Wednesday, April 21, 2010

The In Which I Wish We HAD Gotten the Lexus, the Mini and the Hummer

MathMan and I paid a visit to our bankruptcy attorney this morning.  It seems that the Bankruptcy Court is serious about us making payments for our Chapter 13.  For those unschooled on the differences between types of bankruptcy (lucky, smart you!), here's the simple diff....Chapter 7 means you've cleared the decks and are free of your debts.  Except for student loans (cough, cough). They are rarely, if ever, included in bankruptcies.  Chapter 13 means your creditors can no longer call and harass your ass, but they're going to get their pound of flesh from you no matter what, as much as they can, not just what you spent, but all those fees and punishments that cost in the $35 per whack rang.  It's not nearly as much fun as it sounds.

A few years ago, Congress teamed up with the big creditor banks and rewrote the bankruptcy law.  It is now quite difficult to qualify for a Chapter 7 so here we are.  Except.....

The Chapter 13 was based on our old income.  And we're now minus two thirds of my salary.  Which is significant.  And since we've had to use our money for thing like health insurance, rent, food, phones, utilities, auto insurance and gasoline, well, that just doesn't leave much to send to the Court.  We were advised a couple of months ago to pay ourselves first, and make whatever payments we could.  Which amounted to nothing because we needed a new clutch on a car, had to pay a housing deposit for college, assorted other shit comes up and then this month we had taxes to pay because when we lost our house, the mortgage interest deduction went with it.


We have a plan now for what to do next.  We're going to have to refile, but my severance pay (which is long gone) is still fucking up the numbers.  Stupid averages.  First up though, we have to pay the Court something.  Oh.  We discussed this on the way home.  So fine, we pay the Court their $900, but then what?  How do we buy food and gasoline, pay utilities, insurance, etc.  We brainstormed ideas on how to cover the shortfall, but I better not write them here.  Some of them are rather distasteful and possibly illegal.

As we went through our allowances and deductibles worksheet with our attorney, it became clear that we don't waste nearly enough money on things.  As the attorney pointed out, the law now rewards people who indulge in he riskiest kinds of financial behavior.  If we owed money on three cars, for example, we'd take down our income to the point where a Chapter 7 would be a no-brainer.  So how can it be that we have just enough to live on, but the Court thinks we should be able to pay $900 per month to our creditors?  I am without nice words.

I mean, the banks got bailed out, we didn't.  Will they really hurt if they don't get our money?  Oh, I know.  It's not about money.  It's about punishment.  If you just let anyone take out credit and never pay it back, then we all turn into animals.  If there's an advantage to be taken, we'll all act just like soulless corporations and exploit, exploit, exploit.  But really?  When we had the money, we paid.  We didn't take vacations, buy designer clothing, jewelry or expensive toys.  We didn't buy a house we couldn't afford until the interest rate (the bank's idea, not ours) kicked up a few notches and became untenable.  My job moved 2 hours away, increasing my expenses and, then, ultimately laid me off.

Oh, wait.  I don't want to sound like a victim here.  These were choices we made.  As if people without money really have options.  But here we are.  We stopped digging the hole, or so we thought, over a year ago.  For over a year, $900 was skimmed out of my paycheck and distributed to creditors.  Even after I was laid off, we made the payment ourselves until it left us with nothing to live on.  The turnip was squeezed until it turned to dust and now we've got to hang on to a shred of hope that we can qualify for Chapter 7 in a few months.

As we drove home, I told MathMan that I was going to curl up into my ball of financial shame and stress eat chocolate.  He remained quiet.  He knew I didn't mean it.  I've lost nine pounds.  I will not let this spiral into an excuse to overeat.  "Perhaps you should stress exercise instead."

I didn't even punch him.  Because he's right.  The bastard.

Worry changes nothing.  Instead we're taking action.  At least it feels like we're moving in the right direction.  And if that light at the end of the tunnel is just another train?

DUCK!!!!!!!!!!!!!!!!!!

22 comments:

  1. There's always subsistence farming in the Oklahoma panhandle or gold panning in Alaska. Maybe grow some marijuana in one of the National Parks. And your kids don't need schooling, they need jobs.

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  2. Damn, I thought he was going to tell you there was no money for chocolate.

    It's an abomination what's happened and keeps on happening.

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  3. My name isn't Evan - Is that humor?

    susan - no money for chocolate would be alright. It's the lack of electricity and water that's a bitch to cope with.

    Christine - pretty much

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  4. I'm so sorry for your whole family. The ubersuckiness of the entire situation really gets to me. That Congress changed the rules of the game at some point so that folks like you get it hard and without the courtesy of a thank you, while Goldman Sachs, which still exists only because the US government kept them from crumbling, managed to eke out a multi-billion dollar earnings report last quarter makes zero sense to me.

    If I could help you, I would. Love and consolation really seem so empty at times like this.

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  5. Amen to what Geoffrey said. If I win the lottery...

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  7. Thanks, Geoffrey and Christina. I mean it. And I know you do, too.

    Bobcat editor - you're still not funny. Time to move on now.

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  8. I hate all financial institutions. Oh and most lawyers.

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  9. Ugh, what a crappy situation. I'm really sorry you're having to go through this.

    And easy, Mommy Lisa -- I'm a lawyer and I'm really nice! :-p

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  10. Ugh. I am so sorry to hear your going through this. That really sucks.

    At least on the bright side you've lost nine pounds. Right?

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  11. I have nothing clever or funny or helpful to say. It is just wrong and unfair and it sucks hard. I am so sorry.

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  12. We're in this together. Just a couple of nice families playing by the rules and getting kicked in the teeth for it.

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  13. Mommy Lisa - I'm pretty fed up with financial institutions. Right now I'm grateful for our attorney. The bankruptcy stuff is an awful maze of bullshit.
    Wendy- Thanks. And I can vouch for
    your niceness!
    Meleah - Yes the weight loss is such a good thing. Not giving it up for emotional eating.
    LBR - Thank you. It's going to be okay. (I have to repeat that to myself. Often.)
    MNMom - I think of you guys often. I hope you're doing okay. This situation sucks for so many of us.

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  14. That is stupid stupid about all those car payments. Grr.

    I don't understand how it can't change now that you're unemployed. It should drop a ton. But there are a lot of things that I don't understand.

    Good for you for losing all the weight. Try not to stress eat, hard as that is.

    Hugs to all of you.

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  15. I'm with everyone else. I desperately wish that I could help you guys.

    I wish we didn't live 10 hours away. I would totally walk to your creditors and highly recommend that they bite you. They can't really *do* anything to me...

    I'm so sorry, and I love you.

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  16. We managed to keep our house for a few months after our Chapter 13 but then had to sell. We paid everything off, but still have it hanging over us for the another few years.

    Since companies check credit ratings of applicants now, I am not sure if it is why I have not been hired for any of the jobs I have interviewed for...yet another Catch 22 of the new economy...Not to add to your worries! But I tell you - I am very into buying lottery tickets for the first time in my life.

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  17. All I can say is - what kind of fuckery is this?

    Oh Lisa, wow.

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  18. Offer the creditors a chicken. The republican candidate for senator in Nevada suggested bartering with doctors, so why not offer that to the banks/creditors. Maybe you can offer to send them daily missives on ethics in return for reducing your debt. They need it.

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  19. Just before I read this post there was a news blurb saying Chrysler owes $12 billion & AIG paid nothing on their $70 Billion loan. GM repaid $8 billion, but actually owe $45 billion to the US & $8 billion to Canada.

    I am agreeing with you on this *where's my bailout* lament.

    Corporations still enjoy more lenient bankruptcy options.

    If you are paying to support minor children, then damn, there ought to be some kind of break.

    Corporations are getting all the breaks now, because they are "people".
    Maybe that's the damned problem-- people just need to be "corporations"???

    I once had the IRS come after me as a dirt poor single parent on welfare.
    I think I gave them the- here is my budget (more month than money), show me where I can afford to pay fines, fees, and the amount owed. I don't have it! Not gonna happen!

    They quickly assessed no way to get blood out of a stone, & let me off the hook. If they took my boots, I'd have no bootstraps in which to pull myself up with!

    I hope you can make an appeal based on radical change of income... but supporting the kids should matter too. Lay down the financial facts. Hell use comparative graphs & pie charts if you have to.

    What a world! Fight the good fight, Lisa.... demonstrate the change & how things shifted
    financially.

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  20. Fran's got the right idea. May not fly with the greedhounds, but worth a shot.

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  21. First of all, holy shit that sucks in the worst way.

    Secondly, I like gmb's suggestion on barter.

    And Fran's whatyouseeiswhatyouget approach.

    There was something about 'strategic defaults' on the teevee the other night. This guy in FL was like, "What the heck, these big corporations are walking away from loan obligations, so why can't I?" and he was absolutely right. Because they are.

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