Chapter 7 Diary

[Vandervecken]

Hello! I’ve been on the board a while, planning my bankruptcy. My divorce is the cause; my wife suffered a life-threatening illness and even though she survived it, her personality changed. She went crazy spending money, changing her W4, taking out massive student loans, and expecting me to bail her out time and time again. Then when emergencies hit, she always depended on me to pay for teh fix. The IRS put us on backup withholding.

After selling most of my assets (including almost all of my investment properties) to bail her out, I tried to talk to her, refuse to spend so much money. Her response was to divorce me. I guess I wasn’t of use anymore without money to spend on her. But I had seen it coming, and a local friend (who had found this board) recommended it to me. So I’ve been asking questions a while, learning, preparing.

The divorce is final. My bankruptcy attorney’s paralegal has been sending me the schedules to proofread, then in the next few days come to the office and officially file. I’d like to say “thank you” to the people on this board who have talked to me, and helped me. And to offer something back, I would like to offer this thread, a “diary” of sorts. Maybe people following me can see what happened, learn from it, avoid my mistakes, and most of all, start over!

(To the mods: if this is a bad idea, please lock the thread and send me a message.)

[Vandervecken]

Pre-filing:
The paralegal and I have been emailing PDFs of the schedules. With so many complications, it’s taken a couple of iterations to put everything in order. Fortunately, she is excellent to work with, and very patient with me. I'm frustrated with the way investment properties are listed on the schedules, but it's also the way the local trustees and judges look at it. I have one house that is seriously upside down in value, and I wish I could use it to offset the equity in the other houses. I can't. And I wish my divorce settlement would allow me to abandon it. But I can't. So I have to carry this albatross forward. Fortunately it cash flows enough to break even. And I have enough in my wildcard to apply to the other houses.

I'm waiting for a call with my attorney. I have some questions to ask to make sure I don’t shoot myself in the foot. Based on cash flow (regular pay, rent income and expenses going out), the best time to actually file is within a 3 day window, and it starts today. I know a bankruptcy is a marathon, not a sprint, but if we miss this target, the next window is two weeks away. And I really want my 341 before the Thanksgiving holiday throws everything into holiday chaos.

About two months ago, I updated all my creditors to use a Google Voice number, which I am not answering at all. A couple of them were brave enough to call my office, and I politely reminded them to only contact me through the other number. No creditor has called the work number twice.

As of 9 days ago, unsecured accounts are starting to go net-30 days late.

[justbroke]

( Vandervecken this is what the community is about... sharing experiences! Thank you. )

[LadyInTheRed]

This thread is a great idea!

I'm glad to see you are finally able to get the BK files so you can start looking forward instead of back.

[Vandervecken]

The day before filing:
Just for grins, I deleted the entire call history in Google Voice at 6 AM local time. During the business hours today, I received over 100 phone calls. Half of them were from Synchrony Bank; apparently, their computers were war-dialing me every 15 minutes. I cannot say this enough to others: USE GOOGLE VOICE!!!

The paralegal sent the final schedules to me. The only assets we could not exempt were the rental houses. All but one have "some" equity in them; there is one albatross that has negative equity, but we’re not allowed to use that negative to offset the others. This truly frustrates me, just like not being able to use student loan payments on the means test. But the sales costs for the houses will wipe out any gain, so maybe the trustee will abandon them. And they cashflow positive.

And now I plan to relax this weekend. Monday is signing day. I know, bankruptcy is a bad thing and I'm treating it like a high school football player signing with an SEC team... somewhat tacky on my part I guess. But as LITR says, I'm moving forward. Just a few months to go.

[Vandervecken]

Signed and filed
Not really a lot to say here. The paralegal, attorney and I went over the schedules. We made a couple of tweaks, brainstormed a bit. I'm above median and I don't pass the basic means test, but the expenses from the divorce are what qualifies me into a Chapter 7. So I signed, and it's filed. I have the case number, and I'm wondering how long it takes to show up in PACER.

It's strange how I feel at the moment. This has been a long road, a lot of stress and late night worries. But right now I feel a little empty and hollow. Maybe even a little last-second remorse at filing. But it's too late to back out now! And my head knew this was the only viable path forward.

[Vandervecken]

And then, there was quiet...

Yesterday, suddenly there were (almost) no more calls to the Google Voice number! The lone caller now is Citibank... somewhat like a persistent puppy...

PACER has my case now. The 341 is scheduled for mid-December. I checked the creditor mailing matrix, and yep! my ex-wife is on it. She should get the latter today, so I'll watch my phone blow up tonight. I have to admit, I have a slight sense of delicious delight in knowing she'll panic. I know I shouldn't feel this way, but after the last three years of hell living with her, this will be a small way to even the scales. She's completely protected of course, the only debts we have in common are in the divorce agreement and the CH-7 follows it.

All my online access to the accounts is gone now. I've called the mortgage servicers, and my November payments were credited on November 1. They received the BK notice on November 2, including the intent to reaffirm. I called both mortgage services to ask about what their procedures are going forward, and their BK departments were surprisingly friendly and forthcoming. In short nothing to worry about for now, call them to make the December payments. (Yes, I have a phone recorder, and yes, I used it!)

I have two VISA accounts with security interest through Wells Fargo (air conditioning systems). In the divorce agreement I took them on, so they're being reaffirmed as well. I spoke to them as well, their BK person said to wait on any payments until after the 341. I'll double check that with my attorney, of course.

As far as the rental houses, one tenant has moved out, so I'm cleaning the house and trying to get it on the market. That, plus the regular day job, keeps me busy right now.

[LadyInTheRed]

The day before filing:
And now I plan to relax this weekend. Monday is signing day. I know, bankruptcy is a bad thing and I'm treating it like a high school football player signing with an SEC team... somewhat tacky on my part I guess.

I was very excited when I filed. When friends asked me how I was, I couldn't help but tell them about it. I felt no shame and wasn't worried about judgement. I couldn't help but talk about it, because it was what was on my mind. I was so relieved to be able to get a handle on my financial situation before it spun completely out of control, which would have happened about 9 months later if I hadn't filed. If the excitement that goes along with that relief is tacky, be tacky!

Signed and filed
It's strange how I feel at the moment. This has been a long road, a lot of stress and late night worries. But right now I feel a little empty and hollow. Maybe even a little last-second remorse at filing. But it's too late to back out now! And my head knew this was the only viable path forward.

I like tacky Vandervecken better than remorseful Vandervecken.

I have to admit, I have a slight sense of delicious delight in knowing she'll panic. I know I shouldn't feel this way, but after the last three years of hell living with her, this will be a small way to even the scales.

Is it tacky that I kinda like vengeful Vandervecken too?

Congratulations on getting your petition filed! I look forward to following your diary.

[Vandervecken]

Is it tacky that I kinda like vengeful Vandervecken too?

Congratulations on getting your petition filed! I look forward to following your diary.

Thanks, LITR! You, JustBroke, AngelinaCat (and Hub!) and others were kind and patient with me, and taught me a lot. I had two attorneys want to do a cookie-cutter C-13, but kept looking until I found my current one. My current attorney does nothing but bankruptcy, clerked for a BK judge, etc. At first she said I would be in a C-13 as well, but after looking at the divorce settlement said, "Yes! You qualify for a 7!" And I had structured the property settlement based on all the advice I had read here!!! As an example: I have to make the payment on my son's car (still titled in my name and the ex's name.) That's all it says in the settlement, just the payment. But it also qualifies me to deduct the operating expenses on the means test!

This site is fantastic! So if my little diary helps, I'm glad to do it!

P.S... the remorse didn't last long!

[Vandervecken]

Happy Thanksgiving!

Not a whole lot going on right now, but some interesting items have popped up.

About half of the reaffirmation agreements have come in, and I signed them. Something of interest here: my ex-wife and I had taken out a "Home Projects" credit card from Wells Fargo to replace the central air conditioner in my house. It was 9.9%, 60 month. The reaffirmation agreement dropped the rate to 0%, and will cut a year off the repayment time for the same payment amount! Believe me, I'm not complaining!!!

Also, found a creditor had been left off the mailing matrix: BillMeLater (PayPal Credit.) To be honest, I simply missed it when reviewing the schedules, and since they do not report to the credit bureaus my paralegal didn't see it either. I spoke to them by phone, gave the docket number, and everything is fine. I was a bit worried at first, but again, taking the time to find a good paralegal and attorney is paying off.

On the other hand, one bad thing has happened: my LLC (rental houses) has a separate EIN and credit file with Dunn and Bradstreet. The idea was for the LLC to build credit in its name and future house purchases would be under its credit, not mine. The LLC has three credit lines for running the rental; two of them were at $0 balance when I filed. The third had a balance and in our paperwork we noted this was a business account, the business was NOT filing bankruptcy, and the account would be paid as normal.

BUT... the creditor involved closed the account and charged it off, and reported it to D&B as derogatory... thereby trashing my LLC's credit. I called the creditor and their representative said they don't consider a single-member LLC to be a "real" business (yes, I did record the conversation.) So, my attorney has sent them a little letter... if the creditor will back down, reopen and fix their reporting, I'll pay the balance in full. If not, then we'll review the reaffirmation agreement so they are a general unsecured (in other words, nothing.)

Happy Thanksgiving, everybody!

[Vandervecken]

One week to 341

Since it's been 6 weeks since I filed, I thought there was enough time to pull a 3-bureau report from MyFICO and start looking at it. Obviously it's too early to dispute anything, but I wanted to make sure the joint accounts with my ex are reporting a correct status. My TU score is 551, Equifax and Experian are both 593. The joint accounts look correct, and I'm continuing to make payments on them, as per my divorce agreement. Believe it or not, when I make the payment, the people on the phone are actually nice and professional!

My 341 is a week from tomorrow. I checked PACER today, no changes or updates.

[LadyInTheRed]

Hi Vandervecken,

I am glad things are moving along, mostly as expected. I am not surprised by the issue with the LLC. Even if it weren't a single member LLC, lenders often require a personal guaranty from an LLC or partnership. I bet you signed personal guaranties when the LLC obtained credit. Those guaranties are discharged in your BK. Without somebody else to guaranty the LLC's debts, the creditors close the accounts. The same thing happens if the guarantor dies and there is no qualified person to sign a replacement guaranty.

[Vandervecken]

341 Meeting Day

So today ended up being a mixed bag. My 341 meeting was this morning, and no, I did not sleep well. My attorney had assured me everything was fine, but we all know that being nervous is part of the process.

Before going to the meeting, I did a last-minute check of PACER, and saw a new flag: MEANSNO. Yay! I know my attorney had told me several times not to worry, the means test was straightforward and in my favor, but still it was very good to see the status.

Then it was on to the 341 meeting. Several people went before me, so I was able to get a good feel for the trustee. He comes across as fair, expert in the cases, and absolutely no-nonsense. Perfectly fine by me. After about 30 minutes it was my turn. Everything was straightforward, until he came to the rental houses. As a reminder, I have two left: one has some equity, the other is significantly upside-down.

He asked some specific questions about the legal structure, especially the title being under a single-member LLC. They were not in the tone of being accusatory; rather they were in the tone of trying to put the numbers into the correct column. But at the end, he looked at my attorney and said “there seems to be significant equity in this rental house. I’m going to continue the meeting, so I can look closer at the numbers.”

To be honest, this was not a surprise. Here are the numbers:

Appraised value: 156,000
Mortgages: 132,000
Wildcard exemption: 3,000
-------
Equity: 20,000

Against the equity we have the expenses to sell:
Agent commission: 9,300
Closing costs: 2,000
-------
12,300

Amount to trustee: 7,300

So yes, there is some equity, if the trustee chooses to pursue it. The numbers above do not include any costs of breaking the current tenant's lease, cleaning up the house, etc. That's a lot of effort for the trustee. But in case the trustee wants to pursue, I have an IRA that I can withdraw cash from in order to buy back the equity from the trustee. The frustration will be in waiting to see his response, then make our offer. And of course we have the holidays to slow things down more!

But, it was another step forward.

[Vandervecken]

The 341 continuation was earlier this week. My attorney told me I was not required to be there, so I didn't go. Her paralegal told me my case didn't come up.

I checked PACER last night, and the trustee has continued the 341 meeting AGAIN... the new date is now in February, a few days before the original 60 day deadline for objections to discharge.

This is seriously frustrating... I know that bankruptcy is a marathon, not a sprint, and I know we've had Thanksgiving, Christmas, New Years and now MLK holidays to disrupt the work schedule. But I really want to put this behind me.

[leonel9]

Out of curiosity, is your trustee asking for any additional documentation (e.g. bank statements) while your meeting is being continued? My trustee has asked for bank statements up to the date of the 341 meeting. This has been a little challenging b/c some statements will not be produced until after the meeting (e.g. Jan statement available Feb 4th, but 341 meeting scheduled for Feb 2nd). I can only imagine what will happen if I don't have everything she is requesting -- it could be continued, requiring more statements. My attorney says she is unique in asking for statements after filing.