Are we doing the right thing?

[maajick]

Hi everyone. I am glad I found this forum. I am one of those that have to research EVERYTHING online before I proceed (I mean everything, ha). And I love forums since I get to hear from REAL people!

I guess my fiance and I are the classic people who are living beyond our means. We are tired of just scraping by and not getting anywhere.

Our situation:

Engaged: I was a single mother of twin girls and he was a single father of twin boys who are disabled. We met, fell for each other and now I am mom to his boys and he is dad to my girls (kinda like the Brady Bunch). I am a stay at home mother (unable to really work due to the boys disabilities).

Monthly income between SSI for the boys and my fiance's employment is around $3500. Total monthly bills are around $3750.

Previously we were self employed selling Medicare insurance products and the first 6 months made great money (our first month's pay was $11,000). We got really excited and assumed we would be doing that forever and went and bought a brand new Nissan Armada and a brand new Nissan Titan. We no longer make that money but still have the bills as if we did.

We are currently not behind on any bills, BUT that is only because we had tax refund money sitting in the bank so that was helping cover costs the first part of this year. As of this month that money is gone and we are now freaking out as to how we are going to make it.

We do receive food stamps due to the boys receiving SSI for their disabilities so all of those bills do not even include food (yikes).

We have been down the road of being 3 months behind on all bills and pulling out of it just to get back down again.

He has wanted to file for some time, but I have always resisted thinking we could do it on our own. My 30th birthday is in June and I am going through the anxiety of becoming "old" and realizing that I have not made any progress in 10 years of just making it.

We have an appointment with an attorney this Wednesday but I am still feeling bad and wonder if this is the right thing. I feel responsible and bad because I did get myself in this mess being careless and living beyond my means.

I do also have about $50,000 in student loans which I do not have to repay right now due to receiving the food stamps.

I am hoping to receive warm wishes and comments that I am on the right path, but I want to hear the truth so send it my way even if I am wrong!!!!

Thanks.

[DeadManCrawling]

Hi,

welcome to the party!

Sure, you bear some responsibility, as do most or all of us here. You do NOT however, necessarily bear ALL the responsibility.

I (and most of us I imagine) went through similar thoughts and emotions.

Ultimately, you must do what is best for yourselves and your 4 kids. They deserve for you to make the best decision possible, as free from emotional constraints as possible. The cultural aversion to bankruptcy seems to be fading quickly, which I think is a good thing. It should ultimately lead to better lending practices.

You should give as much thought to the future well-being of your creditors as they give to yours. NONE.

Meet with your attorney for all the details and to make sur ethere are no surprises (there probably will be anyway). Read the forums and ask all the questions you can think of to prepare for that meeting.

Bankruptcy is another tool, to be used when needed, and is legal.

Why IS it that when Chrysler declares bk, or any of thousands of other companies, it is viewed as business as usual? But when it is little old us we are pretty much branded as misfits and losers of the greatest caliber?

That, I think, is the long-lasting work of the very companies who would rather you pay them huge amounts of interest for your entire life just to work under THEIR plowshare in a state of near-slavery, rather than working to better your family's situation.

Again, welcome, and a pleasure to meet you!

-DMC

[maajick]

Thanks DeadManCrawling........thank you for reminding me what is truly important......family and kids!! You are so right, creditors do not care about consumers one bit. The late fees, interest, etc. it is all such a rip off.

I have a feeling after being on this board and going through this that I will look back on this and wish I had known all the things that I am certainly going to learn throughout this process.

Thanks for the warm welcome!

[hamburgervol]

I am so thankful that we live in a country that allows us to have a process that will wipe the slate clean. I personally believe that the lending industry, in my case credit cards, has helped seal it's own fate by abusing people with their teaser rates then kicking their customers in the teeth with astronomical rates later on. I, like some many others, probably paid back the credit card companies 2 or 3 times what I actually used.

Like it's been said so many times on this forum, bankruptcy is a business decision. Take all your emotions out of it.

Just curious, do you have a lot of unsecured debt?

[maajick]

Just curious, do you have a lot of unsecured debt?

Unsecured debt: 8-10 thousand
Secured debt (Nissan Armada): 36,500

You are so correct. I have one card that I closed TWO YEARS AGO. I am still paying on it and it has almost the full balance. Between late fees and interest I have paid the balance probably 5 times over.

[maajick]

Oh and hamburgervol........Roll Tide!

[LuciluS]

Maajick:

Unless you are going to surrender the Nissan (and then, I'm not so sure) I personally wouldn't file Bankruptcy for $8,000 - $10,000 on Only ONE Credit card.

Don't know what credit card you have, but I would think you would be able to settle with the CC Card for around 20%-35% of your balance.

Just my opinion.

Luci

[Flamingo]

If that is the only unsecured debt you have, you have more of a cash flow problem since you probably have high payment vehicles (I see you purchased two new ones), you don't mention your mortgage or rent payment nor what you spend on food, utilities or other misc. items. I am getting the impression you have done what most folks do - went out and got the high end house with a big mortgage payment, high payment new vehicles and now cannot afford to make any bills due to a loss of income although your unsecured debt is low. You probably need to get rid of the car payments and ascertain whether or not you can afford your house if your are not renting. The attorney you are seeing this week will be able to give you more reality to your situation as to what you can and cannot do but you will have to learn after all this is over not to get caught up in living above your means again cause if you set the same stage and again suffer a drop in income, you now see what can happen. Make plans now to change those habits and best of luck to you!

[maajick]

You are correct as to what happened. Our house is $1,000 a month. It is my father in laws house that we are living in and paying for, no loan in our names. Cash flow is the problem as I basically mentioned in my first post. All of our bills (rent, credit cards, insurance, car, utilities, etc) are about the same as our income coming in, just barely making it. We are not behind on anything right now, but that is because we had the cushion of tax refund money that as of this month is all used up. Next month we will be behind on things. Food is not an issue since the 2 boys receive SSI and we receive food stamps.

We did buy 2 cars, but the Titan was a total loss last November due to a wreck, it was paid off by insurance and gap coverage. The Armada is our biggest problem now. It is $725 a month and is KILLING us.

The credit cards are multiple lines of store cards that are all maxed. The highest line available is $1000 and some are as low as $200. On top of that many of them had available credit but they are all being slashed and now if I happen to be one day late we are getting the applicable fees which then cause me to go over the limit and then incur even more fees.......most probably know that scenario.

As I mentioned also in my first post I think the 30 year birthday a few weeks away I will have it doing something to me, ha. I totally realize that we were living beyond our means and I no longer want to live the rest of my life like that. I want to be able to take the kids on vacation and do things besides live beyond my means trying to pay for a brand new SUV, etc. The house is not an issue, since we are basically renting and with 4 kids we can not move into anything smaller and even though we could maybe find another house to rent they would all be around the same price range.

If I could work our problems would not be as bad, but the reality of having a child with Cerebral Palsy who does not walk and is still fed through a feeding tube at 6 yrs. of age means that we will probably always be a one income family.

[jb300]

Do you have any way to make income from home? I understand the situation with your kids and I agree the best place for you to be is at home. If you could find a job you could do from home when your fiancee is there to help with the kids that might help you until you can get rid of some of the high payments.

I know it isn't ideal but it might be a thought.