Life...Post Bankruptcy

What I would have done differently... I would have kept some type of spreadsheet, whether on the computer or handwritten of every creditor, name, address and phone number, account number, date opened, high credit, amount owed and any communication I had with them.  Seem like a lot of work but this information should be kept whether you get in financial trouble or not.  This information is absolutely needed when filing bankruptcy and if these accounts are old, it is hard to locate it.

Life is a bit different!

 

Adjusting to this new way of life has been interesting.  The new way of life I am referring to is not having to live in constant fear that our financial life will be rocked to the core.  That there are no surprises lurking around the corner of someone taking the very little that we have.  This is big for me because I have lived like this for so long that it is a huge sigh of relief to not live like that anymore.    Our financial life just seems to be more manageable because we are dealing more with exacts than surprises (and not the pleasant ones).  We learned a long time ago to live very simply so, right now, that is easy for us.  We learned a long time ago to do without many things, so, right now, that is also easy for us.

 

Granted, my “BANKRUPTCY RADAR” may be especially sharp right now, but people have some very different thoughts about bankruptcy.  I have heard people say that they just pay their credit card bills every month to avoid getting into this situation.  Others have said, “well it is too easy to get bailed out so people do not have to own up and take responsibility for their actions.”  While still others say that they would NEVER let themselves get into this mess!  Everyone has an opinion of those of us who file bankruptcy!  Hell, I probably even did in the past! But the hard, cold truth is that this could happen to anyone at any time.  It did not happen to us because we were stupid, naive maybe, but not stupid.  Just because this happened to us does not make us any less than anyone else however, I have witnessed that it does make some people feel superior over us.

 

Here is the thing…not everyone who files bankruptcy has the same problem.  Not everyone just could not control their use of credit cards.  It is the same as the assumption that everyone who is overweight is that way just simply because they eat too much.  The problem exists as to the “why” does an overweight person eat to much.  People who never have been overweight say it is because they do not care enough about themselves to not overeat.  Well, in bankruptcy the problem came into being as to “why” they could not pay their bills.  In our case, we lost the ability to pay our bills because we lost the income that we had when we agreed to the debt.  We used credit because we were led to believe that we had more assets than we actually had.  Then when our cash flow was also taken away with the loss of our major source of income, the ability to pay the debts became impossible.  With these two factors, anyone, anywhere would have the same problem and probably end up in the same situation.  But that is what others do not understand.  Situations can change on a dime and most people could not keep up with their current lifestyle, and that includes the ability to pay your bills, for very long before something breaks.

 

 

Frozen Bank Account

What I would have done differently…

I would have been shopping for a bankruptcy attorney as soon as I thought there was a possibility that bankruptcy would happen sometime in the future.  How would I have shopped?  I would have asked others who went through it for a referral, I would have done my homework on the internet and I would have interviewed the attorney’s based on their attitude towards my situation.  I would have found out how much it was going to be and I would have asked what the whole process was and how long it would take!

 

Help!  My checking account is frozen by a creditor!  What should I do?

 

This happened to us and was the deciding (desperation) factor in filing bankruptcy.  We went to use our debit card to purchase gasoline and it was declined.  We found out that a very old creditor was able to put a garnishment on our checking account.  I was a bit unnerved by the fact that someone could do this without any prior notice to us, but what the hell, nothing surprised me anymore!  The account was frozen and we had 7 days before all of the money we had (all 1027.00 of it) would be sent to this creditor until the whole $5000 was paid in full.  Seriously, how were we supposed to function?  How ridiculous was this? At this point we already had an IRS levy and a garnishment on my husband's paycheck, how much more could we take?

 

Talk about panic!  This had to end and it had to end now.  My first reaction was to file bankruptcy immediately. The sad thing was that our so called bankruptcy attorney did not bother to tell us the full story.

 

Did you know…that if you receive a garnishment against your checking account that there is only so much that they can take.  Well I did not know that, in fact, I did not find out until the bank forwarded the garnishment papers.  Who ever is garnishing you can not take the whole checking account.  I believe that every state is different but if you are having financial problems and are close to having a legal judgment against you, you might want to find out what the “exemption” is.  In the state I live, they can not take anything over $1250 in your bank accounts if you are the head of the family.  They also have to leave $350 for each dependent.  This is not an automatic exemption.  You have to go to the circuit clerk office or sheriff’s office of your city or county and file it.  It is granted automatically.  This is good information to know in case you get this far into problems. 

           

Another thing we learned is that if you go to court and make an agreement with a creditor, do not ever write them a check out of your working checking account.  The reason is because if you default even in the slightest way, they know where your account is and can quickly garnish it without you even knowing about it until it actually happens.  If they do not know where you have your checking account, it will take them a long time to find out.  Send them a money order from 7/11, it will protect you just in case things get worse.

 

Different Stages of Poverty

On this blog I can not give legal advice because I am not a lawyer.  But what I think may be helpful to anyone reading this blog would be a "what I would have done differently had I known what I know now" section.  If I could just help one person with this process, I would feel it was all worth it.

My "what I would have done differently" comment for today is that I would have acted and reacted quicker.  Instead of waiting and waiting for things to someday get better, I wish I would have recognized the point when things were so out of hand that I knew deep down inside we would never be able to recover.  That point was when I could no longer open the mail as soon as I got it and when I had to change our telephone number.  There were so many calls from bill collectors that we would not answer the phone when it rings.  Still to this day my family doesn't answer the phone when it rings.  This is the point when I should have acted.  Filing bankruptcy was always an option.

Here is the thing, when you become bankrupt, it means that you had something and lost it.  Having and losing it is a different kind of poverty than growing up in poverty your whole life.  I never grew up in poverty.  I do not know the ways of impoverished people.  I am not saying that anyone is better off if they grow up in poverty or became impoverished through losing everything.  I do know that there are systems in place that are passed down generations for people who are raised in poverty that teaches and helps them cope with poverty.  Again, I do not mean to insinuate being poor is any easier or harder based on when it happens in your life, but what I am saying is that I do not know what it is like to live in poverty your whole life.  I only know how to live in poverty after you have lost everything.

 I have said to my friends many times that I am not good at being poor.  Maybe, in the long run, that will help me.  And then again, to put it in perspective, two thirds of the people in this world would love to have what I call poor!

The bankrupt holidays

Well another holiday coming to an end and I have to say...Good!  Please do not misunderstand, I love Christmas and the real meaning behind Christmas.  I celebrate the birth of Jesus and love the meaning behind this holiday.  However, in this world we are surrounded by the other meaning...PRESENTS!  The commercials on TV, in the mail, on billboards, in the newspapers are everywhere.  There are commercials on TV about giving a car all wrapped up in a red ribbon!  The commercialism for the Christmas holiday is unbelievable!

That said, it is also a reminder about what little you have.  You also see endless stories about giving to the less fortunate and making people who have fell on hard times have a "good Christmas".  Believe me, I am all for that.  In fact, in my pre-bankruptcy days I was one who always gave to the less fortunate and people who needed help.  But you see, if you have been bankrupt, chances are you do not have too much but you are not considered "less fortunate".  How many years do I have to tell me kids that I do not have ANY money for Christmas presents?  How is this going to affect them later on in life?  How many times do I explain to them that it is not about the presents?  It truly would not be such a big deal if the rest of the world did not make it such a big deal...or would it!

When family and friends tell me that they did not have very much money to spend on Christmas this year I find myself feeling compassion for them because I know how they feel.  Then I see what their kids get and can not believe it!  Then I realize that what "not very much money" means to most people means something completely different to me! 

Over the years, I have had "secret santas" that left money for us and I never found out who it was.  It is so overwhelming to receive gifts like that when you do not know who gave it to you! It warms my heart and the financial help is such a relief.  I know that there are so many people who need it more than I.  I know that our financial hardship is nothing compared to so many others and I appreciate those people who recognize quietly that we need help!  I only hope that some day again I will be able to give to those in need again.

We do not use credit cards any more.  We stopped using them about 10 years ago.  I know that if we tried we could probably get one but have decided not.  When you only have enough money to pay for your daily needs, how would we ever be able to pay a bill from a credit card.  Those days are over!  Our bankruptcy did not happen because we bought a lot of stuff for ourselves or our kids.  It happened because we used personal credit cards to pay for things for our restaurant business.  We believed we were in a different financial situation than we actually were and that we really could pay those bills.  Now we only buy what we have actual money for so most of the time that is nothing outside of our real needs.

The insensitivity that surrounds the holiday season for those that can not afford anything outside their daily needs is amazing.  I truly wish that we could go through the holidays just celebrating what the real meaning is instead of going through a month and a half feeling totally inadequate.

How it happened

The Family Business

My story is a simple one…sort of!  It wasn't just that I had credit cards that I used to spend a ton of money because that was not the case.  Instead, our problem came from a dream of owning our own business.   Fifteen years ago, my husband and I decided to buy a restaurant.  This was something that he always wanted to do.  Although we had no restaurant experience we thought we could figure it all out.  So, when his idea to own a restaurant came into existence, there was no stopping us. At the time I was a stay at home mom raising our two boys.  Admittedly, I was excited to be the “owner” of a restaurant as well!

I had the real estate expertise to purchase the building in which the business resided and was able to write a business plan to present to the banks for financing.  We were able to secure the financing through the bank that held our personal accounts.   Now mind you, we had very little money to work with but we were able to secure the loan for the property.  To this day, I really have no idea why the bank decided to go out on such a limb for this endeavor, I mean everyone knows that the restaurant business was the toughest business to be in.  Silly me, to be all puffed up with pride because I felt so privileged that the bank lent us the money...they must have thought we were so special that they invested in us!

I must interject at this point that at the time we bought the restaurant, we had perfect credit, had a 6 room house with a small mortgage, 5 automobiles all paid for, a decent income (by our standards), a stock broker with a stocks portfolio and a pretty good financial life.  When we bought the restaurant, my husband had to officially “personally guarantee” almost everything we bought because he was the one with the income.  Every vendor account, every utility and insurance purchased had to be personally guaranteed by him.  We never really thought about the impact that it could have on us someday that we were literally signing our life away.  What the heck, we just believed that we would continue to rise up from day one of the business opening.  I remember saying to someone after the first month we were open that I was able to pay all the bills and still have money left in the account!  Little did I know that it was probably the only month that would ever happen.

The business should have closed probably after year two.  The successful business that we had dreamed of just was not happening!  Our business after 9/11 dropped off considerably and we had no clue on how to get it back.  We constantly needed money and the bank was right there, every time, to hand us a check. BANK “You have plenty of equity in the building, no problem!” ME “ Are you sure because we are spending so much of our own money and are counting on getting it all back.” BANK  “No problem, you have PLENTY of equity.” 

When year number 5 came along, we were deeply in debt, behind in our taxes, unable to renew our liquor license, had a couple of payrolls bounce and many, many more problems. We had no choice but to close the doors. It was an excruciating decision.  It was like when you are at the casino and have lost all that you brought with you but the thought of walking out of the casino empty handed was not good enough.  So then you go to the ATM and pull more money out in the hopes that you can turn it around and win some money to at least break even.  I am not a casino gambler but have gone occasionally so I know the feeling is the same. 

 One week after the decision and announcement was made to close, to our complete and utter surprise,  my husband permanently lost his job of 21 years!  The income that we lived off of and helped support the business was now gone.  I ran the restaurant and was never able to pay myself a salary and that was OK with me at the time because our family was financially supported by my husband’s salary.  Now we had nothing but unemployment for him coming in for a while. 

Talk about scary!  But I just believed that things would turn around.  Like many others in the same situation, you just think things are going to turn around!  At this point, you still do not make many changes in your lifestyle because you just think things are going to turn around!

 

Being a Bankrupt American

Wow! I am a Bankrupt American

As I am sitting in a psychiatrist’s waiting room with my 15 year old son, I am staring at a breathtaking painting of the ocean with a beautiful  port and some gigantic cruise ships, when I suddenly realize that I might not ever get to experience this scene for real. I will never be able to go on fabulous vacations, visit other countries, buy a boat, a house or even own a new car.   It was probably the first time in my 52 year old life that I felt like so many things were out of my reach.  For a moment, I felt so sad, so very deeply sad!  This feeling of sadness was not a new one, in fact, it was all too familiar.  So familiar that I just get sick and tired of feeling it.

According to Webster’s Dictionary, the definition of BANKRUPT is:  1. A person who becomes insolvent (unable to pay debts as they fall due in the course of business, having liabilities in excess of a reasonable market value of assets held, not up to normal standard) 2.  A person who is completely lacking in a particular desirable quality or attribute.

I am an American who became insolvent!  Wow, just that description overwhelms me. It happens to so, so, many people!  People who had good jobs, worked hard to support their family and then lost their jobs and could not find work. So many of us who are considered “underemployed" because we  took jobs at a fraction of what we were making before losing a job.   So many of us who cut back on as many expenses as possible to try to make ends meet.  So many of us who accepted credit with a promise to pay because at the time we could afford to fulfill that promise. So many of us who had medical issues either with or without insurance which financially wiped us out.   So many of us who were living the American Dream until the bottom of our lives dropped out. 

So many people who have had their lives turned inside out, upside down and totally destroyed because of financial woes and then dealing with what prevails as a result of those financial woes.  How many of these people’s children won’t be able to apply for student loans to go to college because their parents are or were bankrupt?  How many people can not have access to good housing because of bankruptcy or foreclosure?  How many people can not have a bank account so that they can cash their paychecks and instead have to pay huge fees just to use their money?  How many people are hiding their money problems from their friends and loved ones, living a lie and hoping no one will find out?  Many, many more than you would know.  In this society we live in where everyone tries to be better than everyone else, it is a secret that people move heaven and earth to keep to themselves.

They are everywhere!  They are standing in line behind you in the grocery store, they are sitting next to you at the baseball game, they are in the car behind you picking up your kids from school, they are sitting next to you at church because bankrupt Americans are everywhere! They are all trying to pick up the pieces of their broken, difficult lives while trying to keep as much of their lives the same as possible.   They are bankrupt and having to live their lives under a different set of rules than most other Americans because, you see, once you become bankrupt, all the rules change. 

In the process of becoming bankrupt, you keep trying to stop the bleeding!  You keep thinking that you are going to turn the corner and things will get better.  You hope and pray that this financial situation will end.  You hope no one will notice. And then the day comes where you can not hide it anymore!!!! 

It has been a very rough 5 years.  Yes, the writing was on the wall for several years before but it was written in a language that I did not understand. I didn’t understand because I truly thought that I could never fall so deeply that my entire life would feel the impact.  I truly always believed that things would get better, in fact, I lived my life with that belief. My future thinking, instead of taking care of the present,  stopped me from healing much sooner than I could have.  Sometimes I think that it might have been part of my downfall.  I was always looking toward the better financial days.   But better financial days never came.