Well today our 30th of 60 payments on our BK13 has posted. Although progressing I am chomping at the bit as I can see us coming out in a great position. I have looked at many different angles from immediate gains to long term. What a different perspective one can gain as that light at the end of the tunnel becomes more bright. Since we have been in BK we have paid more toward retirement and our mortgage than ever before. It's still not easy as we have yet to keep any kind of emergency fund, but the retirement has made nice gains and the mortgage killer progress. So for now I see $470 in trustee payment and $216 in 401K loan (this Dec) going away for a monthly gain of $686 per month. That could be a nice car, but no way.
Some items to note;
If you made negative amortization or 0 am mortgage payments you may be in for 2 big surprises. Income tax and mortgage balance. In the 30 months we have been in our 13 we have knocked off $30,000 from the mortgage balance on an income of about $70,000+. Making payments close to on time and having mortgage arrears in our 13 have caused our interest paid for the year to be quite substantial as we have been paying deferred interest. The downside to this is that the swings are quite large. Once that deferred interest is paid our annual write off will go from $21,000 to $12,000ish. So some careful planning is in order.
While in our 13 we have had many challenges. My wife not having income in the summer is a big one, but I end up with enough overtime, reduced tax withholdings, and adjust 401K withholdings to compensate. She also totaled our van 3 months into our 13. She had to settle for whatever cash came from the insurance to pay cash for a car, but she is happy. Have had a couple major car repairs, and every time one of the kids gets sick I cringe yet try to hide it. They should not have to worry about it, but they do. Had another big tax bill come in the year after filing, and still workin on that 2 years later. There is more, but those are the big ones.
The big BK13 benefit for me are cash for everything! No choice, but we do mess up from time to time. Communication is key and we still struggle with it. We both have very different ideas on what to do with any extra cash on hand. I have to be the bad guy here, but I am not guiltless. One common thing is we like to eat out, and if the cash is not there then we don't. We stil go out a couple times a week by sacrificing something else. Its our choice.
Anyway, I just wanted to post some thoughts that I hope someone can learn from or take something away to help ease the frustration.
Keep fighting.
Killer quote that applies to many aspects of life.
Some items to note;
If you made negative amortization or 0 am mortgage payments you may be in for 2 big surprises. Income tax and mortgage balance. In the 30 months we have been in our 13 we have knocked off $30,000 from the mortgage balance on an income of about $70,000+. Making payments close to on time and having mortgage arrears in our 13 have caused our interest paid for the year to be quite substantial as we have been paying deferred interest. The downside to this is that the swings are quite large. Once that deferred interest is paid our annual write off will go from $21,000 to $12,000ish. So some careful planning is in order.
While in our 13 we have had many challenges. My wife not having income in the summer is a big one, but I end up with enough overtime, reduced tax withholdings, and adjust 401K withholdings to compensate. She also totaled our van 3 months into our 13. She had to settle for whatever cash came from the insurance to pay cash for a car, but she is happy. Have had a couple major car repairs, and every time one of the kids gets sick I cringe yet try to hide it. They should not have to worry about it, but they do. Had another big tax bill come in the year after filing, and still workin on that 2 years later. There is more, but those are the big ones.
The big BK13 benefit for me are cash for everything! No choice, but we do mess up from time to time. Communication is key and we still struggle with it. We both have very different ideas on what to do with any extra cash on hand. I have to be the bad guy here, but I am not guiltless. One common thing is we like to eat out, and if the cash is not there then we don't. We stil go out a couple times a week by sacrificing something else. Its our choice.
Anyway, I just wanted to post some thoughts that I hope someone can learn from or take something away to help ease the frustration.
Keep fighting.
Killer quote that applies to many aspects of life.
Bankruptcy Wizard
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