely when I filed my chapter 13. And yes it was stressful at times when things happened and I wondered how it would all work out, but you know what, it all did work out. Solutions would come in the wee hours of the morning and my life went on. The phone calls stopped, the worrying about robbing peter to pay paul stopped. It wasn't euphoria but it wasn't bad either. And yes lifestyle adjustments are a part of it all.

I now have a nice home. (discharged march 3, 2009, applied march 4, 2009, closed USDA home loan on May 8, 2009) Not big but not expensive either (got a great deal on a foreclosure, new home never lived in, builder went bankrupt and got a great interest rate. ) I also got a new used car. (wasnt planned on but had to when my beater car decided to give up the transmission but it made it through for me which is all I ask it to do)


I want some things for my new place but I know that I do not NEED them. I am now content to wait until I have the money saved and my finances under control (with the new payments etc)

It is indeed possible but you have to really want it to make it happen.

[zenbit]

Thank you all for the responses and feedback. It is always helpful to hear from others in the same spot.

One question I have though is really around what happens if I change jobs and have a substantially lower income? Even though I am no longer getting raises or bonuses - I am over paid by current market standards... Not to mention the fact that what is really getting to me is likely just burnout.

I found myself yesterday wondering if I could survive on the pay I would get if I worked in the produce section at the grocery store! And this is coming from a guy in I.T. Management.

I know there may be a bit of "grass is greener" syndrome at work here... But what happens to a Chapter 13 if I change jobs and the trustee doesn't like the reason (ex. Burnout)???

Am I then able to convert to a 7? And if this is where I am headed, should I make the move sooner rather than later?

Just trying to understand the playing field, I guess.

[oldhack]

as a past chapter 13 filer and successful finisher I can say that without question, my life changed completely when I filed my chapter 13. And yes it was stressful at times when things happened and I wondered how it would all work out, but you know what, it all did work out. Solutions would come in the wee hours of the morning and my life went on. The phone calls stopped, the worrying about robbing peter to pay paul stopped. It wasn't euphoria but it wasn't bad either. And yes lifestyle adjustments are a part of it all.

I now have a nice home. (discharged march 3, 2009, applied march 4, 2009, closed USDA home loan on May 8, 2009) Not big but not expensive either (got a great deal on a foreclosure, new home never lived in, builder went bankrupt and got a great interest rate. ) I also got a new used car. (wasnt planned on but had to when my beater car decided to give up the transmission but it made it through for me which is all I ask it to do)


I want some things for my new place but I know that I do not NEED them. I am now content to wait until I have the money saved and my finances under control (with the new payments etc)

It is indeed possible but you have to really want it to make it happen.

I had much the same situation. I was keeping up with my bills in an on-time fashion, but had absolutely no discretionary income or savings. So, filing Chapter 13 actually loosened up my budget! After several years of paying out almost every cent to stay current, I found -- after I got into a routine -- that my BK plan allowed me substantial savings. And I, too, wound up buying a house just 55 days after discharge. The $8,000 first-time buyer's tax credit allowed my to buy a lot of house 'stuff' without debt (besides the mortgage, I mean).
But, the best part is that I've gotten into the habit of putting money aside for the next unexpected expense. My unsecured creditors got 80% of their money back, and I don't have to deal with the worry of paying them.
All in all, worked out for me.

[HBell]

We have a similar situation here. We built a nice "dream" home for ourselves - family of 4, (husband a builder) before everything went so sour. Have our horses on property, I was stay at home mom, etc. Many of our customers defaulted on their contracts in excess of $150,000 also. Husband had to move out of state to find work, but now the work is depleted in that area as well. We have our mortgage ($3200/mo), 2 cars two yrs and newer (approx $900/mo), home equity line ($1800/mo), credit card bills (approx $75,000 total), not to mention electric, phone, water, insurance, etc!
While I am attempting to make some kind of living in my line of work from the home, he is attempting to get any piece work, little jobs he can, and also applying for jobs in his salary requirement range. However, nothing looks promising except for C13. We're trying to restructure our loans, but the credit card debt will not go away I believe.
I've spoken with 2 attorneys. One told me we could keep our house and cars and pay $111/mo for 36 months (very confusing to me) and the other told us the only way we could keep everything in C13 is to continue to pay on everything at a reduced rate and we'd be free of the credit card debt.
So I'm wondering if we should file c13 or if we should let the credit cards go to "charge off". Either way, our credit would be affected for years.
Our house has been on the market for at least 8 months and don't expect it to sell unless we take a loss on it.
The thought of downsizing to a little house without top shelf everything, etc., is so appealing, but not anywhere in sight at the moment.

[DeadManCrawling]

In our area of Florida, there are now completely livable homes for sell from $30,000. No joke. These homes are not in bad neighborhoods, and are in many cases, in great shape, need no repairs and are within 5-10 minutes of where we live now.

These same propertie were 50k 3 months ago. And 70k 3 months before that. The EXACT same properties in many cases, the banks keep dropping price, but no one is buying.

I am going to buy one. With cash. No mortgage will be heaven.

3 bedroom, 2 bath 1-2 car garage. 1100-1400 sq ft. Get to 40k and you can get a pool too, if you want one. Condos that were selling for 150k 3 years ago are on the market for TWENTY THOUSAND! These were owned by the investors and flippers who got caught with the bag at the end of the mess.

My current home is 4000 sq feet, 2500 sq ft of decks and balconies, 4 car garage, a monstrosity. I also owe 400k on what is now worth perhaps 200k.

Seems like a no brainer. We will trade an $800/month electric bill for perhaps 150-200.

We are going to stay here as long as possible, fight the foreclosure, save our money and watch the market fall further.

Simple life indeed, and we can't wait.

After the dust settles from our move, we plan to buy more of these properties, outright with cash, and rent them out.

[HBell]

DeadManCrawling, We are in Florida also.
Your home is going into foreclosure? How long have you not been paying on it?
Are you not going into C13.
Are you going to buy one of those $40,000 homes to live in?
I wish I could find one of those that we could live in.

[DeadManCrawling]

We have not paid since January. No NOD so far, and no move on the bank's part to proceed with the foreclosure. We plan to fight it all the way, or at least until we have our ducks in a row for buying one of the smaller homes.

Yes we plan to live in it.

We will probably be Ch7 when the time comes. Our mortgage had been consuming 80% or more of our income, so we are still settling out what our "real" finances look like.

Not sure what area you are in, we are in the outer Tampa suburbs, and there are so many low-priced houses and condos on the market it is mind-boggling.

We will probably stay away from the condo market. Many condo associations are on the ropes themselves, from the number of foreclosures. Bad news waiting to happen.

It will be a small home in a neighborhood with no HOA for us. Hopefully by this winter.

[HBell]

We're in the Ft Myers/Naples area. There are plenty of foreclosures, but not as low as in your area. Guess I should take a closer look and do more research. Maybe I could come up with something, who knows.

[pcn]

I found myself yesterday wondering if I could survive on the pay I would get if I worked in the produce section at the grocery store!

I know there may be a bit of "grass is greener" syndrome at work here... But what happens to a Chapter 13 if I change jobs and the trustee doesn't like the reason (ex. Burnout)???

I know EXACTLY how you feel. I have thought about moving into teaching at substantial loss from my Eng "career", but am concerned how that would affect a ch13. One more reason I am looking again at a ch7. Once it's over, I can do what ever I want, even go live in a cave and wait for the huge crisis to come, according to Glen Beck...

[zenbit]

So great to get everyone's perspective...

But I guess I am still wondering... what if I just have this gut feeling that my income is really going to be changing - is a Chapter 7 even an option?

For some reason, I figured I would hit some sort of wall if I were to suddenly be making an amount of money that falls below the means test and *then* file Chapter 7. Is there some sort of time frame? 6 months or something?

[Ifonly]

I hear you on the simple life. We surrendered our home in our CH13...no more 1st and 2nd mortgage payments, no more property taxes, no more HOA fees.

We rented a 3 bedroom about 2 miles away - the kids didn't change schools, and we sleep MUCH better.

Same as everyone before me, the house was my dream house. Lots of room as my father lived with us, lots of room to grow, we had so many dreams. But to accomplish those dreams, we both out of the house with our commutes and careers 60-70 hours a week and then bonuses were cut, everything went up and salaries stayed stagnant. We were so overextended and we kept taking on more revolving debt to live and pay the property taxes, etc.

I took the last of our stuff from the old house yesterday. I loaded up the recycling, a bin for the Salvation Army, threw out some trash, flipped the breaker off and closed the door for the last time. It was somewhat bittersweet but we are so, so happy that we walked away.

We're starting to consider NOT buying another home in five as our son will be three years away from college. Not having a home might be a good thing when it comes to his financial aid.

A close friend said the nicest thing to me about the foreclosure/BK, she said that she admired us for having the courage to know to let go and start over. And she's somewhat right. So for all us, deep breath and pat yourselves on the back!

[knotholeone]

God bless you all. We are in the same boat our 13 pmt is 1400 for five yrs. Still cheaper than the cc's late fees, ol fees, etc. We all want to have a life with nice things and yes we do deserve it but sometimes we realize it is not worth it. I have been working for 33 years and hopefully can finally retire in five when this whole thing is done. Wish me luck.