Tuesday, April 13, 2010

The Toughest Post So Far

 
Hey Ya'll,

This will be a very personal post and it has nothing to do with the Lap Band or Weight Loss, so if you want to skip this post, I understand.

As I said, this will be a really tough post for me as it is very personal.  But I feel that it will be very beneficial for me to put it all out there.  If for no other reason than to get it off my chest and out in the open.  We have been dealing with this for quite some time now, and it has been very hard not being able talk about it to others.  I feel that we have been in the closet so to speak hiding our problems, and now we are coming out of the closet and airing them for all to see!!

I really hope that this doesn't change the way you, my fellow Bandster's feel about me/us.  This is something that many people feel strongly about, and may look down upon those of us that find ourselves in this predicament.

Yesterday, we filed for Chapter 7 Bankruptcy.  It was the last thing that we wanted to do.  We did major research and had all the options given to us by our Attorney.  We did of course consider Chapter 13 as one of the options available to us, but due to our advancing age and circumstances, decided that it wasn't the best solution for us.

Before you think that we are just using this as a way to get out of our debts, please don't.  We tried to work with the Banks that hold the 1st and 2nd Mortgages, as well as the Credit Card Company's, to try to get our payments under control.  But they refused to work with us.  After all, we were making the payments!

Probably the thing that started the ball rolling out of control, was one of my Credit Card Company's.  They raised the way they figured my payment amount.  It caused my minimum payment to triple in amount!! We're talking like from $300 to $900 per month (and this with a very low interest rate)!!  I had never been late with a payment, nor had I missed one!

So I called them to find out why.  They said that because of so many other accounts with higher balances defaulting, they felt that they needed to raise the payment amounts on accounts with higher balances, so that they would be paid off sooner!!  They refused to keep my payments at the agreed upon amount.  Up until this point, we were making at least the minimum payment if not more!   This of course happened shortly before the new law went into effect last year keeping the Credit Card Company's from screwing us over for no reason.  So they were penalizing me for others defaulting!   I had 2 different Credit Cards through this Company, so this happened to 2 of my Credit Cards!

Well about this time, Walt's income went down as well.   Our income has dropped by over half in the last 2-3 yrs.  He contracts with the State of California, and I'm sure that everyone knows the problems our State is having.  This put us so far beyond our income, that we began to default on everything, or at least paying way late!  This is when we started to look at what we could do. Only then, did they start to try to make different arrangements!!   But by then we were only able to pay the necessary bills like electric, food, water, etc.  If they hadn't been so unreasonable, when it could have helped us to work our way out of it, we may have been able to avoid Bankruptcy.

Like many that find themselves contemplating Bankruptcy, we never thought in a million years that it would happen to us.  After all, Walt is extremely well educated, with two separate degrees. One in Computer Science and the other in Chemical Engineering, plus a Master's Degree in Computer Science.  He has had great jobs, with great pay.  But we, like many other's, took advantage of the housing boom a few years ago, when our homes were worth double what they are now.  We refinanced our home to make the many upgrades that were needed.

We upgraded all of the bathrooms in our home, plus repainted the house inside and out (we painted the interior ourselves), and replaced all the carpeting with tile or wood flooring.  The only room we hadn't remodeled yet was the Kitchen.  We were planning on upgrading it in another year or two.  Plus we had our pool built so that I could have something to exercise in.  And due to my medical conditions, I needed warmer water, so we also had to add Solar Heating.  So just about every penny that we refinanced was put back into the house!

Then the housing downfall began, and our home is now upside down in value by about $125,000!  Not to mention the rest of the debt.  So after many months of soul searching and research, we came to the conclusion that this was our best and only solution.  We feel like we let ourselves down by allowing ourselves to get into this situation.  But now, all we can do is hold our heads up and continue on with our lives.  This along with Walt's smaller income has put us in our current financial problems.

We do not plan on using Credit again.  We plan on purchasing by cash.  We are adopting the philosophy that if we can't buy it with cash, then we don't need it.

We will be allowing the Bank to take back the house, and we are also giving back my Honda CRV.  This is why I am getting my Motorcycle license.   So that when Walt needs to drive the truck, then I can get around on the bike and vice versa.  We will also be saving up during the time we are waiting for the Bankruptcy to discharge, for our future home on wheels. Thus, no need for the CRV.  We cannot pull the CRV and the 5th Wheel, not to mention the bike!  One of us may have to drive it while the other tows the 5th Wheel as it is!!

Walt has been trying to convince me to downsize to an RV for years!!  He has wanted to live the nomadic life forever.  So now, we are planning on doing it!  We will be purchasing a used 36'-40', 5th Wheel that we can live in and pull to wherever Walt accepts work.  He has hopes to be able to find work in different States, allowing us to travel and see the Country while earning an income at the same time.  We may or may not put down roots along the way.  Walt's jobs usually last anywhere from 3 months to 3 yrs.

So for now, we have to wait until we attend the 1st Creditor's Meeting to find out what, if anything, they want to try to take to sell off.   Our Attorney believes that they won't want anything that we have, since it is so hard to sell.  Unless they can get at least $500 for each item, they won't bother with it.  So once we have the meeting, we have to wait another 2 months to see if any of the Creditor's will be disputing the Discharge.   If none do, then the Discharge will go through and we can breath a sigh of relief that it is over, and we can get on with rebuilding our lives.

So, if you have hung in here this long, I hope this doesn't change the way you think of me.  I am still the same person, though much more humble.  I know first hand how easy it is to get in over your head.

So, till next time...
Aloha My Friends

33 comments:

workinprogress said...

Oh Darlin!! The saddest thing about this post is that you think we will judge you!!!

I for one - have no right too.

This financial crisis has devastated many good people.

In my eyes you have acted with integrity and honesty. What more could anyone ask of you?

My thoughts and prayers are with you.

*hugs*

THE DASH! said...

I'm with workinprogress - NEVER would we judge you - you're our band buddy and we love you!!

I feel so bad for you guys, though. That things got so bad you had to go this route sucks and I'm sure you're not the only ones struck down by this. The world as a whole financially bites right now.

I love your idea of the travel though. Brilliant! I think it's going to be great for you. Don't forget us though as you roam around the countryside. We have grown used to having you around.
((Hugs)) mwah
Cara

Debi said...

Thank you!

I can't tell you how sad it made me feel to write this out today, I shed many a tear, and my eyes are still burning even now! But I felt it needed to be said.

Debi said...

Thank you Cara!!

I will still be on my computer as much as before. But maybe I will get to actually meet some of you as we move around the Country!

I just wish that I could meet those of you in Australia, England, Ireland, Dubai, etc, etc!!

Girl Bandit said...

I am with Cara and WIP...we won't judge you and I am sure that you did not reach this decision liightly...giving up your home and possessions is a huge undertaking. I don't understand the differences between the 2 Chapters being an Aussie. I wish you both the best of luck as you resolve this situatioon

Tina said...

This financial crisis stuff has put everyone that I know closer to the edge. We had so many gravy years it was quite a shock to get pulled up by our shorts when the economy tanked. Adding that to the whole fix up the house and then have your house not be worth what it was or even should be makes it all worse. I totally understand your situation and but for the grace go the rest of us.

The 5th wheel idea sounds like a blast---I yearn for the nomadic life too. I can't wait to hear all about it.

Tina

Debi said...

Thank you guys for understanding.

I will keep you posted as things develop.

Barbara said...

We love you to pieces Debi.. no judging. the economy is crap (did you see Sandy Lee's post on Bad things happening to Good People) you are not alone, many people are facing the same situation and we need to make choices. The good news is you have a plan.. remember take all the positive and move on.. life gives you lemons.. make lemonade!!big hugs to you and Walt.

Miss Vickie "The Queen Bee" said...

I am so sorry for your troubles. I do understand because I too had to claim bankruptcy when I got divorced 15 years ago. It took me a good 10 years to get my credit score back up. Stuff happens, move on. Good luck to you.

Jacquie said...

The financial crisis has touched all of us in some way or another. Please hang in there...you guys will get through this! We are here for you always.

LDswims said...

No judging here. This economy is terrible and then you add in California's woes and you really weren't left with much of a choice. You did try to do everything else but credit card companies (just like my experience with my health insurance company) don't care about the person behind the account number. We, like you, are also changing our take going forward and ripped up all our credit cards. If we can't buy it with cash, we don't need it. If we do need it, then we need to save.

We keep hearing that the economy IS picking up but I'm still not seeing any signs showing that as the truth. People still don't want to spend, people really have cut back and an even larger indicator is that people still won't trade in the stock market. We heard a news segment last week about that, only banks and mortgage companies are trading in the stock market right now. Private citizens still don't believe this - and no matter how loudly they tell us "yes it is turning around" actions speak louder than words.

You have nothing to feel bad about here - although I do understand the personal disappointment. Nonetheless, you were fine until things went haywire and you were working your way out of things. As an entire country we all abuse credit (I know my husband and I both, separately and together fell in that camp until not too long ago) - that starts with our government and then snowballs down to the average citizen. I actually am finding myself yearning for the days in which my grandparents were setting up home - you got a mortgage and that was it. And half the time a mortgage wasn't even needed as housing prices were reasonable. My grandparents didn't get their first credit card until they were in their 60's and then discovered they didn't like having them as they ended up with a false sense of what their expendable income really was.

Anywho, I am rambling.

As for the nomadic life - my grandmother did that for over a decade. Retired from her job and went to Europe first and traveled around in a small camper with a friend for a year. Then they came home and my grandmother bought a small camper here and just took off east after a big bon voyage party. She loved it and it was fun for us in the family to figure out where she was and then get ourselves there. You'll love it!

Sorry the comment is so long. I just want you to know, more than anything, no judgements here and, in fact, you have my support and well wishes that everything goes fine.

Kinzie said...

Wow, I can just hear your pain almost, but more importantly I get a real sense of relief. It is hard to carry all that around with you. We don't judge you; we all have issues and pasts and baggage of our own. And let me just say that the thing that impresses me the most is that you and your hubby are sticking together and working out this solution TOGETHER. Do you know how rare that is? You must be a match made in heaven. Nothing is more important. Hang in there.

Lonicera said...

Debbi, how could you possibly think it would make a jot of difference to how we think about you? These things happen, and from the look of it you're being incredibly brave. Plus you're about to start on a great adventure. Will you be able to get a job too (or do you already have one? I'm not too clear on that). Just keep on blogging - the best thing about bloggers (and I include myself) is that we're not judgmental.
A hug to you.
Caroline

Katherine said...

I am so sorry you are going through this thinking of you xxx

Sandy Lee said...

{{{HUGS}}}

We are here for you and know you will get through this with flying colours. Funny about the RV. So many people when they retire want to do the same thing as you will be doing-and they choose it. One day, you'll drive it over to Hawaii, I'm sure. Take care and please know we would never judge. My thoughts are "There but by the grace of God... But God did not do this to you, you did nothing wrong, and you will come out the other side in fine form!

Jenny said...

I'm sorry. Financial stress is the worst. There are a lot of people in this boat, or considering it you shouldn't feel bad. I hope your meeting goes well.

carla said...

You will get no judgements from me...I feel so bad that youa nd your family are going through this. Good luck atthe meeting and remember things will start to look up soon!!

Jennifer said...

Oh Debi! WE love you no matter what. Please remember that. The same thing could happen to any of us. I work in Real Estate so I see stories like this all the time. I'm so sorry it happened to you and Walt. This post was so sad not because of what happed but because you were worried that we would judge you.
I'm sure it will be an adjustment, but I think you will love the RV lifestyle! My grandma did it for years and never in her life been happier. My husband and I talk about doing it when we retire. I think it would be quite an adventure!
You might have to change the title of your blog to "The Traveling Bandster"!

susieq4givn said...

You will receive no judging from me, I am sure this was hard to share...I can feel your pain coming thru as I was reading it. I can totally understand what you have gone thru, and hopefully it will all be over soon and you can move forward. Hugs!

Carmen said...

keep your chin up! i think if anyone's view of you is changed because of your situation, then screw 'em :-) I think the "nomadic" lifestyle is cool! good luck!!

amandakiska said...

Debi - I know it is hard right now, but you will be so glad that you made these tough choices. There is so much freedom in giving up all the "stuff". It is scary, but also very liberating!

DawnB said...

Debi, I am so sorry to hear this. Please know I will hang in there with you & hopefully be able to offer some moral support. What a rough patch you are going through right now - but you are right, this sounds like the best option for you & Walt.

Amy W. said...

I am 30 years old, and at 28, I filed bankruptcy. My only regret was that I didnt do it sooner. I lived off of credit cards in college (I was in college for almost 7 years), and would take student loans out to pay the credit cards off. then I would charge them up again. I was an idiot in that sense. But I spent so many years hiding this from the most important people in my lives...my parents. When I finally called my mom one night and told her...I was afraid she would hate me. Money, or budgeting...is big to my mom.

I tried for a few years after that to consolidate. It was such a mess. Finally I just did it. It has been the best thing ever. I still don't save money well, but I can only spend what I have in cash. No credit cards. Ever. Again.

This will be so hard for you, and for me...I didnt have a house or a car to lose. So I am sorry that you are losing the house. But it will free you. And oh my God it is an amazing freedom.

I promise.

tessierose said...

First of all, how could we judge you? You are a great person who just happens to be going through a tough time. After my divorce I got rid of all my credit cards and decided that I wanted a simpler life, if I couldn't pay for it I had to wait and found that generally after I saved for something, I either didn't want it anymore or it was on sale. I think this is an opportunity for you to live a free and simple life. Best of luck to you and your husband. A clean slate is always a good place to start.

Linda said...

Debi - We all support and you are doing what you need to do to get back on your feet and on with your lives. Please don't feel ashamed or embarrassed about doing what you needed to do.
I hope some of the stress involved with this is easing off you.
I know personally that financial stress is can be overwhelming. So I really hope this takes that weigh off your shoulders.

xxxxLinda

Debi said...

Thanks everyone for your love and understanding!!

Bonnie said...

I am so sorry you have to go through this. About 10 years ago my husband got laid off and we found ourself in the same position. I was so embarrassed to file, but we had to do it and ultimately it was the right decision. I think the interest rates and minimum payments that credit card companies are charging are crazy. Banks can get bail outs, but the consumer is screwed. Don't get me started...

Camille said...

Debi, you have to do what you can to make sure you are both taken care of in the future. This has happened to so many people and my heart goes out to you and your husband. Keep your head up. This too will pass. Big Hug!

Drazil said...

Debi - thank you for sharing your story as I know it must have been very difficult. You are not alone - we are all here for you and we will never judge you. This is the best bunch of women ever. You'll get through this - and in the end be stronger than ever. God Bless!

Dinnerland said...

Deb-- I'm sorry I missed this post-- but I'm glad you got your story off your chest and I certainly hope that things will turn around for you and Walt from here.
You are certainly far from the only family who has gone through such a struggle-- you will come out the other side of it... and I hope that your plan to use cash will serve you in good stead going forward.
Good luck and hope the meeting went well.. xoxo

Michelle said...

I also have been through a bankruptcy.. We were never late with bills either. My hubbies job with held money and it was a domino effect... So I could never judge you.. You will feel so much better when it is all said and done.. That is how my hubby and I want to live by the seat of our pants. Enjoy...

-Grace- said...

This really spoke to me as I am also having financial issues. *Hugs* I could never think less of you, because you are merely a victim of circumstance. The economy has completely tanked and taken down everyone (who wasn't a CEO) along the way. It's not like you knew you couldn't ever pay something off and just racked up debt for the hell of it.

I'm sorry this is happening to you.

Debi said...

Thanks everyone!!