Bankruptcy - anyone gone through it?
 

well, after a 12 month fight with our mortgage company and creditors; exhausting all savings; cashing out 401ks; stopping 401k contributions.....

it appears the end is near. We are being foreclosed upon 10/15/09.

our lender has being jerking us around for 5 months with a loan modification and I was informed today by the VA that even if the mod is approved, it will likely be a very miminal impact to our monthly commitment/cashflow etc.

Anyone have any suggestions, opinions on the matter? It's really tough right now.

Thanks guys/gals.

Dayze

Didn't actually declare BR, BUT I was there.
Snorted everything I made up my nose, and what was left I popped in pill form or drank away and lost the ****en farm for it.
9 years later things changed.
You'll feel lost for a while, but only for as long as it takes to you to come to the conclusion you KNOW you will bounce back.
I lost not quite $400,000 in buisness/home/marrige.
Now I own my own buisness again, and qualified for a mortgage
It's hell.
I ain't gonna lie. But don't roll over and play dead.

good advice.
We still have a small, small window to make a decison but I definitely wanted to get some input etc.

If there's ANYother way take it.
Most lenders will settle for what you can actually show up and give them.

Dayze i am so sorry for you.

I remember not that long ago it about your job situation was in dire straights.

I really hope things turn around and get better for you and yours.

Its got to get better.

I thought about it a while back but after talking to an accountant I decided against it.The few people that I know that have went through with it,wished they hadn't afterwards.
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I've got a client who lives in the KC area who is going through a similar situation. If anyone knows of any good bankruptcy attorneys in the KC area please let me know.

At some point you have to know when things are upside down to a point that you can't sustain it. Check out my website, and feel free to hit me up for a rundown of where you're at and what your options are, cost and obligation free of course.

www.thenegotiationstation.com

Sorry to here this man. My sons mom and her husband are about to go thru this. They were denied a modification, now they're facing foreclosure.

Thank man; I really appreciate it. :clap:

basically, our last option is to scrapte together about 5 months worth of payments; and pay in full to pull out of foreclosure status. This will be VERY challenging, but we're going to try to do it. If we can, we'll pay the unsecured people what we can pay them each month; knock out cards one at a time. I think we'll eventually get out.

I had planned on paying my car off to free up the payment from a cashflow perspective, so if I can manage to hang on/make the payment until this time next year it will be paid off on time. Then, I can start snowballing the the freed up cash onto other debt.

gonna be rough, but F it....worth a shot.

Good luck bud. It can be difficult, but it's been proven that it can be done. Just know when to throw your cards in if it comes to that. Otherwise you'll be hemorrhaging money with nothing gained.

sounds very similar to our situation. Talked to the VA and they said that with the fees involved etc, the loan mod (if approved) probably wouldn't net much of a reduction in payment - if at all. We've been in a holding pattern for this mod process since May; where we were told (I've requested teh transcripts of the call; i have the employee name and ID number; date etc) we didn't need to make a payment until Oct 1 while the mod process was going on. Shame on me for not spotting a potential problem right there. But oh well; can't change it.

We've just decided we should make the payment and pay what we can on the unsecured stuff each month with the $ left over after secured debt. If they want $50, but we can only give $25...F em. They can eat it as far as I'm concerned.

eventually those bastards will be paid off; staring with the small ones.

Yep. This is sort of our hail mary pass.
if it doesn't work, then we've no sh*t done everything we can to try to avoid it; and I'll have no problem doing it at that point.

I respect you for trying. Many people cut and run and this point. Good luck.

Well...I can't help you much.

But here, have my $12K in Casinocash. You may be up against it in RL, but you're now a rich man in the CP gameroom ;)

Sorry man. I'll say only this: I know a person that had to go through it. He said it was brutally painful for a year or so, but it was the best thing he ever did when it came right down to it. Sometimes a clean slate makes all the difference.

I don't know anything about your situation, but good luck you'll need it.

If I were you, I'd liquidate anything of any value at all to get ahead on your payments.

You mentioned a car, I'd start there.

Seriously, man, good luck.
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Go to Vegas and put it all on black and double that shit BABIEEE!!!!!!!!!! If you dont win theres plenty of cheap houses there too I hear.

Seriously, that sucks bro I hope you guys make it out ok

How do Bankruptcies work anyways?
Do the loan companies just have to eat the debt?
Or does the government step in and pay off the debt?

Have you looked into renting a room out in your home?

I think we’re exploring two options.

1. Getting current with our mortgage; it’ll be a damn miracle if we can get the $ together to get current; then subsequent payments will require possible 2nd job/selling stuff etc. Normal stuff to day when trying to save a house So if we go this route, we’ll have zero cash; everything will be allocated simply to stay in the house.
2. I’m trying to find out if my VA loan insures the vendor against negative equity. Ie; if I owe (for math purposes) 100, and they foreclose on it for 50….can they come after me for the 50: or have they been covered by that through the VA
a. If they have been covered,
i. it comes down to do we want to stay and not have a nickel to our name cash wise (because we would’ve given it all to the bank to get current)
ii. I’m half tempted to tell them to get bent after all the crap they’ve put us through. Give them my final offer and if they don’t want to take it, F em. I’ll move and they can sit on the house for a year. I’ll deal with the foreclosure and build credit again eventually.
iii. Search for a FSBO/Contract for Deed; or a new builder Contract for deed. Live there, rebuild credit; buy the house in a 5 year term.
b. If that piece is not covered, then option one is the best bet. Avoid foreclosure and any judgments for outstanding fees, negative equity.

We’re talking with an attorney tonight to review etc. If Option 2b is the case, then I hope he can submit something that can postpone the sale/foreclosure until we can get a determination on what the loan mod will be.

Hell…I’ve heard that sometimes after the penalties etc that the loan mod doesn’t even reduce the payment; in which case we’d be boned. And if we’re boned and have to leave, I don’t want to have given the bank our last chunk of cash.

Did you ask your mortgage company if they'd take a deed-in-lieu of foreclosure?

Dayze, I'm so sorry to hear of your situation. I, like others, admire your desire to make it work out and do the best you can to save your home. For what it's worth, I'll keep you and your family in my prayers.

I don't know if the situation applies to you or not, but I do have a friend who is in the business of helping people get banks to approve short sales on their homes. One situation in particular had a family looking to modify their loan but they would only get a 100 dollar a month break (from $2700 to $2600), which did them no good. Plus if they modified the loan they would have still had the debt hanging over their head.

He worked out a deal where they did a short sale, which an investor purchased for $110,000. He then worked out an arrangement with the investor to rent the house back to the former owners for a rent of $1,500 a month. Now they can make their payments, stay in their homes, and actually set themselves up to get back in the market again in about 3 years. If they keep their record clean and stay on time with payments, they could potentially buy back the house for $175,000 and STILL have a lower payment than they did before, not be leveraged up to their heads in debt, and stay in their house.

Obviously that's a tricky scenario, but there's always hope.

not yet; I want to wait to see what the loan mod out come is. if they decline it, then that might be a possibility; from what I understand the DIL (if agreed by the lender) would absolve you from any defficiency? cheaper for them to cut their losses than go through with foreclosure;etc.

if they decline the mod we will have to make the decision to liquidate all remaining cash; or ask for DIL; if they decline the DIL, then it's foreclosure.

that's an interesting scenario to consider. that's something else I should probably look into. Thanks!

:doh!: $1500 rent on a $110,000 house....DAMN...sign me up for a few of those.

How in the hell where there payments 2700 a month. Even they paid $200,000+, I still couldn't see getting close to those payment

I'm often called morally bankrupt whatever that means.

ROFL
sometimes that's a good debt to have.

I know I've walked that line.

Find a life sized dummy. Dress it up like yourself in your clothing, drive it off a cliff so that the dummy is burned beyond recognition. Have your wife use the insurance money collected to pay off your debts. Assume a new identity. It's quite simple really.

Brilliant!
:evil:

Too bad you cashed in the 401k, I don't think they would be able to go after than in a bankruptcy. Depending on your state you may be able to get out with the house and one car as well.

Good luck.

They refinanced themselves up to the height of the value of their home...over $340,000...

Dayze it would be good to find someone to be your go-between if you negotiate a short sale...someone who is fighting for you but not emotionally connected to the situation.

I agree.

I’m in the process of finding out if they will be willing to do a Deed in Lieu of Foreclosure (thanks MahiMike for the suggestion).

I contacted the VA to determine if a foreclosure were to go through, could the lender pursue any negative equity from me after the foreclosure. They advised ‘no’. The only thing I might be on the hook for, would be any overage with the VA in order to use a VA loan in the future. I would have to resolve this before I would eligible for a VA loan. Apparently around 25% of the loan amount covers any potential negative equity. I’m 99% sure this 25% would be enough to cover me from a future VA eligibility standpoint. But either way, the lender wouldn’t be coming after ‘me’.

I’m basically at the point where I’m going to request a Deed In Lieu of Foreclosure; or they can have the GD thing through the regular foreclosure process. Especially upon learning from the person handling my VA case that the loan mod will most likely not reduce my payment significantly enough to actually ‘help’ in continuing to make payments. He said after they tack on the missed payments and any penalties, and the small rate reduction they would apply would probably only effect my payment by $50; $100 at best; it might even increase. He also said he can’t recall ever seeing a lender simply move the missed payments to the back end/deferred.

So, either way it looks like we’d have to move. It seems it would make more sense for them to do a DIL because they could sell the property immediately, rather than waiting through the 12 month redemption period of the VA loan in order to sell it. Not to mention saving the costs of going through the foreclosure process. But, even if they won’t do DIL, fuck em. They can have it.

While we have scrapped together enough to get current, I don’t trust Wells Fargo. The money will obviously go towards unrealized interest, and not effect principle; our payment most likely wouldn’t change/might even go up; so we’d be right back in the same spot we were in last October. Only next time we fall behind, we might be out on our a** with zero cash – since we used everything to get ‘current’. Not to mention we calculated that each of us would have to work about 25 hours per week at a part time job simply to break even each month.

DIL, or foreclosure. Either way I’m ‘done’. We’re going to spend Saturday driving around looking at other areas – trying to find contract for deed type FSBOs/Builder etc. Or, worse case, apartment / townhome / rental etc. a Temporary fix to get debt back down (debt incurred because of 6 months of no job), restore credit etc. We’ll get back in the saddle in a few years and may be better off than if we were to stay.

We fought the good fight, but it’s time to realize we shouldn’t go into the next round.

sorry to hear the news, man. I wish ya the best of luck.

Thanks to my cheating whore of a wife Im getting ready to go through it as well.

I thought you could keep the house in a bankruptcy.
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I went through it about 20 years ago - the result of youthful irresponsibility and stupidity. I'd gotten myself so deep in debt that I had no other choice. I went to one of those debt consolidation places and the guy said "You're ****ed, file for bankruptcy." Took a long time to recover, but I've got excellent credit now. IIRC the interest rate on the first car I bought after that was 33%. Ouch.

You can under protection laws; mainly Chapter 13 I believe. You’re basically agreeing a payment plan with those assets that are protected and no liquidated; and you make those payments to a court appointed trustee etc. And, from what I’ve read (correct me CPers if I’m wrong), if you for some reason violate the payment plan (miss payments etc), the assets can move to an unprotected state and would be fair game to pay creditors etc.

Since we don’t have kids etc; moving isn’t AS big of a deal. And, if the lender would do Deed In Lieu of forclosure; basically give the house back, they agree at that point they won’t pursue any penalties etc…and the remove the foreclosure status. You could move, get into a rental or contract for deed home etc at a rate that is affordable; get yourself back on your feet etc. at that point, the pieces of your credit you’re trying to restore are merely any late payments etc. Much easier to restore than a foreclosure or bankruptcy (although even those are recoverable…they just take a lot longer).


Each scenario is different/what works best for everyone.

I would imagine if you had 3 kids etc….maybe filing for Ch 13 protection might be the better route etc.

Dayze, I have a possible solution for you. Can you play RT?

Lol.
ROFL
I bet it could I’m only 6’ and a soft 235….but I have a high motor, and a nasty streak about me.

Teams haven’t looked at me very much since I tweeked a hammy at the Combine.

had some friends in trouble, they found roomates off of craigslist thought seem to be working out.

Just watch yourself, get everything in writing before you agree to it. I don't proclaim to know a lot about this, but I do know that when it comes to people getting money owed to them, they will do whatever it takes to get it, even if it means lying straight to your face. Also be wary of any service that says they will "help" you, sometimes they will leave you worse off than you already were.

Remember one important thing, the ONLY person who will be looking out for your best interest is YOU.

That bitch!

:mad:

Absolutely.

If they would agree to do it, I would have their offer contract for the DIL reviewed by an attorney to cover me. if there is any language in that contract that is open-ended in their favor I would have them change it etc.


Been there - having someone tell you one thing, then it comes back to haunt you. That’s how we ended up in this mess when they told us (I’ve requested the transcript of the call…..but haven’t been told yet if they will provide it. They said they would ‘review’ the call…..suuuuuuure.) to not make a payment during the loan modification process for July, Aug, Sep; and to resume on Oct if we paid June’s in full. Which we did. Well…by doing that, we not only entered in the foreclosure process…but we screwed ourselves because now we’ve missed a payment. Therefore, virtually no one would refinance, we don’t qualify for the Obama recovery (whatever it’s called) because we’ve missed a payment in the last 12 months. So, basically at that point. Wells Fargo had us by the cajones; they know whe can’t refinance /go with someone else. They know if we want to stay, we have to play by their rules/terms.


Lesson learned.

That was one tough lesson.

How is your cheating whore of a wife? Anything new in that deal?

The great thing about bankruptcy is you can't buy jack shit you can't afford anymore...
Screw a FICA score pay cash
Good luck to you, you are not alone, many are in the same boat as you.
(not directing this at you but) Too many people are buying shit they can't afford and the best advice I can give to you is don't make the same mistakes twice

100% debt free (including the house) since 04/09
I make 6 digits a yr got damn near that much in my checking acct
I drive a 1000 dollar Mazda pickup truck everyday and can afford a 40k Truck
I live in a 1500 sq ft house but I could have afforded a 3000 sq ft
I have a Platinum card which carries a 0 balance
I could easily live off about 1200 bucks per month...

Life Is Good
Good luck to you,Not bragging,I sincerely hope you are in the same boat as I am one day, I am not rich but I have everything I want and need, life will get better for you if you don't make the same stupid mistakes you made to get in the situation you are in now.

Again, Good Luck

You make 6 digits? I thought you were a truck driver.

He's counting the two to the right of the decimal point as well.

Not really.

ROFL As a former long haul driver this one hit home ROFL

Truck drivers often think they make more than they do. They forget to deduct their expenses when telling you how much they make.

I don't know why anyone would ever feel the need to tell anyone else how much they make. Whenever someone starts bragging about how much money they make, especially on the internet, I assume they're lying.

He's not even long haul. He just piddles around for Fed Ex. And he lies too.

I am a LTL LINEHAUL truck driver for FEDEX and we average over 75 per yr to 90 ... then I own a big trucking website I make money on

OTR driving pays nothink like LTL

We are meet drivers which means we meet another driver halfway I take his freight back to my domicile, he takes mine to his

http://www.lbtpic.com/ebay/fedex_kw_t800_04.jpg

I am home every night, I have the same expenses of anyone on about any job....

Lunch Money

I understand the internet bragging stuff, but I also understand the internet envy stuff too

I definitely want to get to a point where I’m debt free.

The real kick to the onions with this deal is we did everything right 3 years ago when we bought the house. We only borrowed about 65% of what we qualified for etc. It just sucked bad when I had to take a job paying 40%less per year; and by the time I got the job, we had racked up debt; . It took every bit of unemployment simply to pay the house payment; my wifes income covered the other secured debt; gas, food, even some utilities had to be put on credit.

I want to get past this; begin restore credit (hopefully only restoring late pays etc and not a foreclosure) and get out of unsecured debt. Then only enter into a small practical home.
Our current house is nice, but too big for the two of us anyway.

Friend, restoring credit is not your first priority, there is no shame in renting until you are financially capable of being a home owner.

If you spend your life worrying about a FICA score, you are spending your life worrying about what to put on credit next..

I did it before, I was up to my ass once before, thought I deserved this or that just because I worked, then I realized I deserve nothing I couldn't pay for.

Now when I buy a car, it's cash, a boat it's cash or anything else I want... My credit score is falling like a rock because I have no debt and I am no longer important to them unless I am paying payments and debt...

I could care less about credit, it's good for one thing... To buy a house at a decent rate, other than that they can keep it.

Bank your money, save up 20-30k while u are in bankruptcy... when you are able to buy again, put the big payment down to avoid PMI then get a 15 yr note that is no more than 25% of youy NET household income per month

can I ask you what the % of your NET income the house payment is or was?

Your story is all too common. What I like is your attitude through this, that you're looking to the future and have hope. You will recover and make a great future for yourself largely because that's your attitude. Obviously you recognize all the hurdles you have to success, though.

My wife and I never went through foreclosure, but we did have to move out here from Texas (I lost my job) and we couldn't sell our house in TX. We lived in a small apartment and had about $20,000 in debt. We took a class called "Financial Peace University" through our church (Dave Ramsey) and started taking the right steps. Budgeting, Emergency Savings, Debt Snowball, 3-6 months savings, insurance, investments, giving, etc...and now we still struggle but we only have about $1,500 in debt, our car is paid off, we own a home (which in Southern California is not easy...well wasn't), and are moving forward.

I can't imagine how tough this is for you guys and I really am sorry to read...but you'll get back on your feet again.

Preach on brother Preach on

Dave Rocks!!

This is great feedback in that cash is so powerful now. Find a way to stash as much cash away as you can and any credit concerns will be alleviated if you're bringing all cash or mostly cash to the table.

That’s pretty much our plan.

Pay off debt; rat-hole money, then get into a home for no more than 15 yrs.

Excellent posts, by the way R8rs.

I hope you get their friend, because I promise you, if and when you do, you will never go back and the feeling of having very little come out of your paycheck per week and having more money than month will become like a drug.

I always get what I need, I get mostly what I want, but once your though process changes and you realize creditors are NOT your friend and want your money, you think twice before you will sign your name.

I am not rich, I have a wife and a teenage daughter, I may die with a crapload of cash for my wife and daughter to spend.... who cares, thats who I would want to spend it.

When you are forced to pay cash, you will learn to save...

I will give you my opinion on bankruptcy though, if you do it, do it all the way, don't do that pay off the creditors crap and do not consult one of those credit consolidation or get out of credit card debt or similar companies....

Or any of those negotiate your payments company, they will take your money and just do what you can do for yourself.

You credit will be smashed either way, house, utilities, car to get to work other than that, screw the unsecured debt.

Go buy the book Total Money Makeover by Dave Ramsey

Thanks for the input guys.
The thing I’m trying to emphasize to my wife is; we WILL make it through this.
Sure, we will need to make concessions as far as where we live, or not having the ‘popular’ car etc…but we will get out. The ultimate goal (I’m trying to get her to understand) is not going to happen in 2 years. 3. Hell, maybe not even 5. But we can be debt free.

At that point, who gives a sh*t what our credit score is. Doesn’t matter with cash. That’s one reason I’m not too worried if we do go through foreclosure and it shows up on our credit. Big deal. My goal (“If you’re here, and I’m here…isn’t that “Our” time Mr. Hand”?) is to have no need for a credit score, except leading up to the purchase of another house. After that…back to a cash basis.

I trying to get her to realize that if you don’t do this, you become a slave to your chit/credit/credit card companies etc. You have no flexibility. Imagine how nice it would be to have large chunk of $ in the bank and little cash committed/going out each month – if you didn’t like your job….you could find a new one. One that didn’t drive you crazy. You wouldn’t “NEED” to make tons of money simply to cover the cost of financing all your stuff.
As it is now (with probably 90% of Americans I suspect), everyone is trapped. They NEED to stay at their job. The CAN’T quit. They must continue to go in order to PAY for everything they were too eager to pay cash for.

When we got in the house we had a reasonable house payment (compared to income); had money for a lot of things. Didn’t have unsercured debt. Then BAM…layoff. Uh oh. Now that ‘reasonable’ payment is n’t so ‘reasonable’.

She’s coming around slowly; I just need to keep stressing this stuff to her.

I have one of those negotiate your debt businesses and I'll tell you right now, that I don't misrepresent myself or the purpose of my business to anyone, anytime. Yes, if you use a company like mine your credit is going to be shot, if it's not already. But the fact is, the only people I can help are the ones that are on the verge of falling apart anyways.

Yes. A lot of companies in my field are inexperienced, and simply don't care about the results they provide after the money has been collected. Try not to lump all of us in the same boat though. I have years of experience in my field and have provided real results to people who otherwise would've had to file for bankruptcy and we saved them from it. Their credit must be rebuilt, but it went from a 10 year process to a 3 year process. And I have references who could tell you that I begged them not to pay me a dime and file for their bankruptcy protection because it was the only logical choice.

All I'm trying to say is, we're not all assholes that care about nothing but money. It's just not the case.

Sorry to tell you this, but playing with your toy trucks on your mom's kitchen floor does not make you a truck driver.

And why would I envy you, you're a Raiders fan FFS.

They can't eat you man, don't be scared, it's business and happens everyday.
Get away from debt, rent for a few yrs, act your wage, live well within your means and take care of the things you do buy.

Don't buy new cars, they depreciate 100 dollars a week for the first 4 yrs you own them on a 30k car

30k car
Payments 500 bucks a month
Depreciation 400 a month
Extra cost of the collision 100 per month at least

Shiny car costs you 1000 dollars a month to drive.

Stay away from credit and you will be able to do what I did in a few years.

I wish you luck
http://i40.tinypic.com/2yvoqoo.jpg

Not saying you are at all but I don't understand "the credit must be rebuilt" part... credit is what got a guy like this in the position he is in and people that do the job you say you do are enabling them to do the same thing that got them up to their ass in the first place.

I respect you as a person, but I don't respect the business you are in.

No you dumbshit, it does not cost you $1K/mo to drive that car, it just mean he's throwing the payment and insurance money into a hole.

God you are dumb

You're the dumb****. Explain to me when that other $500/mo comes out of your pocket.

Your 30k car is losing 100 dollars per week value for the first 4 years you own it on average. plus the car payment

New cars will cost you more on collision insurance...

You don't understand that?

Credit is a tool that should be used wisely. Just because so many people are unable to control themselves with it, doesn't mean that it is an evil entity. It's a matter of personal responsiblity, and education. I provide both as a means of avoiding a return trip to my office. As far as not respecting the business I'm in, that's fair. It's full of assholes, douchebags, and thieves. Which is why I felt the need to defend myself in the first place.

And all that means is the car is losing value as fast as you pay for it, which is true. Where you're losing me is when you say it costs an additional $500 each month, when does that money come out of your wallet?

If you truly are trying to help people then I am sorry if I painted with too wide of a brush.
I know I am weird to most but I see all credit as bad except for a 15 year mortgage with a payment of 25% or less of net income, this enables people to sometimes double up on payments and pay that house off early,become 100% debt free and live on what you make instead of being a slave to the lender.

I was dumb when I got a 30 yr mortgage, but I paid it off in less than 5.5 years.

I was not trying to offend you, it's just you are in business to help people improve their credit score, I am totally opposite, I don't want to have credit and think it is the root to most of American family problems including causing more divorces in America than infidelity

I want to see people prosper, I want people to be able to take a day off and relax without worrying if they are going to make the bills.

You buy a 30k car on credit, will probably cost you 40 by the time you get it paid off ,When you get it paid off you have spent 40 k
when you sell it after 4 years it will hopefully be worth 10k.

I didn't say you would totally lose 1000 per month but if you are making payments of 500 per month and your car is being devalued 400 per month and you are having to pay an extra 100 per month for the collision on it, that car is costing you 1000 per month.

It's all about cash flow

A car is something that is consumed or used up and everyday and every mile the car loses value. The less you pay and the more miles you get results in lower costs
Better scenario
Pay 10k for a good used car...Drive the hell out of it for 5 yrs, repeat

the money is coming out of your wallet when you wind up paying 40 for a car that costs 30 and you sell it for 10 if you are lucky in 4 years
That is if you put 15k or less miles per year on it....

I love to look on craigslist at the people who have cars with 180k on them trying to get half of what they gave for them

My car will be paid for in 11 months; thank god. Or, depending on how all this stuff shakes out I might be about to just pay it off and use that payment for cashflow.
Haven’t made that call yet.

I’m done with buying ‘new’ cars. Even though I’ve never owned a ‘new’ one per se, they have been 17-20k ish. Screw that. when this one dies (hopefully a long time from now) I’ll spend 8k on a 2 yr old car with 20k miles on it. And drive it until it dies.