Discharged & Closed?

[jennga]

No, you said when the whole thing is said and done it will probably cost you 10k. That sucks it really does. The Trustee is d*ck and I don't even care if it was a woman, what a crappy thing to do.

I know you are greatful for the debt that was discharged and since your case is also closed that part should be all good.

[JimH]

......and I settled out of court for a few thousand dollars.

This is what I was commenting on - an additional $3k for the equip you were brought back in over. So in the end it cost you $10k total but how much debt is now gone?

[DanaS]

JimH, a substantial amount of debt was relieved but in my mind nearly all of the debt was for interest and fees. In reality, since lenders use the rule of 78's, etc. in which they manage to charge most of the interest up front, the debt on the books appears mostly as principal (which is scheduled to go on years past one's death). In other words, had I not had to finance all of my purchases over the years I would have been debt free - nearly all of my income has gone to interest and fees for years. I also never made minimum payments - most of the time I paid 2 to 3 times the minimum, but with Credit Card companies changing the deals repeatedly over the past few years together with my business equipment and software becoming obsolete so quickly - it finally turned into quicksand. Just from 3 months last summer I have saved a 3-inch stack of "Change In Agreement" notices from Creditors - all this without a single late payment - all 3 credit reports showed that I had made 3,600 payments on time at the date of my filing. This is no excuse for me letting this situation get so far out of hand, but it really IS different than someone who has a lot of credit, goes out and purchases maybe $100,000 of computer equipment on credit cards in one year and then files Chapter 7 in an attempt to get a bunch of new equipment without having to pay but a few dollars for it. My debt was not recent debt, but long term debt and nearly everything I was paying on needs to be replaced again even now (if I stay in this business which is being debated - if so, for sure the business model has to change).

In going back over my records from the past several years virtually all of the debt was business related and came from purchasing computer equipment, software and training materials. Most of the computer related equipment was generally good for about 2 years before it was obsolete in what I do and the software averaged a year before upgrades were mandatory (every year - just like a CPA).

All of the Credit Card companies as a whole were repaid the total amount of what I borrowed, they just did not get the constantly changing interest they wanted - Of course, the way they look at it, nothing but interest had been paid for all these years and none of the principal. The difference I am trying to allude to is that I wrote checks to credit card companies which totaled in the hundreds-of-thousands of dollars over the years (for things which today have a resale value of almost zero). That IS different than a recent debt offender who may get away with a street value of maybe $80,000 in new sellable equipment and only paid back a few hundred dollars to creditors. If I had been trying to get away with something, I still had nearly $200,000 in unsecured credit lines with credit cards the day I filed Chapter 7 - at the very least if I had been sleazy I would have gone out and purchased new equipment (which I desparately need now) several months preceeding my petition. Instead, even against my Attorney's advice, after our initial meeting I cashed in thousands of dollars in annuities, savings bonds, savings accounts - everything I had and sent all of it to credit cards for payments - and this was after I had made the decision to file! Everyone was asking me why I did that and to be honest I was so into the habit of making payments to all these creditors on time, I was not thinking about how I was going to eat the next month following my filing - so I starved.

What got me into this shape was multi-staged - I could have weathered a single blow, but not everything the past few years. Although I am sure nobody wants to hear another hard luck story - this is a condensed version of mine.

10 years ago I had about $17,000 in unsecured debt on a couple cards - not good, but managable (all business debt). I had lived in the same small 800sf apartment for 25 years after graduating from college. For several reasons I was forced to move from that apartment with little notice and for the first time that I can remember, housing interest rates were low and a single person could get a home loan for 5% down. Therefore, I worked 18 hour days for 2 months and managed to scrape together a $5,000 down payment on a $100,000 home (which I am still paying on until about 5 years after I die). This is really when the problems started.

I had the house custom built - it was small, but all I needed being single and was at least a small step up from apartment life. As soon as the house was finished and I was moving in, I found out that when you build a home nothing is included. When I say "nothing", I mean not even curtain bars on the windows. Step one was to cover the windows - $1800 in shutters not anticipated. In all, there was about $10,000 worth of unanticipated expenses that I thought would be included. Then 3 months later all the carpet started to fall apart (and the whole house was carpeted). It took one year to get a factory rep out to declare that the carpet was defective and they told me that since it was under warranty I would get a full-credit. The full-credit was in the amount of $850 which was the actual cost of the carpet, before the showroom and builder markup which was rolled into my 30-year mortgage (about $4500). Therefore, I had to pay out of pocket $3,800 for new carpet as well as the $4500 for the 3-month carpet they hauled off - (resulting in tens-of-thousands of dollars in carpet and interest over the next 30 years) - everybodys response "Sue the builder".

Then there was the roof. I live in a windy area and keep pretty much to myself since I work all the time. However, if it were not for my roof I would never have met any of my neighbors. From day one, everytime a breeze would come up, one of my neighbors would ring my doorbell with a stack of shingles that landed in their yard sending their kids and pets running for cover. I called the builder and he kept sending out people to patch the roof until after 3 years it looked like a jigsaw puzzle. Everytime I called my insurance company (Farmers) they said they would do nothing unless nearly the whole roof came off. They said again "Sue the builder". Finally one entire side of the roof blew off (we are still finding pieces a block away years later) - Insurance and Builder said there was nothing they could do - so I bought a new roof (no choice) and once again still paying $10,000 plus interest to the mortgage company for the roof they hauled off in Pedro's pickup truck. During this period, my homeowners insurance trippled and my coverage dropped to about 1/3 - I am now only covered for damage from a derailed locomotive as long as I can show proof that I do not live within 5 miles of any railroad tracks. The home related horror stories go on and on including finally replacing the water-saving toilets that had to be flushed 5 times in order to SAVE water. I never had a "dream" of owning a home (of course nobody ever really owns a home unless their property taxes and insurance are paid until death after the mortgage is satisfied) - for me after a few weeks of ownership my only dream was to have a toilet that would flush in one turn of the handle - I used to watch my hair grow in the mirror after each bout waiting for the tank to refill so I could see if this might be the winning stroke - I finally got my dream - another $1000 and still paying the mortgage company for the old toilets for 30 years plus interest. Everybody said "Sue the Government" for passing this watersaving BS. Enough on the home - if that had been my only problem I would have still pulled out of debt.

I have been self-employed since 1978 and in the computer-related business since 1989. It all began when an Apple computer salesman showed me a new SE-30 Apple computer for $4200. After he convinced me that this was worth the extra money because it would be the last computer I would ever need, I wrote him a check. (that was 10 computers ago BTW). I also purchased an Abaton 300dpi scanner for $10,000 which only scanned in black and white, and my neighbors in the next apartment would bang on the wall everytime I hit "scan" because it sounded like I was using a leaf-blower in my apartment at 3:00am - fortunately it only took about 5 minutes to scan a single page. To make a long story short, again, today I can get a 9600 dpi color scanner for $100 and it is silent, but it was my $10,000 that funded the research. After 5 years of using the Abaton as a door-stop, I threw it away along with tens-of-thousands of dollars of similar stories over the years. I remember buying (8) 64-meg ram chips for a SuperMac computer in 1993 for $8,800 - that same amount of Ram today - less than 100-bucks. And as always they redesign the systems every year so that you have to buy all new cards, ram, etc. I guess the point I am making is that nobody could foresee back in the beginning of all this that computers and software would change so quickly and once you were invested up to your eyeballs (and it was your business) there was no escape. As bad as all that was digital printers were the worst hit. I have one $14,000 printer that only made 50 prints before Xerox quit selling that model, within two years after purchase you could not buy ink, parts or get service. Oh yes, and there were the $2,000/year service agreements that all you got in exchange was a toll-free number where you could spend you days listening to elevator music while on hold. Again, although this was a huge amount of my debt pyramid - I still could have pulled out.

By the year 2000 I finally came to the realization that there was no such thing as self-employment. In reality, I had given up a job in 1978 with a boss that I hated in exchange for a business with 50 bosses (clients) that I could not stand - I just got to decide which one to bear each day. I was finally making good money, working out of the house, but the 80-hours weeks were killing me trying to keep all these clients satisfied - just like spinning plates. Therefore, in 2000 I decided something had to change and after several months I secured the "dream" contract - 5 years minimum, $72,000.year, new car thrown in, generous stock options and only 15 hours per week! That meant I could still keep many of my other clients and make some serious money - in fact, on paper I would have been out of debt in 1-1/2 years! So after 3 months and regular checks coming in for the first time in 22 years I realized that the only way I could keep this contract was to at least give up my two largest clients which I reluctantly did with a letter to each. I was still making more money than ever before and not too worried. Then one morning on or about September 9th 2001 (after only a few months into my new contract) I got a call from my brother and he said "Are you watching TV". As I watched the twin towers fall, I also saw my contract go with them. The next morning I got the call that all contracts had been terminated because my contract was tied directly to the Travel/Cruise industry which died completely in the months to follow. So here I was on September 10th having lost 70% of my income overnight, had told my best two former clients to replace me (which they did at twice the cost), and now I was sitting on my new dream toilet trying to clean myself with what was left of my stock options (which BTW was not a good idea). I had just purchased all new computer equipment to fullfill my contract responsibilities and sold my previous vehicle since they were supplying me with a new car. Only now if I wanted to keep the car I had to take over the lease which was twice the payment of my previous car, but since I did not have to qualify I took the deal.

OK, after 9/11 I knew I was in trouble debt-wise. Everybody told me to file bankruptcy (since that is what most of the travel agents were doing following 9/11). In fact, the owner of our biggest travel agency client in Dallas filed bankruptcy the next month and last I heard was working at McDonalds. However, for me bankruptcy was not in my vocabulary. I always associated it with the ultimate shirking of responsibility - after all I am the one that agreed to all these open-ended charge-whatever-they-want-on-a-whim contracts. I did not get into debt by being irresponsible (in one sense) it was really more of a result of accepting responsibility for others mistakes, problems and shortcomings. I also felt a tremendous amount of guilt after 9/11 - who was I to complain - all I could ***** about was money - seemed pretty petty compared to the issues encountered by the families of the survivors. So I decided to fight my way out (big mistake).
Just about the time I got back up to speed, my 84 year old Mother got ill and I was the only person she could turn to. We were never close and even went through a 5 year period of not speaking at all, but I could not leave her stranded - without her I would not be having all this fun. All my other relatives died quickly when I was young - either same day or after a week or two of an incident, so I assumed the same would be true for my Mother. Bad assumption. I lost count of how many Emergency Ambulance calls we had over the next 3 years. The $75,000 she had saved was gone in a few months to babysitters and nurses. All-in-all I am guessing the medical bills that the Government picked up were in the hundreds of thousands of dollars on top of that over the next 3 years of Hell as she spent almost as much time in the hospital as out. As for me the phone rang constantly for 3 years and I got almost no sleep - many times having to get up at 3:00am and drive across town to her apartment or a Hospital. As a result my business suffered even more with the stress of being told at least 6 times over three years that she would not make it through the night - only to bounce back. Finally in June last year there was no option left but a nursing home where they killed her 6 weeks later. So I had that guilt to deal with as well, but there were simply no options. As soon as she was buried it was like ten tons had been lifted off of me - only to realize just how bad a financial shape this had left me in. Two weeks after her funeral, I went to an Attorney to discuss my only option - bankruptcy.

That is just one more hard luck story for the books, but I did not get into debt by having a party. I am 55, never had a drink or even tasted alcohol, never had a cigarette, never taken prescription or any other "drugs", never tasted coffee, never had a date and haven't been involved with even one person for one moment in over 15 years, also have not had one vacation day - ever! All I did was work to retire other people. What I am trying to say is that I don't believe that the Credit Card companies lost anything on me - even if they did is was a fraction of what they tried to get me to lose for them. After all they are in the "unsecured" credit high-risk business BY CHOICE - that is why their rewards are so high. At least it is unscured until you file bankruptcy and then everyone starts running in circles trying to make it "secured" - must be nice. What is really phenominal to me about this Credit Card thing is that their only real collateral is the good name and honesty of the borrowers and the first time a borrower even slips in a payment, the first thing they do is try to destroy their collateral by devaluing it on a credit report. Name one other lending option that destroys it's collateral if a payment is late! It can only mean one thing - the lender never put any value on the collateral to begin with or they would work with borrowers to both get their money back and maintain the name of their collateral if at all possible. But lets face it, if they intended to get the money back, they would not be lending $100,000 to 84 year old women without a job and only requiring a payment of a few hundred a month - let's get real! If YOU were loaning your money to someone, would you stuff their mailbox with hundreds of ads to get them to take a dream vacation or even "use this check to pay your Income Taxes and RELAX". How excited would you be to loan a friend $20,000 to pay his taxes - he obviously is in the red - duh! If you did, you certainly would not expect to get it back! If I saw someone taking me up on an offer like that - I would have them on a "watch list" to monitor their activity if a check cleared to the IRS on borrowed money - talk about a red flag! Well, they do put you on a list - the list that says this dumbass is so stupid lets offer him a $10,000 increase in credit line - why not - their goal is not to get paid back but to make sure you die trying as they sit out on the beach changing the deal every month and laughing at hard-working people (for the most part) who are footing the bill for their jets and $1200 a night suites. The reason I know this must not be their money they are loaning is simple - they get mad if you pay them back! Just think (this is not rocket science) if YOU loan a friend $1000 how upset would you be if he paid it back (fat chance). Would you start calling your friend every week asking him if he would like to borrow $2000 more? Get serious. I paid off one credit card last summer and they were on the phone to me 3 days later asking what they did wrong and offered to drop my interest rate 10% if I would let them transfer the debt back - this with a credit report that was bursting at the seams with debt - not a concern - because of my perfect pay history they smelled blood.

I have had to extend unsecured "credit" to clients myself as an individual in business over the years and I have often told them that a line of credit represents the maximum amount of debt I am willing to write of on you in the end. The reason is because the one bill that every client will end up not paying is the last bill (when their credit is usually at its highest). They will either go out of business and say "Sorry" or just vanish. So it is at best a dance. In my case, I try to evaluate their need of my unique services at regular intervals and if I see or sense a problem in their business or if I have not made lots of money on them over the years the credit ends. Not so with credit card companies. There will come a day when the CEO of the last bank standing will be called before Congress and have to answer the question "Why did you loan an 86 year old woman on Social Security $100,000 unsecured". I can already hear the pin dropping in the room.

I know this response went off in several directions, but nobody will get past the 3rd paragraph anyway - it was good therapy for me. This is a result of the hostility that builds up in unquestionably honest people (like myself) in which integrity is paramount and that have never shirked any responsibility in 55 years (until now). I accept full responsibility for letting this credit thing get out of hand and I will have to carry this failure on public record for the rest of my life, but let it be known that I never soliceited a single creditor for even a dime of credit - every bit of credit I had was "Sold" to me. The creditors aren't crying tonight on the beach because they did not get somebody's principal back they are upset because I will not be writing them an interest check every month which they had counted on to be paid every month until 30 years after I died (or maybe 50 years since they can change the deal at will) - the only fear that any of these creditors have is getting paid back or discharged on - that is the end of the gravy train.

I have gone 5 months now without a Credit Card and I never want to see another one. The days are not as easy as they were before, but the nights are a dream. So to the creditors, "congratulations", you helped destroy a piece of your collateral to the point that you will never get another dime from me. You can start stuffing the next sucker's mail box with your blatant lies and zero percent interest bait and switch.

Do you detect any annoyance on my part?

[Genenco]

I know this response went off in several directions, but nobody will get past the 3rd paragraph anyway - it was good therapy for me. I have gone 5 months now without a Credit Card and I never want to see another one. The days are not as easy as they were before, but the nights are a dream. So to the creditors, "congratulations", you helped destroy a piece of your collateral to the point that you will never get another dime from me. You can start stuffing the next sucker's mail box with your blatant lies and zero percent interest bait and switch.

Do you detect any annoyance on my part?

I read it all DanaS. You'll get NO arguement from me...I did apply for some, but made payments and more to them and then when trouble hit I begged for help..I mean it, I BEGGED...Nothing..So, I agree..."F**K THEM ALL!!!!

If I was so experienced as a "Hacker" I'd try some things, but I am not, but hope one day, someone will realize that "Moral Justice" may be the thing those bastards need!!!

Hugs and best wishes!!!

(Did you notice you got my dander up with what they did to you?)

[JimH]

That's quite a disfortune. Well now you can put all that behind you.

[DanaS]

I hope so, I guess I will know more when I scrape the money together to pay the Trustee. From what I understand there will be an agreement to sign and my Attorney says the the Trustee will be agreeing to not pursue the case any further if I pay the fine. We will see if any such "agreement" surfaces when I show up with the money! If not, I guess he can keep coming back to the till every month if he changes his mind, but this till is dry - I have only eaten two meals this month so far.