Bankruptcy - anyone gone through it?

[Dayze]

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

[Saul Good]

Originally Posted by btlook1

Hey guys I enjoy reading about all this stuff keep up the good conversation and I might just learn something.
Which Dave Ramsey book? He has several but which one would be the best to get me out of debt and squared away? Thanks for the info!

As R8ers said, The Total Money Makeover is pretty good. Don't expect anything exotic or mind-blowing. It's ridiculously simple, but that's kind of the point. I can pretty much sum up the entire book:

1. Pay nothing but minimum payments until you have $1,000 cash to hide under your mattress in the event of an absolute emergency.

2. Pay the minimums on everything except your smallest debt. Spend no money an any luxuries whatsoever. Take a second job temporarily if you can. Have a garage sale and sell all of your junk that you don't need. Take as much money as you can squeeze out of your budget and pay the smallest debt off asap. Once that is done, take the money that you were putting towards that debt and start working on the next smallest. Every time you pay off a debt, it gives you more money to pay towards the next one.

3. Don't ever borrow again.

That's the crux of it. Obviously there's a lot more, but those three steps are a pretty good thumbnail.

[Saul Good]

Originally Posted by mmaddog

It appears neither of you have had a devastating health problem or you wouldn't be so sure that having insurance will take care of everything....even with insurance all it takes is one catastrophic health issue and everthing you have can be reduced to nothing.

And you need to be damn sure you know your policy inside and out....there are many who don't know the fine print and then later get surprised by something they thought was covered, but isn't.

Being confident is good....being naively over-confident can have devastating consequences.

I guess what I am trying to convey....nothing is a sure bet. Life experience has taught me that even the best prepared are sometimes caught flat-footed.

mmaddog
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This is true of an individual policy, but it's just as true of a policy you get through your employer. If you get brain cancer and your insurance policy sucks, it's not like you aren't just as wiped out if you were working. If you're disabled and can't work, you'll lose your job anyway.

I recommend a high-deductible plan that is 100% out of pocket for the first $3,000 or so and 100% above that. The premiums aren't bad because you may never file a claim. Worst case scenario, you're out $3,000. Even if you're broke and can't come up with $3,000 right away in the event of a catastrophe, it's not going to bankrupt you.

[R8RFAN]

Originally Posted by Saul Good

This is true of an individual policy, but it's just as true of a policy you get through your employer. If you get brain cancer and your insurance policy sucks, it's not like you aren't just as wiped out if you were working. If you're disabled and can't work, you'll lose your job anyway.

I recommend a high-deductible plan that is 100% out of pocket for the first $3,000 or so and 100% above that. The premiums aren't bad because you may never file a claim. Worst case scenario, you're out $3,000. Even if you're broke and can't come up with $3,000 right away in the event of a catastrophe, it's not going to bankrupt you.

Absolutely, this is what alot of self employed people buy. It's much cheaper because the deductible is so large but will save your arse if you have a major trip to the hospital. 3000 bucks ain't much when you have a 50k heart attack

[R8RFAN]

Originally Posted by mmaddog

It appears neither of you have had a devastating health problem or you wouldn't be so sure that having insurance will take care of everything....even with insurance all it takes is one catastrophic health issue and everthing you have can be reduced to nothing.

And you need to be damn sure you know your policy inside and out....there are many who don't know the fine print and then later get surprised by something they thought was covered, but isn't.

Being confident is good....being naively over-confident can have devastating consequences.

I guess what I am trying to convey....nothing is a sure bet. Life experience has taught me that even the best prepared are sometimes caught flat-footed.

mmaddog
*******

nothing in life is guaranteed, do the best you can with what you have and use your resources wisely and take care of what you own.

No matter how much insurance you have or money or whatever, we are all gonna die.

[vailpass]

Dave Ramsey= financial planning for 5th graders. I guess if you never had a piece of financial guidance in your entire life you can go back to square one. I give the guy credit, he has made a killing off of teaching adults the alphabet.
Not a single high achiever has EVER followed his formula. Credit is an irreplaceable tool when leveraged correctly.

[R8RFAN]

Originally Posted by vailpass

Dave Ramsey= financial planning for 5th graders. I guess if you never had a piece of financial guidance in your entire life you can go back to square one. I give the guy credit, he has made a killing off of teaching adults the alphabet.
Not a single high achiever has EVER followed his formula. Credit is an irreplaceable tool when leveraged correctly.

He followed his formula and is a multi millionaire

Debt is dumb, Cash is king

[Fairplay]

Originally Posted by Saul Good

As R8ers said, The Total Money Makeover is pretty good. Don't expect anything exotic or mind-blowing. It's ridiculously simple, but that's kind of the point. I can pretty much sum up the entire book:

1. Pay nothing but minimum payments until you have $1,000 cash to hide under your mattress in the event of an absolute emergency.

2. Pay the minimums on everything except your smallest debt. Spend no money an any luxuries whatsoever. Take a second job temporarily if you can. Have a garage sale and sell all of your junk that you don't need. Take as much money as you can squeeze out of your budget and pay the smallest debt off asap. Once that is done, take the money that you were putting towards that debt and start working on the next smallest. Every time you pay off a debt, it gives you more money to pay towards the next one.

3. Don't ever borrow again.

That's the crux of it. Obviously there's a lot more, but those three steps are a pretty good thumbnail.

Too complicated for me.

[Dayze]

we scouted a few rental homes today; drove around for about 5 hours. But, we have a rough idea of what to expect as far as where we think we'll live; and what we can get for our money. I'm balacning the need for space/location with the cost. Obviously, i want to rent for only as long as it takes to get back on track (savings, 6 month emergency, debt free ). we found a few that are 1/2 of what our mortgage is (was). We can apply most of that differce to debt.

I've figured we can knock out 4 of the the 'small cards' (card with chicken sh*t amount of money on them, but 'money on them' nonetheless) in abotu 4 months. by this point, I'll be 7 months away from paying off the car; so these 7 months will be used to pay off the next card; then when the car is paid for, apply that $ to the next etc. I figure in about 20-30 months I can have no unsecured debt. And at that point, only about 6 months until the wifes car is paid in full.

so....adjust our thinking and mindset for the rest of our lives; and we could be debt free in 36 months. Then, concentrate soley on rat-holling money for a down payment on a hosue; and building up retirement in a ROTH etc.

I think my wife has finally come around; she's starting to speak and sound like she's thinking about he long term/next 10 years + and not the 'now'. She perked up when I told her we could take all the moeny we're wating on cards /creditors etc...and pay 'ourselves' in the form on savings/cash on hand and retirement. There is no way, if we somehow could stay in this house, we would ever have the money to retire.

[R8RFAN]

Dayze if you two are on the same page, you will get there, keep the faith.
Go to the card with the lowest balance, regardless of the rate, pay it off first, then take the money you were using to pay that card with and add it to the 2nd highest balance card.... then repeat the process Dave calls it the debt snowball, print this page out and tack it to the fridge

[The Bad Guy]

R8 and Saul,

I commend both of you for the excellent advice on this thread. You have provided invaluable advice for the OP and anyone struggling.

The only debt I have right now is car loan and student loans thankfully. I just paid off my last credit card balance. I do charge things every month, but I pay them off.
I have a nice chunk of change in the bank to put down for our first home and recently welcomed a newborn last month.

The only thing that doesn't really apply to everyone that you're saying is that both of you said you make over 100k a year. You are definitely not the majority in that regard. Do you think you'd have the same financial success if you were making half of what you are?

[R8RFAN]

Originally Posted by The Bad Guy

R8 and Saul,

I commend both of you for the excellent advice on this thread. You have provided invaluable advice for the OP and anyone struggling.

The only debt I have right now is car loan and student loans thankfully. I just paid off my last credit card balance. I do charge things every month, but I pay them off.
I have a nice chunk of change in the bank to put down for our first home and recently welcomed a newborn last month.

The only thing that doesn't really apply to everyone that you're saying is that both of you said you make over 100k a year. You are definitely not the majority in that regard. Do you think you'd have the same financial success if you were making half of what you are?

Thanks, just trying to help


I haven't always made this kind of money and I live like I make 30k a year anyway basically.... about the only thing I think would be different for me is my house would not be paid for but the payments were only 517 per month but I probably would have stayed in that 179 dollar a month trailer I bought in 1993 longer and bought less house than I did.

I love to see people do good in life, less stress = better life

I actually use a credit card from time to time but I never carry a balance. The main thing I use a credit card for is to pay my server bill for my websites

[Mosbonian]

Originally Posted by The Bad Guy

R8 and Saul,

I commend both of you for the excellent advice on this thread. You have provided invaluable advice for the OP and anyone struggling.

The only debt I have right now is car loan and student loans thankfully. I just paid off my last credit card balance. I do charge things every month, but I pay them off.
I have a nice chunk of change in the bank to put down for our first home and recently welcomed a newborn last month.

The only thing that doesn't really apply to everyone that you're saying is that both of you said you make over 100k a year. You are definitely not the majority in that regard. Do you think you'd have the same financial success if you were making half of what you are?

Frank:

I don't disagree their advice is good....but unfortunately your last paragraph hits the nail on the head. The number of people making a 6 figure salary is small and the number of people, even those debt-free, who could survive a catastrophic circumstance in their life is even smaller.

And the only thing I found irritating was what appeared to me was a smug attitude...I know a few others don't agree, but that's ok.

mmaddog
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