• Disaster

    Finally…foreclosure

    Nearly two years after we stopped paying our mortgage, our foreclosure finally happened. In reviewing the paperwork, it was in the works for 17 months. It only took 4 months for Fannie Mae to give the lender power of attorney, and we got our first foreclosure notice shortly thereafter, but then the process was stopped by our bankruptcy proceedings. After the bankruptcy was discharged, we received foreclosure notices every month or two, but the scheduled sale would never happen. This continued for nearly a year, so I had no reason to believe that the notice we got for a sale on the courthouse steps the first week in October would…

  • Disaster

    Myths about life after bankruptcy and foreclosure

    Misconceptions that bankruptcy and foreclosure are interminable sentences of doom are very common, but are outdated and not necessarily true. Here are some of the myths I’ve seen most: One’s quality of life will suffer immensely. A year after walking away from our home due to Tony’s job loss, we’re living just as comfortably as we did in the past, even on half our previous income. This is specifically because we gave up our home and declared bankruptcy. It isn’t the answer for everyone, but for us, it was the only choice to make. Renters have to live in sketchy apartments post-foreclosure. We are renting a lovely 2,000 SF home,…

  • Disaster

    Can bankruptcy keep you from getting a job?

    A couple of months ago I interviewed for a new job at a big broadcasting company. They extended a verbal offer that was contingent on successful completion of a background check. I accepted the offer, but the contingency made me really anxious. I don’t have a criminal record, and I knew there were no discrepancies in my employment history or educational background, but there’s definitely a public record of my Chapter 7, and I was concerned about its impact on my formerly strong credit history. And I had no idea whether our foreclosure would show up, since it’s been in a holding pattern for more than a year. Now, ethically…

  • Disaster

    The social stigma of bankruptcy and foreclosure

    I’m afraid that even in these times of record numbers of bankruptcy and foreclosure filings — primarily by good people with good intentions who are in bad situations through no fault of their own — the social stigma attached to bankruptcy is still alive and kicking. I was reminded of this by the blog post of a friend, who is in a rotten situation due to the economy and horrendous real estate market. He and his wife are both professionals and they have a young family, and they are facing the very real possibility of foreclosure and perhaps bankruptcy. They’ve burned through their savings and are living right on the…

  • Uncategorized

    Is credit monitoring a bad idea?

    I’ve used a credit monitoring service for a number of years. Sometimes I check it religiously every month, other times I go six months without even thinking about it. I’ve used it a lot recently to clean up inaccuracies in my credit report, and I like the fact that it sends me an email any time there’s an inquiry or a change. The service I use does provide credit scores, but I’m more focused on the full report than the number. I pay less than $8/month for this service and overall it seems worthwhile. There’s a school of thought, however, that says credit monitoring is unnecessary and a complete waste…

  • Rebuilding

    Buying a car after bankruptcy

    I surrendered my beloved Mazda after our Chapter 7 closed in November, and then went three months with no car. I didn’t think I’d mind sharing a vehicle with Tony, and it worked reasonably well, but we live in a very rural area and I really missed having my independence. After going through bankruptcy and cleaning everything up I didn’t want to incur additional debt, but I finally realized that was my best option, both in terms of rebuilding my credit and getting a dependable vehicle. So I saved my pennies for a decent down payment, and headed off to Carmax. I thought about waiting another month or so, but…

  • Rebuilding

    Let the credit rebuilding begin

    It’s been nearly three months since our Chapter 7 bankruptcy was discharged, and we’re beginning the slow process of rebuilding our credit. Dave Ramsey maintains that you don’t need a credit score because you shouldn’t use credit for anything, which is pretty easy to say when you’re as wealthy as he is. We agree with that in principle and are committed to keeping as low a level of debt as possible. But we also know that for regular people in real life, large purchases such as homes require loans…which in turn require a reasonable credit score. With that in mind, credit rebuilding is a necessary evil. Here are the baby…

  • Disaster,  Rebuilding

    The Reset Button

    After a >5-month wait, our Chapter 7 bankruptcy case was finally discharged and closed thisĀ  week. While this is an enormous relief (the reality of all that discharged debt is just beginning to sink in), everything that was legally protected by the Automatic Stay during the process can now go. The repo man came for my Mazda on Thursday, which was more of an emotional ordeal than I expected. I had to keep reminding myself that giving her up was a conscious decision I made, and it was the right thing to do, but I was awfully sad to see her go. I can’t remember the last time I didn’t…

  • Disaster

    Bankruptcy and auto loan reaffirmation

    In the process of our Chapter 7 bankruptcy, we’ve had a bit of confusion over what to do with our car loans. As with other debts, auto loans are discharged in a Chapter 7 bankruptcy. But they are secured debts, so the bankruptcy only absolves the filer of the obligation to pay and doesn’t affect the security deed. In other words, you don’t legally have to keep paying, but the lender doesn’t have to let you keep the car, either. This plays out differently in various places. Ride-through: In some jurisdictions and with some lenders, you can keep making payments on your vehicle as originally agreed. As long as it’s…

  • Disaster

    Chapter 7 bankruptcy and the presumption of abuse

    Dubya Bush’s Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the first overhaul of US personal bankruptcy law in more than 25 years, actually made filing bankruptcy much less protective, more expensive, and more difficult for consumers. It provided for the dismissal or conversion of a Chapter 7 case upon a finding of “abuse” by debtors with primarily consumer debt. Abuse may be found when there is an unrebutted presumption of abuse via the means test, or through a finding of bad faith, determined by a totality of the circumstances. Only debtors whose income is higher than the median income in their jurisdiction are subject to being found “abusive”.…