Michigan Bankruptcy

One Year after Filing Bankruptcy-Buying a Car

2010-04-21T13:53:00.003-04:00

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.

Credit Cards for Business Travel after Bankruptcy

2009-09-09T12:46:00.001-04:00

Credit Card for Business Travel

After Bankruptcy I needed a Credit card for Business travel. Yes, I have a debit card that I could use. However, right after my bankruptcy discharge I had to travel for work for a week I used my debit card. This “was” fine because the hotel costs were already covered by my work. However, when I arrived to the hotel they put $250.00 hold on my account until after I checked out. They of course would deduct any hotel charges I had and release the hold on 250.

They wanted to make sure I had enough to cover any costs for my hotel room. You know, just incase I wanted to order some burgers, wine, porn movies etc. I still don’t make that much money that I am free and clear to just have them put a hold on my account for “possible’ charges that ‘may occur. I filed in Nov had my 341 in January and had just had my discharge when I had to travel.

After my credit less experience I wanted to get another credit card for business travel. I would just use it to pay for all my travel expenses and be reimbursed to pay off my credit card. I just filed bankruptcy and really have no desire to own a credit card. However, reality is if you are in business and periodically travel you should have a credit card. I could ask my company for an Amex card but I am too paranoid I would be declined. I wonder what questions would arise if I was denied the amex card. It’s not like I told everyone I was claiming bankruptcy.

My first thought was I need to check my credit report or more specifically check my FICO score before applying for a credit card. If it was really low I would not apply and just wait. I was wondering what my score would be. I ended up reaffirming two vehicles, house and was still paying on school loans. I actually should have some positive credit history right out of Bankruptcy. Still, I really wondered what kind of havoc my credit scored suffered after bankruptcy. The sick thing is FICO score does not define who you are but if you want to save money and qualify for loans you better have a decent score.

I finally pulled my FICO score for one of the reporting agencies and my FICO was 633. I was actually surprised it was this high. I really had figured it would be low 500’s. So, this eased my thought on applying for a credit card. I would now start my search online for credit cards after bankruptcy and see if I could read any success stories of people qualifying for credit cards after BK. I found several people talking about Orchard bank and Capitol 1. People seemed to be have success on obtaining credit card through Capitol one after they had claimed bankruptcy. I even read someone BK’d Capitol One and applied for a credit card 6 months later and was approved. I figured I would apply for the Capitol One Credit and see if I qualified.

I did have some apprehensions about applying to Capitol One because my wife had them and they seem to charge several fees and try to work the charges so you have very little credit available when you start using them. I figured I would receive a low credit limit with an annual fee. I really despise annual fees. So I was prepared to have a card with an annual fee, low credit limit and a high annual percentage rate. I went online and did a quick credit application and what do you know I was instantly approved with a $500.00 credit line and 0% interest for 6months. I did have to pay a 29.00 annual fee. That seemed too simple right out of bankruptcy to get a credit card. This actually bothered me qualifying for a credit card 3 months after the discharge of my bankruptcy or nine months after filing. I suppose it was most likely my on time payments for 8 months after reaffirming my vehicles and home.

I received my card in about 7 days and went to activate the card. So, upon verification of all the information I submitted my card was activated at 24%. Yikes, 24% for a credit card. It’s robbery I guess I have to keep on paying for filing for awhile. I was happy to find out that when I activated my card Capitol One has what they call a “Credit Steps” program where if you do the following you can get a credit increase. You need to:

1) Use your card in the first 30-60 days.

2) Make 3 consecutive on time payments

3) Not go over your credit limit

I did read about the program on other sites and I guess I can expect an increase to 1,000.00 then to $1,500.00 I figured if I can increase my limit I will try to qualify for another credit card later at some other point. I would like to get one with a decent credit limit (4K-5K) and then cancel my other credit card. My next question is can I qualify for a car loan right now; my cars will be paid off early next year. I am sure if I can qualify for a credit card after my bankruptcy in Michigan even if it was only for business travel.

Why file Chapter 13 Bankruptcy

2009-05-02T10:19:00.005-04:00

Why should you file Chapter 13 Bankruptcy in Michigan? It is a good idea if you have so much credit card debt and you don't qualify for chapter 7 bankruptcy. One of the drawbacks is the cost of chapter 13 bankruptcies or the ability to refinance during a chapter 13 bankruptcies.

Chapter 13 bankruptcy law is at times referred to as reorganization bankruptcy. It’s uniquely different than Chapter 7 bankruptcy. In a Chapter 7 bankruptcy virtually all of your debts are extinguished. But, you must give up any belongings that aren’t exempt from seizure by your creditors. Under Chapter 13 bankruptcy law, you don’t have to forfeit any worldly property. But, you’re expected to utilize your income to pay off some or all of what you owe your creditors. Your payments to creditors are made over time, usually from three to five years. The time parameter hinges on the amount of your debts and income.

People sometimes find it necessary to file bankruptcy again. The good news is you can file again; the bad news is you may want to wait a while. Under the new bankruptcy law, you can file a Chapter 7 bankruptcy eight years after you initially filed for Chapter 7.. You must wait four years to file for Chapter 13 bankruptcy again.

You can actually file for Chapter 13 even before the 4 year limit, but in this case you’ll have to pay back 100% of your debt over time. While this might not sound like an appealing option, it may be a useful approach for people attempting to save their home from foreclosure.

When Should You File

Whether to file bankruptcy is a personal decision that shouldn’t be taken lightly. Should you decide to file bankruptcy you should be aware of the effects. Here are some things to consider as you evaluate your financial situation. You might file bankruptcy if:

You wouldn’t be able to repay your debt within five years.

You don’t have many assets or savings.
Your wages are being garnished.
You’ve had repossession.
One or more of your debt payments are more than 30 days past due.

Chapter 13 bankruptcy allows you to keep your assets in exchange for setting up a repayment plan. An individual can file once every two years and the bankruptcy will appear on a credit report for 10 years.

Filing for bankruptcy will make loans more costly and may make unsecured loans impossible to obtain. Qualified retirement plan assets, such as 401(k)s, are protected under all bankruptcy filings, and assets of up to $1 million in IRAs are also protected.

In the end if you want to keep most all of your stuff you will file a chapter 13 Bankrutpcy. However, you work starts before you file by finding the right Michigan Bankruptcy Attorney. Fortunately for me when I filed Bankruptcy in Lansing I had done my research and met with several attorneys before I decided which one I would use. It was a pain but my attorney made me look at all aspects of bankruptcy before filing and this included an analysis of filing Chapter 13.

341 meeting

2009-01-24T17:17:00.004-05:00

Having your 341 bankruptcy hearing also known as the meeting of the creditors is a clear sign you are well on your way to starting to resolve your debt issues. If you have an excellent bankruptcy attorney you should not have any issues or surprises when you attend your 341 hearing. Depending on your debt and your case you could have creditors show up at your meeting. If they show up it is because they have an objection to discharging the debt. This is the kind of thing where you just transferred a large amount of debt from one card to another. Or if you decided to purchase something large with the past 3-6 months. They could have a case, I highly doubt the would suceed. If so, you would have known about it before this meeting.

This meeting is where you most are meeting the trustee. Deciding to file bankruptcy was most likely tuff decision. However, you're starting to hit the home stretch when you are notified of your of the date you and your bankruptcy attorney need to appear in court. Yes, it is stressful, however if you were truthful in filling out all of your paperwork things should go smooth.
It is common for for these Bankruptcy hearings or 341 meetings to last only 5-10 minutes. If you get their a half hour early you should be able to sit through a couple bankruptcy hearings.

The meeting of the creditors will consist of questions such as, did you review the paperwork being submitted, what is your ssn, do you expect any money or inheritance in the next X amount of months. These are all general questions. You should keep your answers to YES or NO.. Don't offer additional information and always make sure the trustee completes his/her question before answering. You should also be prepared to give a brief statment of why you filed. Keep it short and to the point. It should be the elevator story. The more you talk the more you allow the trustee to come up with questions if they thing their is something "off' about your story

I had to file in Michigan's Eastern district and ended filing or having my meeting in Lansing. So, I guess I could say I filed my Bankruptcy in Lansing or more specifically had my 341 in Lansing. The hard work was completed on deciding to file bankruptcy and gathering all your required bankruptcy documents. The 341 is basically a general hearing that begins to finalize everything. Remember, the meeting is a formality and their shoud be no surprises. If their is going to be an issue, you would have been asked to provide much more documention after you filed and prior to your 341 meeting.

Pre and Post Filing Bankruptcy Class

2008-12-15T12:51:00.004-05:00

The rules for filing bankruptcy were changed a for or five years ago. One of the changes was people filing bankruptcy would be required to take "Pre Filing" bankruptcy course. Although I was kind of taken aback at having to take a bankruptcy course prior to filing bankruptcy in Lansing Michigan. The person filing for bankruptcy not only has to pay for their attorney now they have to pay for a pre bankruptcy course and a post bankruptcy course. The classes typically cost $50.00 per bankruptcy education course. I still have to shake my head, your broke and the government is making you not only pay to file bankruptcy you also have to pay a fee to some company to educate you about bankruptcy. So, now you pay the attorney, 299.00 to actually file your bankruptcy case. Thinking about skipping the bankruptcy classes?? You have no choice. You can't even file unless you take the first class. You can't close your case until you have finished the post bankruptcy course. The best idea is to walk into your 341 having completed your post bankruptcy course.

Before you take a course you need to make sure they are approved by the government to provide the course. I found a cheaper company that charged $30.00. However, they did not automatically send my certificate to my attorney and I may have to wait. I decided to pay 50.00 for the more expensive one and the certificate was sent to my attorney and I was able to quickly download our certificate ( me and my wife). I also like the course was available online. I still have not taken the post bankruptcy class or Bankruptcy course.

A part of the prefiling bankruptcy class requires the agency to collect everything about your current situation. They will enter all your creditors into their database, all of your collection accounts and all of your utilities. The entity collecting this information will ask you how much you spend on EVERYTHING.. This is where it is a pain.

Suggestion.. I pretty much had this allready. However, take your time on this part answer all the questions truthfully and to the best of your ability. The company is trying to put to gether a Debt Management Plan(DMP) for you. I knew I didn't want to do a DMP. I wanted to file bankruptcy. However, play along with them let them collect all of your information for the DMP.

Why? they will or should provide you with a copy of the plan. USE it to help you fill out the paperwork on your credit matrix when you file bankruptcy.. I didn't do this.. however, looking back I should have spent the time doing this with the class. My thought now is. I should have made them earn their money for my requirement to take this class and me chosing them.

Don't get involved in a DMP.. You can do this yourself if you think it is a viable option. Nothing worse than sending someone else a check to have them mix, or mess up the payments. Eitherway, take advantage of the pain in the but required bankruptcy class.

Lansing Bankruptcy Planning

2008-10-13T15:58:00.009-04:00

In my recent post I discussed the importance of pre planning your bankruptcy. When I filed bankruptcy in Lansing the best thing I did was preplan. It is so important to not only figure out which chapter of bankruptcy to file, it is also important to understand where you are at for your median income in relation to the size of your family and the chapter of bankrutcy you are planning to file and qualify for. This is what I considered when filing Bankruptcy in Lansing.

The reason why it is important to figure out if you are below or above the median income level for your household is the ability to aide in your decision on which chapter you will be filing but also if you have the risk of being auditied. If you plan on filing for bankruptcy you should:

1) Print 2 years of credit card statements

2) Get two years of utilities statements.

If you have already spoken to a bankruptcy attorney in Michigan, they will most likely tell you that you only need 3 months worth of statments along with some other various documents. Granted, this is most likely the only thing you will need....

Unless...

You are audited.

There are two types of trustees that operate in bankruptcy courts, the local trustee and the US Trustee. If the US trustee audits your account they will want a couple of years worth of statements. Now if you have already intiated your bakruptcy planning and then filed. You may have a problem getting Credit Card Statements back for two years. You may not be worried about being audited. However, audits can be random and if you get hit with a random bankruptcy audit you want to be prepared. I also like to think about quotas that need to be filled. For example, would the trustee pick my case to audit because my case looks easy? I do not know if there are quotas. However, I wouldn't want to roll the dice and be caught short.

If you are caustious person you either shred your credit card statements or you dispose of any documents containing credit card numbers or account numbers in a secure and responsible way.

So, If you are audited how do you inted to retrieve two years worth of credit card statments if you have shredded them? Well, if you pay your bills online you can most likely pull the account statments from the previous two years.

Here lies the problem... you are already stressed because you have to file bankruptcy, then you get notified you are being audited. In normal bankruptcy preplanning phases your attorney told you to stop paying your credit cards( or should have). You would now be saving the money or putting money aside to pay them off your attorney. The money saved from not paying your credit cards is used to pay on the property you intend to reaffirm or vehicle(s) you plan on reaffirming. Unfortunately, as soon as you stopped paying your credit cards your online accounts have locked you out.

Although I have not experienced this.. I assume the credit card companies will not be very helpful in trying to help you obtain 2 years worth of credit card statments so you can file bankruptcy on the credit card company. I am sure there will be an bankruptcy attorney or two that will tell you, that you don't need documents stretching back that far. However, if they want to see 2 years worth of tax documents it's a good bet that if you get audited during your bankruptcy they will want to see those statements going back for two years.

In the end filing bankruptcy is stressful. You don't want to add stress to an already stressful situation. Plan for bankruptcy and act on your plan. It is by far better to have too much documentation than to come up short and have your 341 delayed because you are missing some credit card statments or utility bills. These are only some of the lessons I have watched, read and learned from people claiming bankruptcy in Lansing.

Bankruptcy Preplan

2008-10-06T15:09:00.015-04:00

Preplanning your Bankruptcy

Filing for Bankruptcy in MidMichigan or more specifically filing Bankruptcy in the"Lansing, Michigan" area I am not able to stress how important it is to create or define a"Pre Bankruptcy" plan. Is this something preplanning your bankruptcy illegal or underhanded? Absolutely not, pre planning bankruptcy whether it be Chapter 7 or Chapter 13 bankruptcy is an important factor in becoming informed on what the State of Michgan says regarding bankruptcy and what the Federal Government says about filing bankruptcy. Pre planning for filing bankruptcy in Lansing is no different than pre planning for bankruptcy in Okemos, Williamston, Dewitt or even Holt or other Bankruptcy districts in Michigan. Bankrutcy just requires planning in order to make it as smooth as possible to obtain your desired outcome when you actually decide to file for bankruptcy.

Why should I preplan my bankrutcy? Well, if you have used your credit cards, taken a loan or sold property 30-90 days before filing you may be required to pay the amount of money back to the creditors or worse yet, you may get nailed for fradulent activity. For example, you decide to buy youself a 60' flat screen tv on your your "Best Buy Credit Card" and next month you file for bankruptcy. You'll very likely either have to pay the credit card or sell the T.V.( although not typical). It is more likely you would be required to reaffirm the debt.

Preplanning also lets you know if you will be able to file chapter 7 or chapter 13 before you ever step into an attorneys office or ever contact your lawyer about filing bankruptcy. Just like you look for low rates or have done a credit card comparison you need to do the same with bankruptcy If you don't know what a "means tests" is then you definately have to start your planning for bankruptcy. Nothing could be worse if you have $20K-$80,000 of credit card debt and you try to file and come to find out you don't qualify for a Chapter 7 Bankruptcy and have to file under Chapter 13 bankruptcy rather than Chapter 7 bankruptcy which wipes all of your debts clean. Preplannig would let you know you should stop using your credit cards 90 days before filing bankruptcy. In addition to wating to file you would know that you may want to wait even longer if you have taken out a home equity line of credit(HELOC) to pay bills. Lack of pre planning could cause you to pay money to other creditors because you were responsible and continued to paid off some creditors with your HELOC.

The problem with making payments? You have just given preference to one creditor over another. The bankruptcy courts frowns uppon this. A perfect example is you paid back 8,000.00 to a family member because you owed them money. Guess what, you just made a preferetial payment to one creditor over another. Yes, your family member is considered a creditor.

Although this post describes the importance of "Pre planning" for your bankruptcy if you live in Lansing, Michigan or any of the surounding areas such as Grand Ledge, Charlotte, Bath or any of those other small towns and your considering filing for bankruptcy it is vital to conduct pre planning before you file your bankruptcy in any state or city whether it be Mid michigan or Lansing, Michigan.

How to Bankrupt yourself

2008-07-23T08:49:00.008-04:00

A road to Bankruptcy-"Lansing Michigan"

My previous post talked about our 25K(36K total unsecured debt) in credit card debt along with secured personal loans and how two people could be so stupid to get themselves in so much credit card debt. In this post I am going to do my best to describe how easy it is to all of a suddenly find your self and family consumed by debt especially if you live in Michigan and are filing Bankruptcy in Michigan.

First, I want to acknowledge the most responsible individual under the right circumstances can find themselves in debt to their eyeballs( medical, being sued, loss of job. Bankruptcy can extend from bad to unlucky investments, negligence, job loss, divorce. When my fathers second wife filed for divorce in Lansing Michigan it cost him 30K, that in its self would send most people into bankruptcy. However, since he’s lived in Michigan and has been alive he has never claimed bankruptcy. A stigma has been attached because of prior abuses. So, people consider people "filing for bankruptcy stems from irresponsible spending.

My story is mixed with negligence, responsibility and minor irresponsibility. Additionally, the savviest entrepreneurs have found themselves in the position where they had to claim bankruptcy. As an individual and a person not running a multi billion dollar company it only makes since we can find ourselves in the same position filing for bankruptcy. I just read in the paper another company in Lansing, Michigan filing Chapter 7 bankruptcy because things are so difficult.

Young Families

If you are married and are just starting out trying to build a family and you have a kid(s) then you know what the New Year brings and you look forward to it every year.

This assumes you are not bringing in over 100k year. Some of the best documents to receive at the start of the new year is your W2’s. If you’re laughing at this statement; you are one of my target audiences.

Most people whom are well off have their taxes done and they go through great pains to make sure they don’t have to pay taxes at the end of the year. If you’re married and have kids and are scrapping by you try to file your taxes as quickly as possible. Why? Most of people in the U.S. making low wages will likely receive a sizable tax return from government. Lansing Michigan is no exception. Granted this is if you’re like me and only have selected 1 or 2 for withholding on your W4 forms. I withhold 0. The money typically returned from our government can range from $2,000.00- anywhere up to $5,000.00. This is the money the government took from you. This is why financial gurus tell you to claim all your exemptions on your W2. If you follow their advice You will receive more in your paycheck and have less returned to you on April 15th.

I am not the best saver (right now) so; I chose the option of getting the big check at the end of the year. So, the government acts as your mandatory savings account. Another downside, is the government doesn’t pay interest for your tax money that it holds for you. So, you potentially loose out on $40.00 or $50.00 a month (assuming you saved 5k and invested and receive a 10% return on your investment). When you are young, just starting out or restarting your life you are just trying to survive much less worry about where and how you plan to invest. Although you don't get the interest made on the money I highly doubt it will throw you into bankruptcy.

Preemptive to bankruptcy in Lansing Michigan.

My wife had no credit to speak of prior to us actually meeting and dating. She paid everything with cash. I had shaky credit, mostly due to late payments while in the Service. During my enlistment the Army was changing over payrolls from the Army to the Air forces pay system (AAFES). This was a problem because I went crazy being young and getting all kinds of disposable income. However, the change in the military payroll system would prevent me from receiving regular direct deposits. I would go without a paycheck for two months and then take a "draw" to get back all my money the service owed me. This went on for about a year and pissed creditors off because I would be late. I finally got it fixed after calling the III Corp commander and FT Hood CSM ( command sergeant major) and telling them I was putting together all my issues and sending them to Senator Levin in Michigan ( in other words I was going to start a congressional investigation). Interesting enough, after almost a year of issues I had a full bird Colonel from finance kissing a privates (soldier) butt and assuring me the next pay cycle all my problems would be taken care of. Needless to say this is what started my first credit issue.

I eventually paid everything off and had a FICA Score of 750 (credit worthiness number). Prior to me and my wife getting married she bought a SUV co-signed by her mother. She had now built up decent credit. I then purchased a house and ring to propose to my wife. We got a really good deal on the house and the purchase had equity in it. However, one of the problems is the house did not have a stove, fridge, washer and dryer. However, I have good credit and my wife is building up her credit. I suppose we could get some credit cards and “PAY THEM off with our TAX return” I was making only 13-14/hr I couldn’t see any other way to get these products we desired or expected to have during these modern times.

The first Lesson and the beginning of a decline of financial stability My prelude to Chapter 7 and Bankruptcy in Lansing.

The following takes place over the span of about 5-6 years.

I applied for a Lowes Card. - approved bought A washer, Dryer and Stove on credit. You would think that is where the problem started. No—the following year we used our Tax return and paid the credit card off. Unfortunately we had a junk fridge we bought for $50.00. The fridge was on the fritz and was leaking water everywhere. No problem I have a Lowes credit card recently paid off free and clear. I put it on the card.

Oh yeah, I did forget to mention earlier I bought a sectional (couch) with no payments for 18 months and no finance charges if you paid it off before the 18 months. It now looks like my money from our tax return was not going to be enough to pay both off. Yikes, I have credit card debt. No it did not put me into bankruptcy..However, it's the start of the snowball effect

The moral or lesson here, all my credit card debt stems from something of a similar circumstance. Here’s the best, a couple years ago while struggling financially I purchase fuel oil ($800-$900). Would you know it, the furnace broke and the part that broke was supposed to have a lifetime warranty (heat exchange) except they don’t make the part for that particular furnace anymore. Here’s another problem. We of course bought the fuel oil on credit (you have to keep your family warm). We are now faced with about $900 of fuel oil with no furnace.

Fuel oils stinks, my intention was to always replace it with a propane furnace. I did, after borrowing money from my father. A humbling experience since I have rarely ever asked my father for money. Being 33 years old and asking daddy for money to fix my problem (Pride issue).Of course, we replaced the furnace. I went to pay dad back ( tax money) and he told us to keep the money. Great.... I can pay thousand dollar medical bill I have from being the hospital. Additionally, with changing furnaces from fuel oil to propane, I have to pay to fill the new propane tank with fuel. Cha Ching $1,200 Of course, I had to put it on credit (remember keep your family warm). No problem I’ll pay it off with our tax money.

Oh yeah, the transmission decides to go in my 2000 SUV the only working vehicle we have. Most credit card debt was earned like this. Of course, I didn’t include buying new vehicles (beaters such as $500 & $1,000 cars) which would break down after awhile another great way to piss money away. My next post will detail every thing I think of that has to do with irresponsible spending and how filing for Chapter 7 in the Lansing courts is going to teach me to save my money.

Deciding to file bankruptcy

2008-07-10T08:35:00.021-04:00

Filing bankruptcy in Michigan

I will create a financial history post in a future post about Filing Bankruptcy in Michigan and I how I arrived at over 25K of Credit Cards and debt. I thought prior to being in my current position it was utterly ridiculous that someone would be so irresponsible or to quote myself" be so stupid to allow themselves to be put into this position". Yet the phrase of "judge not, lest ye be judged" comes to mind for me. I have not claimed bankruptcy as of yet. However, I am in the planning stages of filing for bankruptcy and this will be my diary of my experiences prior to bankruptcy, during bankruptcy and post bankruptcy. The wonderful thing about the Internet is the ability to research anything you want to do, and my decision to file bankruptcy is no exception. You get to find what property is considered exempt property when filing for bankruptcy. You will be able to conduct your own means test as it relates to bankruptcy and you can actually pull the legal documents needed prior to ever walking into a lawyers office. My thought is this, do all the research and collect every possible bit of information before I ever step into my lawyers office. I hope this makes filing easier. I also hope that this will let my lawyer know.. Hey, this guy is not an idiot and has done his research. That makes it harder for people to screw you over if you they suspect you have done your research. You are also required to take a finance or credit course prior to filing. I Intend to do this prior to meeting with my lawyer. However, if you do this prior to meeting with your lawyer the credit counseling certificate is only good for six months.

How I arrived that I needed to "File for Bankruptcy" as my only and last solution.

late 2007 I did an extensive audit of our financials( me and my wife's). Currently my wife does not work and we have 3 kids. We started our marriage focused on that a parent needed to be home to raise the kids. I make approximately 21.00 almost $22.00 an hour with no overtime available. The first thought you would think would be to have my wife go get a job? Yes, that would be nice except the cost of child care alone could put someone into bankruptcy ( yes, a little exaggerated, some truth in the statement especially if you"live pay check to pay check").

My audit consisted of taking an excel spreadsheet and collecting my bills and bank statements for a period of 6 to 8 months and writing everything down from how much we owed to the interest rate on credit cards to minimum payments. This can be a very humbling experience to look at this. Yes, you do know how bad things are mentally. However, you really get a reality check when you put it to paper or a spread sheet. A mental audit does no credit to cold hard numbers on paper. My audit consisted of breaking down exactly where the money is being spent along with a list of categories designating areas of spending for entertainment, grocery, vehicle, vehicle maintenance, cash pulled out of the bank, household costs and every area I thought should be classified.

I am including a snapshot of my spreadsheet minus the account numbers ( remember I have not filed yet).The first snap shot is of the due dates of all our bills. This is needed to gauge how much my paycheck is versus the amount going out for bills (minimum payments). Please note the tabs at the bottom of the picture to show you exactly what I looked at. The tabs include; "total debt", "Monthly spending detail", "Monthly budget", sort by "Total owed", sort of "highest APR ( annual percentage rate)" sort of "credit owner" ( me or my wife)

Now this is just the snapshot of the due dates. To me and my wife's credit(or kudos) prior to us filing we have maintained minimum payments and have rarely missed a payment on anything. We have never been late for a house payment and have never missed a house payment. When we started out we set up our house payment to be automatically deducted from our bank account. I don't like automatic deductions. However, you have to be in the mindset that you have to have a place to live. Granted because it was automatically deducted that does not necessarily mean that our bank account always had the money to pay the full house payment. At times it didn't, and we took the "hit" for the overdraft fee that came with an underfuned bank account. However, the house payment was made and shortly after the overdraft fee posted to our bank account I usually received a paycheck. So, our bank account was not in over draft for a long period of time.

Lastly, before showing more screen shots.. We have our house payment automatically deducted on the 15th of each month. I would say paying on the 15th really saved us because most bills are due on the 1st or during the first week of the month. I have shown you the spread sheet I created to look at my financial due dates. Looking at this spreadsheet makes me cringe and I am sure you will also cringe at the amount owed based on my income. Although I am not going to get into the history of how I arrived here( in this post) I will let you know that since I have been married I put myself through college( additional 20k debt) and raised my income from 13.00/hr to over 21.00/hr.

The psyche of the Credit borrower

The screen shot below is only a list of credit card debt.

The next screen shot will show total debt owed by me and my wife. One would think looking at this is enough to go ahead and claim bankruptcy. No.. we believe we did this and we should get our self out of debt. It's called responsibility! OK. So, we were irresponsible. I live in a 68k home, I have two vehicles worth about 5k a piece, a camper that is paid for. Which I assume I will have to liquidate(camper). However, what's the use in having a camper if you can't scrape enough money together to go camping. additionally, we have not taken a vacation in 5 years. I have 3 suits, my wife and I both have old cloths because any money or credit available (the credit cycle)is used to buy kids new cloths. We have concluded we were irresponsible.. although not on purpose. We got married in our yard, didn't go on a honeymoon to save money. The money from our wedding was used to pay off what little debt we had at the time and put new tires on the SUV.

Now ,we need to fix the problem. I looked a how to make money online. I found some sites to help generate additional revenue and I am working towards making additional income to try to fix our problem. Unfortunately, mitigating circumstance have pushed me to take action now. Before I get into that, here's a little philosophy and info from the bible. Granted, I am not a 'bible thump-er'. I do believe that their is a god that created everything.

I have been reading the bible from front to back for about a year in my spare time. One of many things that stick out is "debt forgiveness" that is in the bible and it says every 7 years(Deuteronomy 15:1-9). I presume that's where the U.S courts came up with only allowing you to file once every 7 years. However, one f the biggest bankruptcy issues that may preside in the individuals Psyche is "PRIDE". The bible states this as being a sin. I had never really considered pride a sin. However, Pride hurts us in so many ways. It will prevent you from saying sorry when you know your wrong. It will prevent you from associating or helping people you consider below your "social class" and yes PRIDE even plays a role in your decision to file for "bankruptcy".

The mitigating circumstances I recently dealt with was my health. I had not had a seizure in 5 years. I recently had one( two in one week) and was really out of it. It put me in the hospital for a week. The deciding factor to file for bankruptcy happened after my seizure. I was functioning but incoherent. My wife asked if I wanted to go to the hospital. I told her "No" She asked if I didn't want to go because of bills?? apparently I said yes. I barely remember this conversation. However, that was why I didn't want to go. What does this mean?? I placed money before my health and honestly, before my family ( what if I would have died?) who would take care of my family? I am the sole provider. This was the final straw. I would not hem or haw about filing or waiting to make extra cash to pay off my debt. The time was now. However, I am currently holding off on filing because of the hospital bills that will be arriving soon for my week plus stay in the hospital. Additionally, before filing I plan on pulling a free credit report to make sure we include all of our bills.

Looking at issues outside of filing for bankruptcy

I am proud that me and my wife never argued about money( well, argue to extremes) to the point that it would cause either one of us to want to walk away from our marriage. Both of our thoughts were.. we both got into this how are we going to get out. You should always be aware of what your spouse is spending and saving. If there is ever a surprise it's both your fault. I suggest you both get your credit reports yearly and review them together.. Your a team and both of you are ultimately responsible for your financial outcomes; good or bad. Likewise, if you are trying to decide if you want to ruin your credit by filing for bankruptcy.. Ask your self this question if you TRULY & HONESTLY believe you will be out of debt in 10 years.. If not, you need to seriously consider filing for bankruptcy and start rebuilding your credit. Hopefully by the time the bankruptcy drops off you will have established yourself with good credit. My total debt is listed below, BTW.. College loans will not or can not be removed during bankruptcy( unless health issues or significant hardship).

***NOTE** I am very secretive about how much I make and how much I owe around other people. Three people know I intend to claim bankruptcy. My mother, father and the World wide Web( I overcame Pride). Of course, natives of Michigan probably have heard of several people claiming bankruptcy in Michigan.

I look forward to the days when I will be able to finally save enough money to take my family on a vacation. I look forward to removing my status of living paycheck to paycheck and the day to day struggle. I look forward to freeing myself of debt to actually invest in my future and invest in my retirement. The interesting thing that creeps through my mind is I make too damn much to be this broke.

I am claiming bankruptcy in Michigan to invest in myself and family's happiness.