It has been exactly one year after I filed Bankruptcy. It was a Chapter 7 no asset bankruptcy. I kept my house and two cars. Life is so much easier now and to think we were struggling with coming up with the bankruptcy attorney fees. It almost seems laughable now that we are start to focus on living rather than surviving. Yes, money is still tight but no where near as tight as it used to be. I think keeping some our debt helped us.
When keeping a house or vehicles you have to reafirrm the debt in order to keep your possessions. This assumes you are not too far negative and the court approves that you are able to keep it. I think I was negative by 100.00. What do I mean by negative? This means after your current bills are paid can you really afford to keep the items you want to reaffirm. I explained in my court documents that I was current on my mortgage and vehicles and had never missed a payment. I then explained how I would pay for it. The judged read my chicken scratch on the bankruptcy documents and signed off allowing me to keep the debt. You will get to keep the objects assuming you you still owe money on object in question. If you have significant equity you will have to exempt it.
During this time I have continued to pay on one house, two vehicles and a student loan. I have never been late on my mortgage because it is automatically taken out of my account regardless if the money is not there as was in the past. One of the nice things about automatic withdrawal of my house payment is that it is set up to be automatically deducted the day before it is considered late. So, instead of a house payment being due on the 1st as most bills are it is due in the middle of the month. During the first year after bankruptcy I paid off two vehicles and then both broke down. I was without a vehicle and we needed a vehicle.
I visited a couple of bankruptcy forums and read to see what everyone was doing after bankruptcy. It seemed most people were getting approved after bankruptcy without problems by companies such as capitol one and roadloans. I applied and was approved by both of these companies at a outrageous interest rate. We are talking 15-16% for an auto loan. It is just shameful how they can charge this type of interest rate. I guess it boils down to that I am still paying for my bankruptcy one way or the other. I ended up finding another finance company where I paid a similar interest rate that was ridiculous . The percentage ended up being 15%. This really depressed me. I had just paid off two vehicles and really expected a better rate.
Some of the details of the deal was I didn't put any money down. I had just had to pay large amounts to get my vehicles fixed before I decided to give up and buy and new\used vehicle. I purchased a 2006 vehicle that cost $341.00 a month. One of the nice things dealers will tell you is that you can refinance after a year to lower your rate and get a better payment. This is a bull crap story and don't believe it. MOST banks wont refinance a car. However, people that belong to credit unions often have better luck at refinancing a vehicle, therefore, if you want to take this approach you should establish a relationship with a credit union after you purchase your vehicle if you don't have an account with one.
Is filing Bankruptcy a good Decision?
I can honestly say filing bankruptcy was a good decision for me and my family. The only thing that tears me up about this is I have to wait 2 years until I am out of bankrutpcy to refinance or to buy a new home for FHA or conventional. Home prices have dropped so much it is mind blowing. There is a foreclosed house near me where they paid 105K and the house is now for sale for 25K and it is nicer than my home.
One of my hopes is that I picked the right time to file while the country is in a financial mess and I will look more appealing to other people later. However, my goal is not to rely too much on credit and to try to use cash. Credit is only worth having for financing houses or vehicles and then good credit is only worth having to get the best interest rate. I really think if you hesitant about filing bankruptcy then you need to look at your credit card statements and see how long it will take you to pay off your debt. Since the credit card reform all credit card companies are required to place how long it will take you to pay off your cards making mininum payments. If you can pay off all you debt and save for retirment in 7-10 years then you really should consider contacting a michigan bankruptcy attorney to discuss filing for bankruptcy. It may be the best thing you ever do.
April 21, 2010
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