Hi everyone, I'm a long time lurker here and decided I would jump in and tell you my 2020 bankruptcy story. I've posted on the FICO forum, so if you read there some of my story may sound familiar. My journey started in January 2020 where my credit cards were heading to be maxed out with minimums way more than I could fathom every month. I also was paying on a personal loan I took out 3 years ago. All in all my minimum payments for 8 credit cards and the loan was $2400. All the meanwhile I was paying for everything on those credit cards and I knew the cycle was never going to end. I was kind of put into the situation after being diagnosed with a potential terminal disease and as Tim McGraw said "live like you are dieing". Yeah I did that and horribly regretted it when I realized I could still have many good years to live and nothing is a given. Now how do I get out of this! Looking at my finances there was no way I could do it without getting a second job in which I think would have killed my body. So I do some research and I think I'm the right candidate for a Chapter 7 bankruptcy.
February 2020. I had a phone consultation with a local bankruptcy attorney, who actually charged me $100 for this consultation. He was to be one of the best in the area. Ok then! We go over my debts and he asks me for last year's tax return reported income. I give him that, I'm a candidate for a chapter 7. Awesome. I spend a weekend getting all my documents together and submit them all to the paralegal. Before you know it..it's COVID time and they closed their office and accepted no phone calls.
Crickets till April. Meanwhile through all of this I'm reading about lawyers handing petitions while still shut down. BUT I'll stay the course and continue this crazy cycle until they open back up. Finally I hear back from the paralegal, write them a $2300 check, and here we go! Until that day I get a phone call from the attorney saying "You make too much, sorry, you don't qualify!" In a very rude tone at that. It was then I realize I picked the wrong lawyer. He goes to explain that my main income isn't the problem, it's my self income that puts me over the means test. I brought up that you said I was good, what gives? I'm dejected, accept I'm stuck, and forget about it! But on my tax return I'm able to use my expenses to bring down my income. You can't do that with Chapter 7? According to that lawyer or his ears were clogged, no. He out of courtesy did return my retainer check.
It was about mid-June. At this point I took out a $8000 loan from my 401k as a band aid to maybe figure this all out. I got to thinking and started emailing several new bankruptcy attorney's about my case. At this point I had did my research and found out YOU CAN use your expenses to drop your income in which would pass the means test. I'm bouncing this off a few people, many who just wanted me to get a retainer for them to even considering working on my case. So I decided to email back the attorney who shot me down. I got a very RUDE email back "SIR I already told you I can't help you, please find another counsel". Wow! So back to Google!
At the beginning of July I find another attorney with good reviews, although about an hour from home. I call them up, get the assistant lawyer who says yup, sounds like you do qualify after explaining my expenses to my side business. A week later I write another $2300 check and off we go! I submitted all my info and after a few questions from the paralegal, my Chapter 7 petition was ready to go. I went in a week later, met with the attorney who assured me my petition looks totally normal and there should be no issues. The only downfall is that this law firm only files bankruptcy petitions at the end of the month. So I was FINALLY filed August 27th and my MOC was scheduled for 10/21.
What I did learn is and my advice to anyone consider filing is be sure to fully interview your potential attorney. In all my madness I also had done some online gambling in which he wanted to use winnings also added to my income to further worsen my situation! At the end of the day I had enough losses to cancel that out which several future attorney's agreed that is how I should proceed. He also was judging me because of the gambling and ultimately I had quit that and was there for help.
I'm SUPER excited for the MOC in 2 weeks and ready to turn this page. My bankruptcy should be discharged right before Christmas, what a Christmas gift this will be! Since the day I filed I've never slept better. Don't think you failed, this is going to allow me to live my best life without being anchored down by the ChaseBOADiscover's of the world. I definitely will update if anything else exciting happens in my case, but I surely hope not!
February 2020. I had a phone consultation with a local bankruptcy attorney, who actually charged me $100 for this consultation. He was to be one of the best in the area. Ok then! We go over my debts and he asks me for last year's tax return reported income. I give him that, I'm a candidate for a chapter 7. Awesome. I spend a weekend getting all my documents together and submit them all to the paralegal. Before you know it..it's COVID time and they closed their office and accepted no phone calls.
Crickets till April. Meanwhile through all of this I'm reading about lawyers handing petitions while still shut down. BUT I'll stay the course and continue this crazy cycle until they open back up. Finally I hear back from the paralegal, write them a $2300 check, and here we go! Until that day I get a phone call from the attorney saying "You make too much, sorry, you don't qualify!" In a very rude tone at that. It was then I realize I picked the wrong lawyer. He goes to explain that my main income isn't the problem, it's my self income that puts me over the means test. I brought up that you said I was good, what gives? I'm dejected, accept I'm stuck, and forget about it! But on my tax return I'm able to use my expenses to bring down my income. You can't do that with Chapter 7? According to that lawyer or his ears were clogged, no. He out of courtesy did return my retainer check.
It was about mid-June. At this point I took out a $8000 loan from my 401k as a band aid to maybe figure this all out. I got to thinking and started emailing several new bankruptcy attorney's about my case. At this point I had did my research and found out YOU CAN use your expenses to drop your income in which would pass the means test. I'm bouncing this off a few people, many who just wanted me to get a retainer for them to even considering working on my case. So I decided to email back the attorney who shot me down. I got a very RUDE email back "SIR I already told you I can't help you, please find another counsel". Wow! So back to Google!
At the beginning of July I find another attorney with good reviews, although about an hour from home. I call them up, get the assistant lawyer who says yup, sounds like you do qualify after explaining my expenses to my side business. A week later I write another $2300 check and off we go! I submitted all my info and after a few questions from the paralegal, my Chapter 7 petition was ready to go. I went in a week later, met with the attorney who assured me my petition looks totally normal and there should be no issues. The only downfall is that this law firm only files bankruptcy petitions at the end of the month. So I was FINALLY filed August 27th and my MOC was scheduled for 10/21.
What I did learn is and my advice to anyone consider filing is be sure to fully interview your potential attorney. In all my madness I also had done some online gambling in which he wanted to use winnings also added to my income to further worsen my situation! At the end of the day I had enough losses to cancel that out which several future attorney's agreed that is how I should proceed. He also was judging me because of the gambling and ultimately I had quit that and was there for help.
I'm SUPER excited for the MOC in 2 weeks and ready to turn this page. My bankruptcy should be discharged right before Christmas, what a Christmas gift this will be! Since the day I filed I've never slept better. Don't think you failed, this is going to allow me to live my best life without being anchored down by the ChaseBOADiscover's of the world. I definitely will update if anything else exciting happens in my case, but I surely hope not!
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