Update on my situation...

iVillage Member
Registered: 03-27-2003
Update on my situation...
13
Thu, 02-03-2005 - 10:18am

Hey everyone!
First, I wanted to thank everyone that responded to my issues.
I have decided to file a Chapter 13 reorganization. I cannot tell you immense relief I feel about this!!!!
I will make payments for 36 months of $3200 a month to the bankruptcy court and my debt will be completely gone at the end. That is $117,000 worth of credit card debt erased. There is no way with my minimum payments at 29.9% interest that I could foresee being debt-free any time soon. Obviously, I am aware of the hit my credit will take, but I have a car and house and I have absolutely no desire whatsoever to ever own a credit card for as long as I live!

My attorney said credit card companies are modern day loan-sharks. While I do not underestimate the part I played in creating this debt, I really feel like they are not playing fair when they raise interest rates on someone who has faithfully paid them for years and years.

Anyway, if anyone has questions about the Ch. 13 I am happy to help. On a side note, I am a lawyer, although bankruptcy certainly isn't my specialty :)

I really wish I wouldn't have waited to so long to file. I was hoping to get out of this the Dave Ramsey way but in all honestly, it just wasn't practical or feasible.

Amanda

Pages

iVillage Member
Registered: 01-04-2005
Thu, 02-03-2005 - 12:13pm
You know I just get this sense that the American family is getting screwed. Corporations make out like bandits, and as they say, the rich just keep getting richer.
iVillage Member
Registered: 03-27-2003
Thu, 02-03-2005 - 12:20pm

I am SOOOO optimistic!! I have been depressed about this for ages. My only worries now are what if one of us lost our job or something. When I think about having an extra $3100 left over in 3 years I am thrilled beyond belief!!! I even considered that if we continued to pay the $3100 to our mortgage company (since by that time we will be used to living on the $3400) our house would be paid off in 3 years.

I wanted to add as a side note re: student loans:
IF the payments I make do not completely wipe out the student loans, then I will still have to pay them once the plan has ended. You CANNOT discharge student loans in a Ch. 7 or even in a Ch. 13, although in a Ch. 13 your plan payments include student loans.

Another issue re: my car. Even though the balance is $37,000 on the note, the current value of the car is $25,000 (major depreciation..my car only has 8000 miles on it). In the bankruptcy, GMAC will only get back the $25,000, as opposed to the $37,000. The 12,000 extra is considered unsecured and is lumped in with the rest of the credit card stuff (meaning they will get very little back).

iVillage Member
Registered: 02-19-2004
Thu, 02-03-2005 - 2:02pm

>>>You know I just get this sense that the American family is getting screwed. Corporations make out like bandits, and as they say, the rich just keep getting richer.<<<

This is true, but corporations only make out like bandits if we let them. Everyone should be taught in high school how to manage a personal budget, balance a checkbook and how credit works - specifically that if you leave beyond your means or max our your credit you will be screwing yourself. You credit score, your ability to borrow money and your leverage to negotiate good credit card terms are all based on maintaining a healthy level of available credit. I never understood this when I was younger. I thought if I had credit I could use it. I didn't see the big picture, and I didn't realize that if I maxed out my cards I would not be able to get other one's at lower rates or pay them down because the interest was so high.

Right now I have around $40k in credit card limits with only $8,300 used up. $2,000 of that was charged in January and will be paid off as soon as I get my tax return (part of the down payment on my car purchase). $500 is for a new mattress I bought last summer and it's at zero percent interest and will be paid in March. The remaining $5,800 is sitting at zero percent interest until the end of the year. By the end of this year I should have $10k in the bank and $5,500 sitting on a credit card at zero interest. I will be able to pay the $5,500 off or surf it to a new zero interest card and use the $10k (plus any money I have in early 2006) to get into a small home or townhome in the summer of 2006.

Because I've gotten a handle on my situation (and now live within my means), my credit score is better and I have leverage to get my debt at zero interest. Even my car was borrowed at only 2.9% interest for the life of the loan. This is because the people who don't appear to need credit get the best credit out there. So right now, I'm not getting screwed and the large conglomerate companies are making very little money off me. I think I'm the one making out like a bandit. I just wish I could have figured this out from the beginning.

Photobucket

Pages