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?