It's been almost three years since we were discharged. Adjusting to living on a cash basis has been difficult, but it is the smart way to go, for sure. We have slowly been repairing our credit, though. One year and two years are the marks to meet in order to be 'eligible' for much of any credit. Our bank, for instance, required that we be have at least a year between us and the discharge before we apply for any sort of credit. Other credit outlets seem to look at you more favorably after the two-year mark. I know what you're thinking! They just got out of bankruptcy, so why the talk about applying for credit!? I agree, it sounds crazy, but there are certain situations that come along and you find yourself stuck and in need of help. Especially still this close to discharge, which hasn't allowed much time to save amidst other financial emergencies. Dave Ramsey always mentions Murphy's Law, and he couldn't be more correct - more recently, the day after we built our emergency fund back up, a car repair popped the fund and depleted everything. We are still trying to build the emergency fund back up.
We probably haven't gone about this bankruptcy recovery thing correctly, but we are managing as best we know how. With a family as large as ours, the expenses are never-ending, so opportunities to save seem so few and far between. And some credit decisions were made in haste, or without proper regard for the bankruptcy recovery. For instance, a purely elective medical procedure that wasn't 100% necessary, but was something that had been on the table for MANY years. Instead of saving, it was financed over a certain amount of months. And there are two credit cards that were applied for just out of curiosity to see if the answer would be YES or NO. The shock came when the answer was YES. Those cards are unused 95% of the time, and primarily have zero balances, since they are retailer cards (think clothes and very small credit limits) rather than general VISA, MASTERCARD, DISCOVER, etc, with which you can buy anything and everything (and get yourself into a load of financial trouble).
My main point here in talking about credit is that all hope is not lost after bankruptcy! You do not have to live a destitute life forever... in my experience, it is the first two years that are the most difficult, because you truly have no resources except yourself. It is all cash the first two years, so having emergency funds is imperative. Once you can get past the first two years, the belt loosens and you can breathe.
But, I accept that any reliance on credit is not a healthy standpoint for someone coming out of bankruptcy. We are well aware of the dangers, and know that is not a road we want to travel ever again. Bankruptcy recovery has been difficult enough!
In the same way that a life of debt was somewhat suffocating and stifling, a life lived on a cash basis is equally as constricting. The main difference is that it is easier to deal with living WITHIN your means than to deal with living BEYOND your means. Not knowing how you are going to pay your debts is entirely different than knowing you have to be extra frugal because you don't have any other choice.
Saturday, August 31, 2013
Monday, July 25, 2011
July 2011 Update
It's been about 9 months since our case was discharged and I really have no good Bankruptcy news or drama. Things have been smooth and easy, thank goodness...
We were able to refinance our mortgage a few months ago, which was a huge relief. But, I must say, we have sort of a special circumstance that didn't factor in the Bankruptcy - if it wasn't for the fact that we have a VA (Veteran's Affairs) guaranteed mortgage, we may not have been able to refinance this close to Bankruptcy. Luckily, with VA guaranteed mortgages, you need no income verification, no appraisal, and no in-depth credit checks. The only thing the lender cares about is that you've been on time with your payments for the last 1-2 years. So, as a result of the refinance, we are saving about $300 per month, which helps out a lot these days.
With the breathing room we gained since 2009 (when we originally filed the Bankruptcy petition), we've actually been able to start following Dave Ramsey's Baby Steps (we tried before the bankruptcy and it was what led us to the Bankruptcy decision). If you're familiar with Dave Ramsey's Baby Steps, you'll recognize that Baby Step #2 - the debt-snowball - was essentially accomplished through the Bankruptcy, but it's still been a challenge putting forth the effort to change our habits and save up for Baby Step #1 - The $1,000 Emergency fund! We still have a lot of progress to make and it seems like Murphy's Law truly does kick in just when you feel like you're making progress...Recently, we've had to buy two sets of brand-new tires and repair one of our vehicles.
Oh yes, I did forget - we did accomplish part of Baby Step #1 on our own - we have paid off other debts that were not covered in the Bankruptcy. It felt very good to pay off not one, not two, but THREE of our student loans! One more remains, but considering it's in the $30,000 range, we'll take our time and not stretch ourselves too thin trying to pay it off, though it will feel nice when we do!
All in all, things are going well. Like I said, we still have some work to do to change our personal saving and spending habits, but it is nice to have that wiggle room, instead of feeling pushed against the wall every single payday. It feels good to be on a 100% cash basis.
We were able to refinance our mortgage a few months ago, which was a huge relief. But, I must say, we have sort of a special circumstance that didn't factor in the Bankruptcy - if it wasn't for the fact that we have a VA (Veteran's Affairs) guaranteed mortgage, we may not have been able to refinance this close to Bankruptcy. Luckily, with VA guaranteed mortgages, you need no income verification, no appraisal, and no in-depth credit checks. The only thing the lender cares about is that you've been on time with your payments for the last 1-2 years. So, as a result of the refinance, we are saving about $300 per month, which helps out a lot these days.
With the breathing room we gained since 2009 (when we originally filed the Bankruptcy petition), we've actually been able to start following Dave Ramsey's Baby Steps (we tried before the bankruptcy and it was what led us to the Bankruptcy decision). If you're familiar with Dave Ramsey's Baby Steps, you'll recognize that Baby Step #2 - the debt-snowball - was essentially accomplished through the Bankruptcy, but it's still been a challenge putting forth the effort to change our habits and save up for Baby Step #1 - The $1,000 Emergency fund! We still have a lot of progress to make and it seems like Murphy's Law truly does kick in just when you feel like you're making progress...Recently, we've had to buy two sets of brand-new tires and repair one of our vehicles.
Oh yes, I did forget - we did accomplish part of Baby Step #1 on our own - we have paid off other debts that were not covered in the Bankruptcy. It felt very good to pay off not one, not two, but THREE of our student loans! One more remains, but considering it's in the $30,000 range, we'll take our time and not stretch ourselves too thin trying to pay it off, though it will feel nice when we do!
All in all, things are going well. Like I said, we still have some work to do to change our personal saving and spending habits, but it is nice to have that wiggle room, instead of feeling pushed against the wall every single payday. It feels good to be on a 100% cash basis.
Tuesday, January 4, 2011
Post-Discharge Update
I have been so horrible at making regular updates that I can't remember when I wrote last, or, for that matter, what I wrote about. I could go back and check, but I just feel like writing as it comes to me...
I have a confession. This Bankruptcy thing hasn't been as emotional as I thought it was going to be. I imagined a drag-me-through-the-mud process where I felt like a complete loser and a worthless human being. Maybe it's because there has been so much other stuff going on - in our life, in the world, in politics, with the environment - that Bankruptcy is really nickels and dimes in the grand scheme of things.
So, our case was finally discharged about two or so months ago - a process that took about 15 months, maybe a smidgen longer. We have had a few events happen since the discharge that makes it feel as if we never declared Bankruptcy and are back to paying all of those debts. Every. Single. Month. It's almost like a nightmare, really. Even though the Bankruptcy is final and discharged, we are still a few paychecks away from being the next foreclosure victim. Each month the decision is not when to make the mortgage payment, but if we should, since that money would do well applied toward the many escalating costs we've had. Yes, it's almost that bad. Still!
On the amusing front of being discharged, we have begun getting mailings from local car dealerships that apparently 'specialize' in helping people just like us get into the car of their dreams! Some of the letters are even hand-written for a more sympathetic feel, even though the letter was photocopied and mass-mailed. I'm taking a wild guess here, but it would seem they are the 'ambulance chasers' of the Bankruptcy world. I used to work at personal injury law firm that made quite a living off of ambulance chasing, so I'd imagine there's money to be made from public Bankruptcy records as well. Scary. Our information is out there for anyone to see. I wonder just how much of our Bankruptcy case is public, or if it's just a list of recently discharged cases, complete with address information.
I have a confession. This Bankruptcy thing hasn't been as emotional as I thought it was going to be. I imagined a drag-me-through-the-mud process where I felt like a complete loser and a worthless human being. Maybe it's because there has been so much other stuff going on - in our life, in the world, in politics, with the environment - that Bankruptcy is really nickels and dimes in the grand scheme of things.
So, our case was finally discharged about two or so months ago - a process that took about 15 months, maybe a smidgen longer. We have had a few events happen since the discharge that makes it feel as if we never declared Bankruptcy and are back to paying all of those debts. Every. Single. Month. It's almost like a nightmare, really. Even though the Bankruptcy is final and discharged, we are still a few paychecks away from being the next foreclosure victim. Each month the decision is not when to make the mortgage payment, but if we should, since that money would do well applied toward the many escalating costs we've had. Yes, it's almost that bad. Still!
On the amusing front of being discharged, we have begun getting mailings from local car dealerships that apparently 'specialize' in helping people just like us get into the car of their dreams! Some of the letters are even hand-written for a more sympathetic feel, even though the letter was photocopied and mass-mailed. I'm taking a wild guess here, but it would seem they are the 'ambulance chasers' of the Bankruptcy world. I used to work at personal injury law firm that made quite a living off of ambulance chasing, so I'd imagine there's money to be made from public Bankruptcy records as well. Scary. Our information is out there for anyone to see. I wonder just how much of our Bankruptcy case is public, or if it's just a list of recently discharged cases, complete with address information.
Monday, September 20, 2010
Getting Closer!
We mailed off our final Plan Payment! It's really the smaller, final payment that is due the 1st of October, but since we're so close to the end, we wanted to go ahead and get it out of the way. Once the Trustee receives and cashes the payment, we wait for them to send the necessary paperwork/notification to the U.S. Bankruptcy Court. Once everything checks out, we will receive confirmation that our case has been discharged. The paralegal said it's usually about 2 weeks from the day the Trustee receives our payment, so I'm hoping no later than the middle of October!
So close...
So close...
Friday, August 20, 2010
August Update
Okay, so last month I called the paralegal to get an idea as to how much longer we have left on our plan. She said we didn't have too much longer, but it wasn't the $12 I was expecting. She also said something along the lines that the Chapter 13 Trustee charges his own fee - "He doesn't handle these cases for free," was what I came away with. I asked her to send a statement of our payments so I could get a better idea.
Not easy to read. At all. The Chapter 13 Trustee's fee is not clearly stated, and it doesn't help that there have been two random payments sent to him in the almost 12 months we've been paying. Not a monthly % or a stated flat %. So how much ARE we paying him, exactly? I still don't know and the paralegal didn't know either. Better yet, who informed us that we'd even be paying a Chapter 13 Trustee fee? I have looked over our paperwork and I cannot find where we were informed that this would be coming down the tube. Not that I'm saying the Trustee doesn't deserve to be paid for his services - he will be paid - my main objection is that I do not recall ever being informed of this aspect of our Payment Plan. It just sort of came as a surprise. Obviously, since I thought we were down to $12. In reality, it was more like $512.
It's only a few more months, but not what I was expecting. So, we'll be around here for a bit longer. Waiting... to see how this all ends.
Not easy to read. At all. The Chapter 13 Trustee's fee is not clearly stated, and it doesn't help that there have been two random payments sent to him in the almost 12 months we've been paying. Not a monthly % or a stated flat %. So how much ARE we paying him, exactly? I still don't know and the paralegal didn't know either. Better yet, who informed us that we'd even be paying a Chapter 13 Trustee fee? I have looked over our paperwork and I cannot find where we were informed that this would be coming down the tube. Not that I'm saying the Trustee doesn't deserve to be paid for his services - he will be paid - my main objection is that I do not recall ever being informed of this aspect of our Payment Plan. It just sort of came as a surprise. Obviously, since I thought we were down to $12. In reality, it was more like $512.
It's only a few more months, but not what I was expecting. So, we'll be around here for a bit longer. Waiting... to see how this all ends.
Thursday, July 8, 2010
Our Plan Has Been Confirmed!
I know on my last post, I discussed that we found out the case was confirmed... apparently, the Trustee sends one letter to let us know what is in store for our case, and the US Bankruptcy Court sends another letter making it official? I'm not exactly sure what the whole process is, but we got a second confirmation letter, except this one came from the US Bankruptcy Court. Almost a whole year after filing, and our plan is just now being officially confirmed, which basically means we are THISCLOSE to being done and fully discharged. If my calculations are correct, our remaining balance is $12 and August 1st will be our final Bankruptcy payment.
I know I'd mentioned that we were going to pay the plan off early, but we decided against it, for several reasons. Most importantly, as is always the case, LIFE got in the way and that 'extra' tax-refund money had to go to other, more important things.
But anyway, I'm going to e-mail our paralegal (we'll see how far that gets me - I never did receive an adequate response to my last e-mail) just to make sure we only owe $12.
Here's hoping!
I know I'd mentioned that we were going to pay the plan off early, but we decided against it, for several reasons. Most importantly, as is always the case, LIFE got in the way and that 'extra' tax-refund money had to go to other, more important things.
But anyway, I'm going to e-mail our paralegal (we'll see how far that gets me - I never did receive an adequate response to my last e-mail) just to make sure we only owe $12.
Here's hoping!
Sunday, March 21, 2010
Getting Somewhere!
Ok, so we did get a letter of Plan Confirmation from the Trustee, but there was some confusing info pertaining to the amount we've already paid toward the plan. The letter stated $0 had been paid, but that couldn't be correct, else our case would have been dismissed a long time ago.
I sent an e-mail to the paralegal and addressed my concerns:
Okay, so how much do we really owe? When we last heard from the paralegal, she said we were all paid and our case would be ready for discharge. We went around and around for a few days and finally, on Friday, I called because we got a letter in the mail stating there was a hearing scheduled for the Plan Confirmation with very short notice, and I needed to speak with someone to make sure we did not have to be there. She told us we didn't need to go to the hearing. While I had her on the phone, I asked about our account balance, and we finally got the information we were looking for.
We are not all paid, but that's fine. It was kind of surprising to us that we could have been all paid, so we didn't immediately get our hopes up. Technically, we still have 6 more plan payments, but now that the plan has been confirmed, we are free to make a lump sum of the remaining balance. And that is what we will do. When the next plan payment is due, we will make a payment in full and then we will be on the way to discharge!
If all goes as planned, the next post should be something about the case being closer to discharge.
I sent an e-mail to the paralegal and addressed my concerns:
We received Confirmation papers from the trustee, but some of the language leaves us with questions.She e-mailed back:
*It would appear the Trustee is saying that $0 has been paid on our Plan
*There was also something in reference to $#### for attorney's fees and $#### for filing fees or something of that nature - I do not have the papers with me at the moment, so I'm probably not relaying my concerns 100% clearly - we thought our Payment Plan covered both of these costs.
*You left us a message prior to receiving the confirmation papers and you said we were all paid.
Can you help to explain some of the above concerns, and also give us an idea as to where we stand at this point in time? How many more Plan Payments do we have?
Everything is fine. It is just a standard letter confirming the terms. You are correct attorney fees are going to be paid through the plan. That is a good thing that the case is confirmed. Nothing for you to do. Just put to file.
Okay, so how much do we really owe? When we last heard from the paralegal, she said we were all paid and our case would be ready for discharge. We went around and around for a few days and finally, on Friday, I called because we got a letter in the mail stating there was a hearing scheduled for the Plan Confirmation with very short notice, and I needed to speak with someone to make sure we did not have to be there. She told us we didn't need to go to the hearing. While I had her on the phone, I asked about our account balance, and we finally got the information we were looking for.
We are not all paid, but that's fine. It was kind of surprising to us that we could have been all paid, so we didn't immediately get our hopes up. Technically, we still have 6 more plan payments, but now that the plan has been confirmed, we are free to make a lump sum of the remaining balance. And that is what we will do. When the next plan payment is due, we will make a payment in full and then we will be on the way to discharge!
If all goes as planned, the next post should be something about the case being closer to discharge.
Thursday, March 11, 2010
March Update
So, it's been several weeks since we've received any documentation from the Trustee and we were starting to get a little bit worried. No news is usually good news, right? We were hoping so, at least. Last we heard, they had dropped the motion to dismiss, but we hadn't heard anything in regard to the Trustee confirming our payment plan, which we thought was supposed to be the next step in the process.
Mr. America contacted the paralegal - a different one, again. This makes Paralegal #3 that has worked on our case, and the second time we were given no notification that, should we need to contact someone, the contact info had changed. I can't say for certain how I feel about the customer service/client relations we've received, but as long as we don't run into any more issues, I won't do much complaining. But, we probably won't use them for Bankruptcy representation in the future. ;-)
But, where was I? Oh yes, the paralegal didn't show anything in the file concerning confirmation of the plan, so she said she'd contact the Trustee and call us back with any information. Mr. America got a voicemail from the paralegal yesterday and she said the Trustee has confirmed the plan and will be sending out a letter this week. And she also said that we have already fulfilled our payment plan, so once the confirmation letter has been received, they can file the official Bankruptcy Discharge! That means we will be done!
Of course, I'm not getting my hopes up (yeah, right!), because I know anything can happen, but if all goes well, we should be done with all of this Bankruptcy business by the end of March. Wow. Officially Done? I'll believe it when I see it... We have so many plans!
Mr. America contacted the paralegal - a different one, again. This makes Paralegal #3 that has worked on our case, and the second time we were given no notification that, should we need to contact someone, the contact info had changed. I can't say for certain how I feel about the customer service/client relations we've received, but as long as we don't run into any more issues, I won't do much complaining. But, we probably won't use them for Bankruptcy representation in the future. ;-)
But, where was I? Oh yes, the paralegal didn't show anything in the file concerning confirmation of the plan, so she said she'd contact the Trustee and call us back with any information. Mr. America got a voicemail from the paralegal yesterday and she said the Trustee has confirmed the plan and will be sending out a letter this week. And she also said that we have already fulfilled our payment plan, so once the confirmation letter has been received, they can file the official Bankruptcy Discharge! That means we will be done!
Of course, I'm not getting my hopes up (yeah, right!), because I know anything can happen, but if all goes well, we should be done with all of this Bankruptcy business by the end of March. Wow. Officially Done? I'll believe it when I see it... We have so many plans!
Thursday, January 28, 2010
Finally Some Progress
We're still here. Still dealing with the Bankruptcy! I've said it once and I'll say it again: I NEVER THOUGHT IT WOULD TAKE THIS LONG
A few months ago, we got a letter from the Chapter 13 Trustee stating that he was making a motion to dismiss our case based on some of the information in our filing. The attorney had us come in the sign an affidavit in regard to the motion to dismiss and he assured us we had nothing to worry about - it was just the Trustee's last-ditch effort. Mind games, I say. A test to see if we'd give up.
We waited to hear something. And waited. And waited.
Then, we got another letter from the Trustee and it was the same thing: A motion to dismiss our case based on the same information and we were requested to appear in court. Very frustrating. We met with the attorney again and he said he didn't understand why the Trustee was pressing the issue on something so small, but assured us it wasn't big enough to jeopardize our Bankruptcy. He said the affidavit was very clear and we did not need to go to court - it would be straightened out.
The court date was fast approaching and we hadn't heard anything. Then, the Friday before the court date, we got a letter in the mail from the Trustee stating that the motion to dismiss had been withdrawn! Whew.
Now, we wait again, but for what, I'm not exactly sure. We're just happy all that dismissal mess is done and over. We can move forward on this whole process instead of feeling like we're standing still, spinning our wheels, getting nowhere.
The end is closer!
A few months ago, we got a letter from the Chapter 13 Trustee stating that he was making a motion to dismiss our case based on some of the information in our filing. The attorney had us come in the sign an affidavit in regard to the motion to dismiss and he assured us we had nothing to worry about - it was just the Trustee's last-ditch effort. Mind games, I say. A test to see if we'd give up.
We waited to hear something. And waited. And waited.
Then, we got another letter from the Trustee and it was the same thing: A motion to dismiss our case based on the same information and we were requested to appear in court. Very frustrating. We met with the attorney again and he said he didn't understand why the Trustee was pressing the issue on something so small, but assured us it wasn't big enough to jeopardize our Bankruptcy. He said the affidavit was very clear and we did not need to go to court - it would be straightened out.
The court date was fast approaching and we hadn't heard anything. Then, the Friday before the court date, we got a letter in the mail from the Trustee stating that the motion to dismiss had been withdrawn! Whew.
Now, we wait again, but for what, I'm not exactly sure. We're just happy all that dismissal mess is done and over. We can move forward on this whole process instead of feeling like we're standing still, spinning our wheels, getting nowhere.
The end is closer!
Wednesday, November 25, 2009
Still Waiting
We're still here, and still going through a Bankruptcy. I think I knew Bankruptcy wasn't quick by any means, but I don't think I was expecting it to take this long!
The last time I wrote, we had attended the 341 Meeting (meeting of the creditors). It was basically our opportunity to sit down with the Trustee and go over filing and our proposed payment plan. After which, the Trustee would confirm the plan, as long as there were no disputes from our creditors and as long as the Trustee thought it was a satisfactory payment plan. The Trustee said most everything looked fine. He had a few questions, but in the end, said our proposed payment plan seemed adequate and that no adjustments were necessary at that time.
Well, imagine our surprise when we got a letter in the mail about a month ago saying that the Trustee wanted to dismiss our case! Apparently, he did not agree to some of the items and that we had to amend our filing, and it wasn't even in reference to the rental property we were worried about after the 341 Meeting - it was something entirely different. What in the world? Isn't this why we hired a Bankruptcy attorney????? So we don't run into these types of snags?!?!
We notified our attorney and they told us it was the Trustee's last-ditch effort to 'spook' us into backing out of Bankruptcy. They informed us our paperwork is correct as filed and all we needed to do was sign an affidavit and the problem was solved. Who would have thought the Trustee would try and use mind games to manipulate us? Of course, it's all new territory, so we don't really know *what* to expect, but it definitely wasn't that!
At this point, we are just waiting on the Confirmation papers from the Trustee, which will let us know the Trustee has finally approved our proposed payment plan and then we will be getting closer to the end. If all goes well, it will likely be another year or so before our case is completely discharged, but a plan Confirmation will take away some of our lingering doubt about this entire process. Almost four months after we first filed our papers and we're still in limbo! Now we know that Bankruptcy is not a short process.
***
Oh, and we did eventually get an answer about the extra payment the Trustee sent to the bank for payment on our vehicle. It was sent in error and the bank wound up sending the money back to the Trustee.
The last time I wrote, we had attended the 341 Meeting (meeting of the creditors). It was basically our opportunity to sit down with the Trustee and go over filing and our proposed payment plan. After which, the Trustee would confirm the plan, as long as there were no disputes from our creditors and as long as the Trustee thought it was a satisfactory payment plan. The Trustee said most everything looked fine. He had a few questions, but in the end, said our proposed payment plan seemed adequate and that no adjustments were necessary at that time.
Well, imagine our surprise when we got a letter in the mail about a month ago saying that the Trustee wanted to dismiss our case! Apparently, he did not agree to some of the items and that we had to amend our filing, and it wasn't even in reference to the rental property we were worried about after the 341 Meeting - it was something entirely different. What in the world? Isn't this why we hired a Bankruptcy attorney????? So we don't run into these types of snags?!?!
We notified our attorney and they told us it was the Trustee's last-ditch effort to 'spook' us into backing out of Bankruptcy. They informed us our paperwork is correct as filed and all we needed to do was sign an affidavit and the problem was solved. Who would have thought the Trustee would try and use mind games to manipulate us? Of course, it's all new territory, so we don't really know *what* to expect, but it definitely wasn't that!
At this point, we are just waiting on the Confirmation papers from the Trustee, which will let us know the Trustee has finally approved our proposed payment plan and then we will be getting closer to the end. If all goes well, it will likely be another year or so before our case is completely discharged, but a plan Confirmation will take away some of our lingering doubt about this entire process. Almost four months after we first filed our papers and we're still in limbo! Now we know that Bankruptcy is not a short process.
***
Oh, and we did eventually get an answer about the extra payment the Trustee sent to the bank for payment on our vehicle. It was sent in error and the bank wound up sending the money back to the Trustee.
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