If You Had $40,000 in Cash After Backruptcy, What Would You Do?

[jessiediamond]

After bankruptcy (seven months from now, if I do it), I may have a four-relative combo present (4 x $10,000) to help me get back on my feet. Obviously, I'm way more in-debt than that, or else I might be able to get them to help me out. They've already been helping pay for my life, and they aren't going to pay anymore just to send it down the drain of credit card interest. So, it's essentially no money, or--if I'm lucky--a nice gift of $40,000 waiting to help me get started again.

I was an academic (professor), and I had to quit teaching. After nursing my wife through terrible mental illness (10+ in-patient lock-ups in the behavioral ward PLUS multiple suicides---all spanning the course of the last five years), I was a wreck myself: insomnia, social anxiety, inability to lie to my boss (an inability, because he thought fantastically high teaching reviews were a sign of a bad teacher, and I had to agree with him and work to lower my teaching reviews. A long story, and not one involving grade inflation, by the way: my grades were tough)

Sorry for that! Anyway, I may be considering bankruptcy because I have debt that may not be payable by a person (me) already tapped out from 5 years of 18-hour days.

Anyway, what would you do with $40???? I'd love any interesting idea!!

One Idea: Not many people consider a homestead or small farm as a way to keep food on the table. Maybe move down south, find a house on a small farm, and reduce my way of life? My wife IS capable of farm labor, and so am I.

Or, what other's things could $40,000 be used for. I'm not a creative career planner, and I'm very down in spirits now, so I'm not operating at full capacities.

Any input and neat ideas would be welcome!!!

Thanks so much!!!!

Jessie

[Phillymanhere]

Oh man, this is a great question. But before answering, I wanna say that I can't tell from your post whether or not you will have a job and a steady income after filing. The first priority is to get such a steady income because without that, you won't have this problem to worry about: the 40K will be gone as you use it to live on!

Now to answer you. If I got 40K after filing, I would do several things:

1.) I would spend a very small amount on a hobby or fun ... for example, I would use $500 or so to spend a full day with a renowned swimming instructor.

2.) I might put aside another $500 for weekly massages (the legit neuromuscular kind, not the other kind!) ....

3.) I might take a few short trips that I've wanted to take ... I've only been abroad once ..

4.) I think I'd spent at the most 5k on "fun" stuff like #1, #2 and #3 ...

5.) If I really needed a car, I would purchase a good used car after working my way through Craigslist to find a good deal from someone not hard up for money but who wants to quickly unload a car ... a toyota or honda owned by an elderly lady who has recently passed (with low mileage) would be great here ....

6.) I would put the vast majority of the money in an emergency fund, a fund that would get me through a layoff for a year or so. This follows the advice of all those financial folks who say we should always have 3 to 6 months of income saved in order to get us through a hard time ... Well, why not a full year? I make about 42K gross a year, so $35K or $30K would easily get me through a full year if I had a layoff or something.

7.) I would NOT use this money for routine spending such as car repairs or a new refrigerator .. I'd like to create other savings for that ... I mean set it aside for a really bad emergency! The layoff scenario, which just seems all too real for me, more real than any previous time in my life.

That's what I would do ... By the way, there is a subtle psychological element involved here. One reason I would want to spend about 5k on hobbies and fun is that doing so would shut up the inner 4-year-old in me, the one who loves to spend without thinking about the consequences. Because once the 4-year-old starts to scream, I tend to give in ... So bribe the brat up front, above board ... Then do the adult action.

So what's your thinking so far?

[JRScott]

Legally since you are expecting this now, it is part of the bk estate. Which means if the trustee finds out about it he could seize it.

If you get the money clear and its exempted I'd put say 20k in a money market account. Then possibly use the other 20k for a downpayment on something like a farm. Farms are pretty expensive though and coming out of bankruptcy I doubt that would finance much. While wages in the southeast are depressed (with the exception of Florida) land prices in the southeast have not changed drastically as a result of the sub prime bubble (with the exception of Florida, and Atlanta, Ga).

[jessiediamond]

I'm not sure how this could be part of the bankruptcy estate, considering this is just a possibility. It's nothing certain.

Anyway, I'm not sure about a steady job. I'm not emplyed now, except for a small business that brings in a grand or so a month.

That's why I'm looking for alternatives. I'd like to drop out of the corporate climate and maybe into a smaller life, where I work for my own food. That's why I mentioned the small farm.

I suppose I'll need a different forum for that! ;-)

Anyway, thanks for the ideas. I have about six months to "re-invent" my life, so I want to make good decisions once I'm threough with the bankruptcy--if it indeed happens.

Best Wishes!

Jessie

[MomIcantFindmy]

I dreamed for a while about a farm also. I found some small towns in the Midwest where you could buy a house for about 40K. Of course you would end up doing some repair work. Have you thought about writing books, magazine and newspaper articles for money.

I think if I had 40K I would bank about 35K and keep about 5K stashed somewhere else. I would save it all. I have become the biggest tightwad since filing. I save every penny.

Last note: What a great guy to help your wife through all of her medical issues! That takes a strong person. You are even considering her in your 40K plans! I am very impressed.

[JayJay]

I'd love to start a business selling stuff in flea malls and online, mostly computer stuff. Of course, without a lot of overhead because I believe this is where most business fail and never get to that break-even point for profits.

[keepmine]

The object of the bk execrise is, a fresh start with your finances.
First thing you have to do is fix the issues that created the bk and then, make sure you can support yourself and your family post bk. That means a job plain and simple.
GAWD NO don't buy a farm. As someone that comes from an agricultural background, you have no idea of the cost of equipment and storage stuctures. The high energy cost we all face are really hard on farmers as the costs of inputs has risen dramatically-fertilizer, pesticides, herbicides, propane for dryers, plus, the cost of fuel just to opeate equipment. We haven't even got to the issue of the costs of land {rents}. With no job, you won't get any sort of financing to buy land and a house.

Honestly, it's time for a reality check. You can't survive on a grand a month. Time to put aside what you want to do and do what you have to do and that's get a job and support your family. For sure, you need something that has a health benefits package.
That $40K if it comes needs to be banked . It's nice to come out of bk with a positive networth. Many don't have that opportunity.

[S2008]

Jesse, best wishes for your future life. Put away your $40,000 in a mutual fund that has a good track record. It will turn into $1,000,000 in 30 yrs (assuming 12% return).
$1million will spit out $100K/yr on interest income alone. OK, I exaggerated a bit in assumptions to make my point, which is, use the $40K as your seed money. Don't consume it.

For consumption money, go back to teaching. You can teach at community colleges without too much pressure and stress to keep publishing, etc.

Last but not least, find a good church to be a part of. All of us have spiritual as well as physical needs. At the end of it all, this life is temporary.

Best wishes for you and yours!
S2008

[dealingsdone]

To be honest I would take it all to Vegas and have a ball!

[breezyday]

Well don’t blow it in Vegas!

If you can buy a small modest place in the country & a good used car and owe nothing, (free and clear) I would say you would be one lucky person!
Maybe buy some kind of livestock to make some extra money (chickens> eggs?), grow your own food.
I have a neighbor whom has a small green house, she sell plants in the spring plus grows vegetables in the summer and make a nice income.
Some of her income comes from propagating house plants, she told me she can make $200. A weekend. She calls it her retirement hobby!
Small road side stand, her husband even makes a few birdhouses & flower boxes to add.
The lady will paint them wild colors. All her paint is free from people on free-cycle.
After projects they save her the left over paint.

[funspot08]

Legally since you are expecting this now, it is part of the bk estate. Which means if the trustee finds out about it he could seize it.

That's not the case. He said he "might" be receiving money, not will be. That makes a big difference. So, he lets say he files a Chapter 7, it's discharged in a few months, he has a fresh start and then the relatives decide to give him a gift. Not a problem.

[Gab]

There is an old joke about farming that goes like this: A farmer won the state lottery. He was asked what he would do with the money and his answer was, "I'll just keep doing what I"ve been doing until it's gone."

If it were me, getting that kind of money right after a bankruptcy, I would be afraid to do anything except stick it in savings.

[justplaintired]

First off this is a maybe, might happen, maybe not, might not happen, so I don't really get what this would have to do with your BK. Nothing wrong with a dream, so I say let's dream. Here's my dream with $40K.

Maybe a small farm? Something you can grow veggies in the summer and then freeze or can for the winter. A place where you can have an outside wood burning stove to save on heat bills. Indiana has lots of nice pieces of property that would fit this well. A couple acres maybe? Nice big huge garden with maybe a small piece of land for a cow or pig to butcher? I would invest 1/2 of the money is this dream, then the other half I would invest. You will need a job if you don't have one. Maybe something non stressful to help when your wife needs you? There are non stressful jobs, you may not have a huge income, but if you had this "small" farm you would have the ability to grow alot of what you eat. This is just my idea, and would be a dream of mine.

I wanted to add I am an animal lover to the max and butchering would be next to impossible for me. But if my kids were hungry I could do it. Also I would get chickens for eggs. I know, I worry about where this country is headed and think about stuff like this alot. We have a garden now and tomorrow I am freezing stuff out of it. A small farm would be a way we could take care of our kids and that is my top priority. An old farmhouse with a little barn on it.

[AngelinaCatHub]

This is an extremely good thread with wonderful ideas. In FL you could get about an acre for 40k. But I would say, I would love to talk to this person as I know of some things in my local (Junior Collage, Tech school), but I would like to talk to him. Unfortunately, it has to be by email for now as telco is off. (Yeah, I know, surgeon heal thyself). LOL ‘Hub

[bk4sky]

i would get a save it just about all of it, maybe spend a small amount and take myself on a trip but bottom line is i would SAVE IT!!!! i learned a good lesson about getting into debt!