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.

Christmas 2006

Our Christmas

This
season has come and gone leaving us with warm thoughts and good memories. We
had a more modest holiday this year, as I decided beforehand not to overindulge
in spending. I went shopping for my wife only, and left the rest to her, she
does a much better job of it than I do with my once a year binge shopping
sprees.

I
purchased one of Dave Ramsey’s packages for my oldest son, which consisted of a
book and a couple of videos to try and show him some of the better ways to
handle his money, something which I so obviously failed to teach him as he was
growing up. It’s the American way, debt, promissory notes, and credit cards.
It’s a mistake that I truly regret as I see him follow in my footsteps,
borrowing to obtain the things he wants now, and little or no savings. When I
talk to him about how we have to pay over time for what we are getting on
credit anyway, only triple or quadruple the price for the added interest, sort
of like a backward savings account, he understands that it would just be wiser
to save up the money for the purchase.

I
bought myself a pair of work boots to replace the two-year-old ones that were
beginning to let the water in. Funny how you only notice when it’s wintertime.
All of the items I purchased this year were bought with cash, as I was blessed with monetary gifts this year from three different people. I did buy gift envelopes
though, and gave most of the money away in lieu of extravagant gifts to my
immediate family members. This coupled with their smaller, more humble, presents
that their Mama bought them seemed more appropriate than my usual way of doing
things. She is so much better at getting them what they need instead of
what may be a passing fancy.

Say
what you want about monetary gifts being the lazy persons way of avoiding
having to put thought, effort, and time into gift buying, I battled internally
with my own thoughts about gift giving, and the fact that I had already
verbally communicated the need to having a frugal, scaled down Christmas. I
struggled with the idea of putting the cash toward my goal of savings and
getting out of debt, but the words kept coming back to haunt me, “Give, and
it shall be given unto you, pressed down, shaken together, and running over”.
So, I gave freely, with no stipulations on how they should use it. Mind you, I
put these money gifts under the tree, and I put bows on them, and I included them in
the gift packages that they already had, and then I took them out. I removed
the fancy bows, and I put them away. Not wanting this to be a part of
Christmas, or to take anything away from the customary gift exchange on
Christmas Eve, I gave them these gifts the next day, almost failing to give my
beautiful wife her envelope on Christmas day as it was almost midnight when I
handed it to her. Seems to me that there was a lot of thought and work going
into this. I’m not saying this is the best way, nor is it for everyone, but it
certainly relieved some of the pressure off of my family, as my oldest had
already expressed his desire to scale back this year on buying so many gifts,
and I echoed his protest, and fully intended to follow through with our
commitment to a smaller, simpler, and yes, cheaper, way of doing things.

The
actions that I took this year were reciprocal, and I relaxed in the knowledge
that poor people were not struggling to buy me several things, which they
really could not afford. I did not do the usual gift opening at the in-laws,
which requires pretty faces, and awkward hugs for sometimes novelty items that
are mostly useless, or hearty thanks for clothing that would fit Sasquatch.
They did send two gifts for me, both of which I’m wearing.

Kay
cooked a wonderful Christmas dinner with all the trimmings. My oldest and his
family came over and we enjoyed the opening of a few gifts for his babies, and
one each between us. My Mama was here,
and my benevolent sister Lotus, and in addition to her other gifts, she brought
us some really nice curtains which flatter my office much more than the ones
that I already had, but she had to stay late to sew some modifications on the
back to fit the curtain rod. With Lydia’s help from a well timed phone call,
the sewing machine that we thought was useless all these years was fixed
(another impulse buy), that was her gift to us, and the curtains are up, and
nice, if I may say so myself. There are no pictures this year, as I took a
total turnaround from the usual, and decided to forego the amateur photography
and backside profiles of gift giving, so, you folks have something to be
thankful for also.

http://tejasmidget.multiply.com/photos/album/131
We
have much to be thankful for, and we are blessed to have family that we love,
and we know what the true meaning of traditional Christmas is, it is about
caring. This is our Christmas.

May
God bless you all with a healthy and prosperous new year.