I am posting this to share a little bit here, and offer maybe a glimmer of hope to others in the same boat:
MY BK was not a huge amount (but then again, that depends on what you compare it to). I was working full time for min wage, and living from check to check. By the time I got paid every two weeks, I had already been broke for 3 days, hoping I had enough gas to get me through.
I worked full time as a temp, and my employer kept promising me a "career" with a huge promotion. I really felt he was sincere so I toughed it out. Then one day, my car died. Engine repair would cost about $1,200. Without a car, I don't work. But how can I fix my car with no money?
I did the only thing I could think of. I used my rent money to fix my car . . rent went late. Credit cards went late or underpaid, hoping to catch up later. BUT . . one late $40 credit card payment resulted in huge fees, and a new minimum payment that was triple what it had been previously. If I can't pay $40/month, how could I now pay $120 a month? Soon late fees became late AND over the limit fees. I began an ugly spiral downwards. Can't come out of it. Interest rates on Credit cards rose to 24%. Creditors called every day. Some were decent and worked with me. Other creditors were bull dogs.
In about 8 months time, my old CC bills of $3,000 were now a whopping $8,000 due to late fees, over limit fees, and ridiculous APR. My car finally DIED, and I tried my best to get a loan for a cheap car . . but guess what? No bank wants to give me a loan for a cheap car with low payments, because of my bad credit. The banks would only give me a loan for a brand new car, so there would be equity. GREAT . . so here we go.
Finally, it happened. I DID get my big promotion at work and went from making min wage, to 42K year. My first check, I immediately called all of my creditors to try to work out a deal. Most were very happy and willing to work with me. With one exception: Chase Bank.
I owed Chase Bank about $4,000 (mostly fees). I offered them $700 from my first check, with $200/month until it was paid off. That was all I can afford, and still make payments to everyone else. They said NO! They wanted all $4,000 now . . or nothing. If I can't give $4,000.00 immediately, they will garnish my wages.
I knew if they garnish my wages, it would be a 20 year tornado coming. If they garnished my wages, I can't afford to pay my other creditors, which means all of my creditors will simply get in a long line and garnish my wages one after another.
I made the decision to file chapter 13, so that I could put an end to the insane fees, and interest charges. For me, it would mean that I would be able to put closure to this mess in 5 years, rather than 25 years.
My plan was set so that I would pay the full amount of my car, and then 10% to all other creditors . . . totaling about $28,000 over 5 years. I would be paying $480 a month directly out of my check before I ever saw it.
For me, it was the best thing . . Because I just got my big raise, and therefore never really knowing what it was like to see a full check, I never missed the money that was taken out lol.
My credit tanked to the low 500's. Cash was a way of life.
Then, about 2 years into my BK, I suddenly got a pre approved credit card from WAMU (God bless WAMU). My CS was around 630 at that time. To my SHOCK, they approved me for $4,500 CL.
I was careful with my card. Charged dinner and paid it off next month. Sometimes I let it role for 3 months . . carrying a balance, but always paid on time.
Soon after, I got pre approved for another WAMU card, also at $4,500 CL. I used this card in the same way as the first . . VERY carefully and strategically.
Soon, 4 more cards followed. . . . Credit One ($1,000) JCP ($1,000), Orchard ($300), Discover ($300).
I stuck to my plan. Used these cards carefully. Only when I knew I had the cash to pay them off would I use them.
In the middle of a bk13, my credit score rose .. . 640, 650, 680, 710.
My chapter 13 is in its final stages. I have paid the base plan, and am awaiting to fall into "closing" status. I have a decent credit score for someone just walking out of BK 13.
Over the last few years, I saw some raises at work . . I am now in the 60k range. My life is much more stable. No more living check to check . . and hoping the gas fumes in my car last until payday.
My car, which was brand new at time of bk filing, is now all paid off. I paid it in full, plus 9% interest in the bk plan. So, I actually feel good about that. I have a car, in great condition that is worth about $8,000 and I owe nothing.
6 months ago, as I knew my bk was winding down, I went to my credit union and took out a secured $5,000 loan (I gave them $5,000 in a secured account, and then took out a $5,000 loan. This is the only way a bank will give a loan to someone in open BK). BUT, this will help me improve my credit and build a rapport with the credit union. FICO will not know this is a secured loan. They will only see that a loan was issued from a bank. Having this type of loan instantly boosted my credit 30 points.
As soon as my BK closes, I am buying a car. A nice car. used, but loaded. Something to reward myself, yet something I can afford. I think (and hope) that I am in a good position to get an auto loan at a good APR. Or at least a competitive APR for someone who just walked out of Chap 13.
Hard work pays off. It is a long road. For those who are just beginning, I can recommend that you use the next 60 months to start taking steps to rebuild . . rebuild . . rebuild.
Don't shoot for a credit card in the first 2 years, as you will certainly get declined. Don't apply for more than 4 cards a year, or it will hurt your credit. Go slow. . . but steady.
you CAN have your life back, when this is over!!
Best of luck
MY BK was not a huge amount (but then again, that depends on what you compare it to). I was working full time for min wage, and living from check to check. By the time I got paid every two weeks, I had already been broke for 3 days, hoping I had enough gas to get me through.
I worked full time as a temp, and my employer kept promising me a "career" with a huge promotion. I really felt he was sincere so I toughed it out. Then one day, my car died. Engine repair would cost about $1,200. Without a car, I don't work. But how can I fix my car with no money?
I did the only thing I could think of. I used my rent money to fix my car . . rent went late. Credit cards went late or underpaid, hoping to catch up later. BUT . . one late $40 credit card payment resulted in huge fees, and a new minimum payment that was triple what it had been previously. If I can't pay $40/month, how could I now pay $120 a month? Soon late fees became late AND over the limit fees. I began an ugly spiral downwards. Can't come out of it. Interest rates on Credit cards rose to 24%. Creditors called every day. Some were decent and worked with me. Other creditors were bull dogs.
In about 8 months time, my old CC bills of $3,000 were now a whopping $8,000 due to late fees, over limit fees, and ridiculous APR. My car finally DIED, and I tried my best to get a loan for a cheap car . . but guess what? No bank wants to give me a loan for a cheap car with low payments, because of my bad credit. The banks would only give me a loan for a brand new car, so there would be equity. GREAT . . so here we go.
Finally, it happened. I DID get my big promotion at work and went from making min wage, to 42K year. My first check, I immediately called all of my creditors to try to work out a deal. Most were very happy and willing to work with me. With one exception: Chase Bank.
I owed Chase Bank about $4,000 (mostly fees). I offered them $700 from my first check, with $200/month until it was paid off. That was all I can afford, and still make payments to everyone else. They said NO! They wanted all $4,000 now . . or nothing. If I can't give $4,000.00 immediately, they will garnish my wages.
I knew if they garnish my wages, it would be a 20 year tornado coming. If they garnished my wages, I can't afford to pay my other creditors, which means all of my creditors will simply get in a long line and garnish my wages one after another.
I made the decision to file chapter 13, so that I could put an end to the insane fees, and interest charges. For me, it would mean that I would be able to put closure to this mess in 5 years, rather than 25 years.
My plan was set so that I would pay the full amount of my car, and then 10% to all other creditors . . . totaling about $28,000 over 5 years. I would be paying $480 a month directly out of my check before I ever saw it.
For me, it was the best thing . . Because I just got my big raise, and therefore never really knowing what it was like to see a full check, I never missed the money that was taken out lol.
My credit tanked to the low 500's. Cash was a way of life.
Then, about 2 years into my BK, I suddenly got a pre approved credit card from WAMU (God bless WAMU). My CS was around 630 at that time. To my SHOCK, they approved me for $4,500 CL.
I was careful with my card. Charged dinner and paid it off next month. Sometimes I let it role for 3 months . . carrying a balance, but always paid on time.
Soon after, I got pre approved for another WAMU card, also at $4,500 CL. I used this card in the same way as the first . . VERY carefully and strategically.
Soon, 4 more cards followed. . . . Credit One ($1,000) JCP ($1,000), Orchard ($300), Discover ($300).
I stuck to my plan. Used these cards carefully. Only when I knew I had the cash to pay them off would I use them.
In the middle of a bk13, my credit score rose .. . 640, 650, 680, 710.
My chapter 13 is in its final stages. I have paid the base plan, and am awaiting to fall into "closing" status. I have a decent credit score for someone just walking out of BK 13.
Over the last few years, I saw some raises at work . . I am now in the 60k range. My life is much more stable. No more living check to check . . and hoping the gas fumes in my car last until payday.
My car, which was brand new at time of bk filing, is now all paid off. I paid it in full, plus 9% interest in the bk plan. So, I actually feel good about that. I have a car, in great condition that is worth about $8,000 and I owe nothing.
6 months ago, as I knew my bk was winding down, I went to my credit union and took out a secured $5,000 loan (I gave them $5,000 in a secured account, and then took out a $5,000 loan. This is the only way a bank will give a loan to someone in open BK). BUT, this will help me improve my credit and build a rapport with the credit union. FICO will not know this is a secured loan. They will only see that a loan was issued from a bank. Having this type of loan instantly boosted my credit 30 points.
As soon as my BK closes, I am buying a car. A nice car. used, but loaded. Something to reward myself, yet something I can afford. I think (and hope) that I am in a good position to get an auto loan at a good APR. Or at least a competitive APR for someone who just walked out of Chap 13.
Hard work pays off. It is a long road. For those who are just beginning, I can recommend that you use the next 60 months to start taking steps to rebuild . . rebuild . . rebuild.
Don't shoot for a credit card in the first 2 years, as you will certainly get declined. Don't apply for more than 4 cards a year, or it will hurt your credit. Go slow. . . but steady.
you CAN have your life back, when this is over!!
Best of luck
Your story is what I am hoping for....
Bankruptcy Wizard
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