Feeling bad!

[RMF8591]

Filing bankruptcy with an Attorney soon. Feeling awful! I've tried everything possible to pay my debts, but just can't get there. Costs of insurances, etc. always increasing, but income stats3 the same.

[justbroke]

Welcome to BKForum. I know it's easy to say, but don't feel awful. The cost of living is always the same; all you've got. Filing is a business decision and it allows you to get a fresh start. There are lots of folks here on BKForum that are happy to talk about anything. You have questions? Everyone is here to help.

[RMF8591]

Thanks so much. Perhaps it's harder for me because I did have a great job, and never had to worry about finances. Better to never have had much!

[justbroke]

I have had the same job for 20 years and I am well compensated. It shouldn't feel hard for you as this is purely a business decision. It's no different than choosing to shut down a business because COVID left you without the means to continue indefinitely in this pandemic climate. It's okay to have more than enough and to use your otherwise excess income on investments or savings. I did the same and invested in property and businesses.

There are BKForum members that have discharged millions of dollars of debt through bankruptcy. There are some that discharged only tens of thousands. We are all the same.

[RMF8591]

Thank you. It's REALLY helpful to share my situation with others who understand. I do have a question. When I see my Attorney, give him a down payment, is it at that point I stop paying my bills? I've been struggling to make small payments, but just can't continue.

[justbroke]

Your attorney will likely have you stop payments immediately upon retaining the attorney.

If you are going to file real soon, I believe that you should stop paying now if payments hurt or endanger your ability to meet health, safety, shelter, and basic needs. Especially if you have a family to protect, feed, clothe and shelter. (Others will likely agree with this.)

[flashoflight]

RMF8591 Let me give you another perspective on this so that I hope you feel a lot less bad about filing bankruptcy. If you fail to pay the entire minimum payment and arrearages long enough, your typical big bank lender almost certainly will make full use of your local courthouse to forcibly take your money away including funds you need tomorrow to pay rent, buy groceries, or get medical treatment. You might get the money back by appealing to the court, but it usually takes months to get your money back. Your creditors will intercept your bank account, your wages, your tax refund, and even the 2021 stimulus often with no warning until after the money is gone. If you try to defend yourself in court, it will cost you hundreds of dollars in court fees just to defend without a lawyer while it's very cheap and quick for Mastercard and Visa to file the lawsuit. Liens can be filed on your real estate to compel you to pay. If you don't tell your creditors the truth about where your money is at a debtor's examination, they could haul you to jail for contempt of court. I would say the legal system in the US is pretty creditor friendly although it could be worse like the UK.

The only advantage debtors have in the US legal system regarding debt collection is to declare bankruptcy. The exemptions limit how much stuff you get to keep. Everything not protected by exemptions is sold by the trustee for liquidation to creditors. If you make too much, up to 5 years of future income is partially given to creditors. In exchange, you get rid of dischargeable debt and get a fresh start. This is practically the only advantage debtors have in the US legal system.

[RMF8591]

flashoflight justbroke Thank you both for your very helpful advice. So much to think about.

[Barbisi]

RMF8591 Cheer up!
My advise about filing is to simply think it through and make sure you are prepared for the long -time consequences of a five year BK13.
As flashoflight deftly states, there really isn't much other recourse but to file BK13 when you are over your head in CC debt you can't repay.
But you must consider things like your location (are you content to live at least 5 years with out moving, unless you are renting and must move to another rental unit),is your job secure, do you have a reliable new(er) vehicle that will not need big repair bills or replacement?
In our case, we did no real planning, but filed before we were late on any CC bills or mortgage payments, and have suffered through a stressful and miserable 4+years ,waiting for the "end" in 2022, so we can sell our house and relocate to a different state, with a better climate for our health, emotional well-being and future.
We have been dealing with 2005 and 2013 cars (both paid off) which have needed prolific repairs, the latest being a $3500 transmission in the 2013 one just to keep it running until we hopefully obtain our discharge in early 2022. Our thirty year old furnace is hanging on and we will soon find out how much the swamp cooler is going to cost to get through another blistering summer,we have long unattended to leaks in the basement laundry room,etc.

So if you own an older home, and it needs sprucing up, be forewarned : if anything breaks,you may be out of luck and with out either cash reserves or a generous 401k amount to borrow from, you may not not be able to deal with an emergency! Make sure you are able if possible to build up an emergency fund- we always save what ever money we can, but then something always fails and takes nearly every dollar away.
And, should you receive a significant salary bump, be prepared for the trustee to modify and raise your payment accordingly. This has happened to us once so far.
All disposable income must be paid to your creditors, but enough wiggle room can be formed from your allowable expenses to try to create a rudimentary fund to see you through the beginning.
Best of luck on filing and making it through what will probably be the toughest five years of your life! BK13 is no place for wimps LOL!

[Carmella]

RMF8591 It's normal to feel bad, disappointed in yourself, etc. There is a stigma on BK and it's something taboo to talk about. My husband and I only told one person, that person is now deceased so it's truly a secret. I take this back, we did also tell the CPA who does our taxes and he then told us he went through BK as well.

The honest truth is sometimes there is just no other way out of the debt we accumulated for whatever reasons it has happened. I have a good job/career, good income, my husband has a modest income, but my great income combined with his was great.

What you don't know is that there are probably people around you who have gone through BK and you just don't know it. When I got on the PACER site I did some searching and people I know have gone through BK, you wouldn't have a clue. I didn't gossip or say anything to them, I felt like a creep looking up names, but since I kept it to myself I wasn't really being a creep and it made me realize we are not alone. BK the best kept secret.

There was no way my husband and I would ever get out from under the debt. We would start to get out from under it, but never had an adequate savings so something would happen like a home repair or car repair, etc and we had to charge more. Our daughter also needed to go to a parochial school since the public school was failing her, that cost was fairly reasonable, but the two years of private tutoring to get her up to speed was more costly than the tuition during the same time period. We all have our stories as to what happened.

We went through BK13 to keep our home/cars and we have a hefty payment--paying back 100% of the debt, but it stopped the debt collectors who wanted to sue us and it stopped the interest that keeps you from getting those payments down quickly. 5 yrs and our debt will be gone. Our BK payment will not increase because we are already paying back 100% when Barbisi mentioned the payment increasing that can happen if you are paying back less than 100% and have a big increase income, generally more than 10% increase.

At this time we have 3 yrs under our belt and 2 to go. Is it easy nope, but it's what we needed to do.

MOST importantly see attorneys and find one that has a proven record in BK. A good attorney makes a world of difference. Don't be afraid to talk to a few of them. The first guy we saw was terrible and our gut told us that, which is part of the reason we procrastinated even longer. There is a time you can stop making your payments and use the money that would be payments on things that you will need. If there's a home repair (not remodel, but something like an old water heater something that is serious) and you can put money into that--into essential things.

If I knew then what I knew now I would have done a few things to keep those expenses from cropping up after we filed. Having a decent car has been recommended on the forums as well. If you need tires or a battery or whatever for the car see if you can take of that.

Find a good attorney and see what your options are. Don't delay. That's my big regret that we delayed.