Has Anyone Here Been Through Chapter 7 Bankruptcy?

[nanookadenord]

What to expect:

1. Find a bankruptcy lawyer. Bankruptcy is pretty cut and dried, so, just start calling around and find a cheap one.

2. Pay his fee, and bring all of your creditors' addresses, and your W2 and bank statements from last 6 months. Also, Last two months paystubs. (If he wants more, he'll let you know.)

3. If creditors call, tell them that you are filing for bankruptcy, and give them your lawyer's name. They are required by law to stop calling you at this point.

4. Your lawyer will get with you on the court date. When you get one, on that date you and your lawyer will go to the courtroom, the Judge or Trustee will ask you some simple questions, such as a. How did you get into this situation and b. How much do you make a month/year/somethinglike that c. Are you expecting a tax refund this year (which will need to be surrendered when you get it,, to satisfy your creditors) c. Do you want to re-affirm any debts (Answer: NO!) d. Do you have any piles of cash. The Trustee gets probably 1000 or more cases like this a year, so, they don't want anything long or drawn out, just the simple facts. The Judge will then ask your lawyer if there's any other information. You will then be dismissed, and your lawyer will say "Sayonara, Pal!" and you will be notified by mail of your bankruptcy discharge.

It's a simple process. And, it's great! You can now answer the phone without fear!
I've done it twice over the last 40 years.

In re: Future credit, I can't give much advice, but, I do know that FHA, or whatever federal agency it is that gives house loans, will give loans 2 years after a bankruptcy.

Best wishes.

Thank you for your response.

I have indeed retained a lawyer for bankruptcy and most of my cards which are only a month behind have already started calling me as me missing payments is not normal (their words). Per the lawyer, I have informed them that I have retained a lawyer and that they are to call her.

Because of how much I am paying her, she cannot file the paperwork until my payments are completed which I understand.

As for as home loans and such, you are correct. We would probably go with a FHA loan anyway.

I also did some research and there were people who were able to get auto loans right after bankruptcy, at a modest interest increase. Most around the 9% mark or so. My current auto loan is a little over 7%. I am reaffirming the auto loan as I need to keep my car. No other way to get to work if I don't.

There are no piles of cash and as I mentioned in my other thread from earlier. I have $100 to my name for the next two weeks which isn't much at all. My next paycheck will leave me with even less as I have the lawyer to pay on that check.

 

[nanookadenord]

Everything I wrote, is stuff that has personally happened to me. I have had a phone company refuse based exclusively on my credit history. I've had employers decline to hire because of my credit. I've had people tell me they couldn't get an apartment because of their credit. That's why they were rooming with me. I know 3 people that file bankruptcy, and said they would have never done it.

By bills, I mean your car payment is $500 before, it will be $500 after, unless you give up the car. If you are going to give up the car, do that first, and then perhaps you can avoid bankruptcy. If your electric bill is $100 before, it will be $100 after. If you are blowing $400 a month eating out, bankruptcy will not change that. If you are borrowing money every month, because you are spending more money than you make in a month, and this is why you are in debt, bankruptcy does not change that. If you spend more than you make after filing bankruptcy, you'll end up in debt again.

FHA sucks. My opinion. Worst mortgages ever.

I'm not here to argue with you. My advice, is my advice, and I stand by it. You disagree, that's fine. But every single thing I wrote, is true and accurate. It happened to me.

Nice chatting with you.

I am not worried about a cell phone. My girlfriend already pays for my cell phone on her plan. As for an apartment. I am not worried about that either as I plan on marrying my girlfriend and I can always move in with her until we get a house.

My car payment is $100.84 a month. I am keeping my car. The $100.84 a month that I would get if I gave it up, will not help.

I have learned my lesson and will not fall into the same pattern again.

So, bankruptcy is my best option, hands down!!

 

[nanookadenord]

Everything I wrote, is stuff that has personally happened to me. I have had a phone company refuse based exclusively on my credit history. I've had employers decline to hire because of my credit. I've had people tell me they couldn't get an apartment because of their credit. That's why they were rooming with me. I know 3 people that file bankruptcy, and said they would have never done it.

By bills, I mean your car payment is $500 before, it will be $500 after, unless you give up the car. If you are going to give up the car, do that first, and then perhaps you can avoid bankruptcy. If your electric bill is $100 before, it will be $100 after. If you are blowing $400 a month eating out, bankruptcy will not change that. If you are borrowing money every month, because you are spending more money than you make in a month, and this is why you are in debt, bankruptcy does not change that. If you spend more than you make after filing bankruptcy, you'll end up in debt again.

FHA sucks. My opinion. Worst mortgages ever.

I'm not here to argue with you. My advice, is my advice, and I stand by it. You disagree, that's fine. But every single thing I wrote, is true and accurate. It happened to me.

Nice chatting with you.

Why do you say that about FHA loans? Genuinely curious.

 

[RaymondG]

Why do you say that about FHA loans? Genuinely curious.

"FHA loans are what I call friendly loans for the “credit-challenged.” ... With an FHA loan your credit score can be as low as 580 to qualify with a 3.5% down payment requirement. If your credit score is between 500 and 579, you may still be eligible for the loan, but you may need a down payment of at least 10%"

You must also have a debt-to-income ratio of 44% or higher.
Mortgage insurance is also a requirement...... So on top of your mortgage and escrow bill....you will have to pay insurance every month.....all combined into your mortgage payment..

I wouldnt, however, necessarily call it a bad mortgage........as long as you understand what you are getting into and how to get out of it.

 

[nanookadenord]

"FHA loans are what I call friendly loans for the “credit-challenged.” ... With an FHA loan your credit score can be as low as 580 to qualify with a 3.5% down payment requirement. If your credit score is between 500 and 579, you may still be eligible for the loan, but you may need a down payment of at least 10%"

You must also have a debt-to-income ratio of 44% or higher.
Mortgage insurance is also a requirement...... So on top of your mortgage and escrow bill....you will have to pay insurance every month.....all combined into your mortgage payment..

I wouldnt, however, necessarily call it a bad mortgage........as long as you understand what you are getting into and how to get out of it.

My girlfriend and I were talking to a lender about a month ago and he mentioned that they do FHA loans without PMI.

 

[RaymondG]

My girlfriend and I were talking to a lender about a month ago and he mentioned that they do FHA loans without PMI.

Yes, this is true.....If you put 20% down, and/or factor in a sellers concession.

And al ways remember that the brokers job is to get a sell.....not to make sure you get the best deal possible.

 

[nanookadenord]

Yes, this is true.....If you put 20% down, and/or factor in a sellers concession.

And al ways remember that the brokers job is to get a sell.....not to make sure you get the best deal possible.

He told us 3% and it was an independent lender not affiliated with a bank. They write up everything on their own. No seller's concession either.

My girlfriend has had a house before, so she is more familiar with this stuff than I am.

 

[RaymondG]

He told us 3% and it was an independent lender not affiliated with a bank. They write up everything on their own. No seller's concession either.

My girlfriend has had a house before, so she is more familiar with this stuff than I am.

These private lenders sell your mortgage to the big lenders shortly after you close.....sometimes not even a year after.

Therefore they only care about you signing your name....because they won't have to worry about whether or not the deal is good for you or them.

I encourage you to go for it and learn your lessons like I have.

 

[nanookadenord]

These private lenders sell your mortgage to the big lenders shortly after you close.....sometimes not even a year after.

Therefore they only care about you signing your name....because they won't have to worry about whether or not the deal is good for you or them.

I encourage you to go for it and learn your lessons like I have.

Not even close, but thanks for the encouragement.

 

[Andrew77]

Not even close, but thanks for the encouragement.

Please tell me that you are not planning to buy a house with a person you are not married to...?

 

[nanookadenord]

Please tell me that you are not planning to buy a house with a person you are not married to...?

Nope. We'll be married first. We are just looking at houses as we like to look and it's free to do. Also finding a builder we like if we go new build.

 

[ValleyGal]

Nanook, I'm not familiar with American bankruptcy laws, but have been through one where I live.

During my bankruptcy, they seized two years of my income taxes and all other government benefits. That was hard, but I was used to it - the government kept my cheques anyway because it was for government-issued student loans.

I gave the Trustee all my financial information - income, creditors, assets, everything. And then every month, I had to give them my pay statements and a very finely detailed account of where every penny went.

I had to submit any credit cards. I didn't have any, so that wasn't a problem.

I had to attend two little workshops. One at the start of my bankruptcy period to go over how I got in this mess and how to keep from getting into it again. The other was at the end of the bankruptcy, and it was to learn how to rebuild credit. Rebuilding credit can happen even while you are in your bankruptcy period - and I advise you to do all you can to rebuild early on.

I was allowed to keep my very old car. Before the bankruptcy discharged, my car completely died. The [bless and do not curse][bless and do not curse][bless and do not curse][bless and do not curse][bless and do not curse][bless and do not curse] went. Replacing a [bless and do not curse][bless and do not curse][bless and do not curse][bless and do not curse][bless and do not curse][bless and do not curse] would have cost more than the car is worth. They allowed me to buy a new car on credit to help build my credit back up because there was only two months left in the bankruptcy period. Otherwise, they would have allowed me to get another (working) junker so I could keep my job.

I made a little more than you, so had a few extra dollars every month. I squirreled that away (which helped for a down payment when I got my car). But they said that if my cost of living exceeded my income, they would work with me and the courts to decrease payments - such as if I were expected to pay child support. I didn't have this problem, but that could be something they can help you with. Where I live, no one - not even the government - can leave citizens with less than the amount it takes to live. In other words, maybe the court would decrease your monthly child support by half, or maybe they would allow you to have a less comprehensive medical plan for your children.

Once I was discharged from bankruptcy (they still kept that year's income taxes and government benefits, though), they said after about 4 months, I had to request a credit check to make sure that the bankruptcy was listed and all balances came to "0". They required a copy of these checks. The bankruptcy will stay on my credit report for 6 years from the date of discharge. .... BUT ...

.... interestingly, I was able to get a car loan. Not only that, but about halfway into bankruptcy, my bank sent me a letter saying I had been pre-approved for a credit card. I went into the bank and said I think they made a mistake. The teller made a note on my account that I was in bankruptcy. About two months later I got another letter saying I was pre-approved for a credit card. lol. I shredded it. But when I found out in my second workshop on how to rebuild credit, I learned that I needed a credit card. So I went to the bank and asked if it is still an option. They said yes, so I took them up on it. I now have a credit card for the first time in my life. I used to save money and then buy what I needed. But in today's world, everyone needs a credit card. I can't even go to the city and pay for parking with coins anymore - all the machines only take credit cards! So I got one, and I pay for my car gas with it. I pay it off every month - because I budget for gas and have the money to pay for it. When I did my credit checks, credit card purchases were already helping my credit score!

So even though my credit checks have a bankruptcy on them, my scores are becoming good because I started proving myself even before the bankruptcy was discharged.

Back in biblical days, I believe God made the 7-year concession for debt forgiveness simply because they didn't have any other bankruptcy laws. Now we do - and notice that bad credit and bankruptcy only stays on your record for 7 years. We are still living by that 7-year concession. And it was God who instituted that concession. As hard as it is to go bankrupt and rebuild your credit, it's one of the ways God has already provided as a way out. So kudos for you, for taking responsibility for it, and availing yourself of taking God's way out. As it says in the NT, there is no "temptation" so great that God has not provided a way out. Not that this is the same as Jesus' concession for our sins or temptations, but it is a legitimate way out.

I won't tell you to not feel bad about it. I still feel horrible that my life went that way! And as others have stated in this thread, I was not 100% at fault - there were other factors involved. But I did what I had to do, took responsibility where I shouldn't have, and came out clean on the other side. I did feel bad, and I felt resentful. But I also felt such an intense sense of relief! I was no longer afraid to answer my phone or even check my messages. I was no longer stressed to the max over how I was going to pay any of it back, let alone the interest. I was no longer living under a dark cloud of judgement of being someone who didn't take responsibility when the opposite was actually true. I felt FREE!!

It's a hard thing to go through, but throughout the process, be kind to yourself and know that you did all you could do, and that going through this is not sin. It is God's kindness to man.

 

[RaymondG]

Bankruptcy is not God's way out....it is man's. and the OPer already stated that he doesn't want to hear anything scriptural related to bankruptcy...only personal experiences. But it still stands that if one used bankruptcy solely to get out of paying bills they agreed to pay or to make another lose out of money, for their personal gain.....they will eventually inccur the same feeling/actions in their own natural lives. It will feel like hard times and persecution from others.....others trying to take things from them that they don't have...... But, in fact, it will only be us reaping what we have sown.

 

[nanookadenord]

Bankruptcy is not God's way out....it is man's. and the OPer already stated that he doesn't want to hear anything scriptural related to bankruptcy...only personal experiences. But it still stands that if one used bankruptcy solely to get out of paying bills they agreed to pay or to make another lose out of money, for their personal gain.....they will eventually inccur the same feeling/actions in their own natural lives. It will feel like hard times and persecution from others.....others trying to take things from them that they don't have...... But, in fact, it will only be us reaping what we have sown.

I have no other way out. Bankruptcy is it.