Bankruptcy, Erasing the Stigma

Ninety percent of all debtors feel some sort of moral requirement to repay their debt. In recent years, as Wall Street investment firms and Big Banks have led us down a tempting path to buy now, pay later, more and more people are coming to the realization that Economics is just a game, usually with the biggest players holding all the Aces. Fast forward to 2010. In the current economic downturn, people are becoming less sympathetic, even downright angry. Banks have stifled credit lines and are hoarding money, all the while borrowing heavily from the American workers, who are the backbone of capitalism and prosperity. We have given them extremely generous repayment terms and they have repaid us by reducing our available credit, canceling $0 balance credit cards, and raising fees for everything along with the kitchen sink. They have refused to work with the federal programs to stem the tide of foreclosures, and made haste to beat the new consumer protection laws. Those whose hard earned credit scores have taken years to build and are watching them plummet through little fault of their own will get the point I make here. While investment firms, insurance companies, and large corporations (think Detroit) “too big to fail” are filing for bankruptcy protection right and left for restructuring, debt reduction, and/or debt forgiveness, we convince ourselves that this is the right thing to do, our economy is dependent on it. Whole countries and provinces are insolvent and bleeding red ink (think Greece), but we simply don't attach the same sense of moral obligation or standards to these entities as we have been taught to hold ourselves to.

Much to the Big Banks dismay, and precisely because of the buy now/pay later offers that have flooded our mailboxes and other advertising gimmicks pushed on us over the last fifteen years, debtors are tiring of this game. There are billions of dollars at stake as consumers are waking up and getting their newly revamped credit card statements in the mails showing exactly how many years it will take to pay off their credit lines. Sticker shock sets in as they can see what the CC companies have tried hard to diminish, ie: decades can be spent paying off debt, in fact, if you paid your accounts like the good little boys and girls you are told to be, you will have paid off your original debts and charges by as much as 100 fold. Truth is, the good credit score is a sandpit, with lenders selling credit lines and credit reporting agencies cashing in on selling your personal information. How could big banks hand out thousands and thousands of dollars in unsecured credit lines? They weren't. They were investing in the moral stigmata of your playing the credit score game. They were investing in your future earnings. They were making paper money off thin air, all they needed was your signature. 90% of us have our souls attached to our good name. Many have sold it to the devil. They have spent years building up these social castes, rewarding more points to those who played the game well, punishing the poor with the greatest burdens, higher interest rates, less available credit, more repossession, foreclosures, and demerits.

 Since 2002, the year the credit card apps and pre-approvals began flooding our mailbox, We have paid out $59,725.01 to credit card companies on the buy now, pay later plan. Lines of credit were soaring, credit scores steadily climbed higher toward that elusive 750+ club. This past year alone, in thirteen short months from January 09 to March 10, $13,288.01. In late 2007, early 2008, the banks began reducing lines of credit causing scores to suffer. In 2010, we are still more than $53,000 in credit card debt (didn't I pay anything?), Guess what? We don't have $50,000 worth of neat new stuff, can't get any neat new stuff, and furthermore, I didn't even buy $50,000 of stuff, much less over $110,000 worth. I would be dead before paying down this load, leaving my spouse to do battle with the legions. How moral is that? Over the last few years I have watched our disposable income shrink as we paid out more and more to the credit card companies while keeping a watchful eye on our income, our progressive years, and seeing our standard of living slowly decline. I am smart enough to know that this wasn't a good game of chance we were playing. I held all the jokers in a jokers aren't wild card game. Don't get me wrong, we are not destitute, we are not hungry. Thankfully, a lawyer tells me this is not a prerequisite. We were current with all but two of my creditors, and those were by choice. As the waters swelled deeper, and the waves threatened to beach the boat, and then with Kay's sudden retirement, I now had the resolve to do what we needed to do months if not years earlier. I took the first step toward resolving our cash flow problem. I contacted a bankruptcy attorney.

 I've done the homework, I've done the research. I even entered into a hard to get out of trial debt settlement plan with Credit Solutions scam company a couple of years ago. I had to close a long standing savings account to keep these scammers from stealing my hard earned money. They promise to help you settle your existing debt for a percentage of your outstanding debt. My advice: Don't do it! You can ruin your credit all by yourself and save a ton of money. Most banks/cc companies don't recognize, do business with, nor are they legally obligated to do business with any third party negotiator. If you just insist, there is only one company that I might suggest, one the credit card companies play along with, and they have teamed up with C.C.C.S. as well as they are also authorized to do pre-bankruptcy counseling for the US Bankruptcy Trustees. Look them up if you want: MMI http://www.moneymanagement.org/
If you are interested in a review of a few debt settlement companies you can read this short one: http://www.topconsumerreviews.com/debt-relief/detailed-reviews.php  Otherwise, see a lawyer.
Wipe out that debt in a Chapter 13 or Chapter 7 and do it legally and as painlessly as possible. Don't worry, you will reduce your debt and save yourself a lot quicker than any other way, and, you will regain your credit. There are pay as you go car lots, there are secured credit cards. It is advisable to have at least one home town loan officer that you are personally familiar with, but this should not be any deciding factor. Here is a good resource for familiarizing yourself with the ins and outs of bankruptcy.
read: http://www.bankruptcyaction.com/questions.htm
Chapter 7- All debt discharged 45-90 days. Check your state to see what you can keep, usually 1 house, 1 car, items with less than $500 in value. Ask a Lawyer!
Chapter 13 – Keep everything you want to keep. If you owe money on it, like a house a boat, a car, or a piece of property, you may have to pay all or a portion of it. Ask a Lawyer! It's free to consult, so be prepared: 3 or 5 year repayment plan. Unsecured debt gets 0-100% of timely filed claims, mostly 0%. Many creditors don't bother.
find: http://www.bankruptcyaction.com/attorneys.htm
Fill out this form: http://www.bankruptcyaction.com/application.htm
These are all the same questions you will need answers for at a lawyers office. You will need most, if not all, of this information so he can better help you and so you can avoid return trips. Also, you will have to do a phone or internet (phone is preferable to avoid mistakes) pre-bankruptcy counseling session ---- Know your budget numbers! (Quicken printouts was invaluable for this) Don't give away vehicles or property prior to filing. Sell them if you must for a few dollars, too little to pay off debt but enough to buy groceries, pay light bill, etc.
I am not advocating bankruptcy. I am saying it is not a sin. It is not the shameful act of cowards. It takes a wise person to find him/her self at this place in life and make the best choice for their family.

For the last several years, I have assumed most of Kay's debt, and some of our oldest. We have assisted them through many endeavors, college not being one of their choices, and we have reached the end of our borrowing power. With Kay's signature on several co-loans, our boys have footholds, but the banks have also diminished, through the credit score model game, her ability to help. In this community property state, my debt is her debt, her debt is mine. Check yours.
Tried uploading a few pictures but the uploader failed so hope I haven't bored any of you silly :) We are in good health and spirits, we have a way to go.