Bankruptcy & Business

[Snowmom]

I completely understand where you are coming from.

6 years ago, my husband lost his job of 16 years and he was making abou $120000 a year. He had about 6 months severance and we thought no big deal, he'll find another job. Well 2 years went by. He had interview after interview and nothing. Thank God we had a nice nest egg that we supplemented along with my daycare business. Then he decided to take life into his own hands and open a carpet/tile, grout/hard surface cleaning business. Well, he grew that over the past few years, but it is not enough to really make it and it's so up and down. So we went to a lawyer about bankruptcy and decided not to do it. We instead put our house up for sale. It sold for $212000. It was a 2,600 sq foot house, gorgeous with an above ground pool. We bought a 1800 sq ft, foreclosure house that was destroyed for 76000. A HUGE thing for us and our kids who were 14 and 16 at the time. I know they were humiliated with the house change, but they never complained once. We have done tons and tons of work on the house and it's finally getting good after 1 1/2 yrs. We still have debt up the A** and just settled with 1 credit card for 1/3 of what we owed and we're working with a lawyer on another one. All 3 cars are paid for, we have a small equity loan on the house and still 3 credit cards. So we still talk about if we should do bankruptcy. People say bankruptcy will affect your credit score, but if you're late on your bills all the time your credit score is junk right now anyway. My husband finally realized that his business is not enough to carry us. He got a job last month at a hospital as a supervisor of the cleaning staff. It's 2nd shift, with benefits which is wonderful. So used to doing obamacare where you almost have to give a rectal exam to get that. He has 1 more year on his business payment, so he's still doing that on the side. So with his new job things are looking up for us a bit, but we still are faced with years of payments, so we may still consider bankruptcy, I don't know.

So long story longer, I get how you feel because my husband too had that great job and we fell from the sky. I don't wish this on anyone. It's extremely humiliating and embarrassing, but like others said, more common than you think. i would talk to someone else about it. If that person was rude, don't give up, try again and see if you can get someone nicer to explain things to you. I wish you the best of luck and really hope things go right for you. I know how heavy that burden is.

That's the thing ^^
If you are late on one credit card or installment loan payment, your credit/FICO score will get a ding and it stays on your report for 7 years. If you have multiple adverse accounts on your report, your FICO score is pretty much trashed and it'll take a few years to recover (from a credit standpoint). Those late payments stay on there for 7 years.

So, 7 years with shaky credit and debt up the wazoo or 10 years and a fresh start?

OP, I would go to a private bankruptcy lawyer as mentioned earlier. They should help you get a clear perspective about your best options.

[Unregistered]

How many months behind are you on your bills?
Are there other communities you can move to with more promising job market? Are you still in school? Have you spoke with the aid dept? Students who are struggling may qualify for help, whether loans or subsidized living. May be worth checking.

Any chance you can check into a private lawyer who specializes in bankruptcy? They may give a free consult, but if not, have your papers together and everything lined out, so you use as little time as possible, to reduce the fees. Research them, bc most will do a free consult. They recognize you are coming to them in a tough financial spot and ime, are empathetic to your situation. Hppefully, you can find someone good.

Legal aid can be hit or miss. Kind of like the people at our social services. They get burned out quick. I think they see a lot more people who are expecting a handout, versus people like you who actually need it temporarily until you get back on your feet. Try not to let them get to you. As the pp said, it is more common than you think and it does not make you a bad person. You are just in a bad spot right now, but you will come through. Hang in there!

There are communities that are 2 hours away that have a better job market that we could possibly move to...but that was just a thought we considered. My mind has ran through several options. I know it would be hard on our children though. The oldest 2 are teenagers.

I was studying for my next degree, so at this time I'm not in school. Our credit scores are steady falling. So refinancing anything wouldn't be an option. The last time I checked it was barely 600.

[mommyneedsadayoff]

There are communities that are 2 hours away that have a better job market that we could possibly move to...but that was just a thought we considered. My mind has ran through several options. I know it would be hard on our children though. The oldest 2 are teenagers.

I was studying for my next degree, so at this time I'm not in school. Our credit scores are steady falling. So refinancing anything wouldn't be an option. The last time I checked it was barely 600.

Okay so a few more ideas and then some advice. If your daycare residence is livable and paid for, can you make it work for your family? If that is not an option, can you consider selling the property to another family member?

As far as moving, it may not be the worst idea. If you guys cannot get jobs, filing bankruptcy will not solve any problems. You need income, so you need to go where you can find it. If that means moving, then so be it. That is what we did and it was 1300 miles away, versus 2 hours. Your kids will have a tough time, but you are are a family unit. They are quite a bit more resiliant than you think and trust me, they will prefer a smaller home in another city, versus a tiny apartment in your current city and eating at the soup kitchen. I am not saying this to be harsh. I am just saying it because when it comes to this and divorce, parents try to stick it out longer for the sake of the child and it is usually more harmful, than helpful. As long as you all have each other and work together, you will get through it, but if you let your kid's feelings trump the well being of your whole family, it will be much tougher, kwim?


If there are no other options and you are going to file, then my advice, whether you move or stay in the same city, is to stop making any payments, if you have not done so already, and start securing another place to live. Get into something you can afford now and secure a lease. ANY money you earn now is going towards your new home and cars that are affordable. Sell anything you don't need (major garage sale!), pack up the stuff you do, park your cars, and let the lenders know where to find them. They will come get them, trust me . Make sure that the new home is close to your work so you may be able to get by with one car and public transport if possible. The reason I asked how far behind you are is because if you are only a month behind, you have a few weeks to hoard your income for the next step before having to leave your current situation. This will bide you sometime to get income for deposits and to buy a cheap car.

I am trying to think of more advice, but I know that for us, even without bankruptcy, we basically went into to hoard mode with our funds to secure our living needs, and then started chipping away at our debt by settling with our creditors. We are 7 years past this point and I still have two outstanding medical bills that I am waiting to hear from collectors about. Once your debt gets charged off, you are basically waiting for them to contact you so you can settle, but it is not fun and it is a job in its self. If we had to do everything over, we would have filed. The only thing that stopped us was my dh's family. They could not stand the thought of us filing bankruptcy and so we didn't. But I do wonder where we would be if we had. I feel the weight of that decision every day.

[Malmom]

We filed bankruptcy before. It's not the end all people make it out to be. Within a year and a half, I bought a new Toyota Sienna with a 5% interest rate. We had credit cards again, and at the two year mark we bought a home. As soon as our bankruptcy was discharged, we started working hard to reestablish our credit. 3 1/2 years out from bankruptcy, our scores are in the low 700's. Before, they were around 530.

I don't know how it all ties in with your business. But definitely make an appointment with a bankruptcy lawyer. Our cost was $1k and it was the best money we ever spent.

[Unregistered]

Thanks for ALL the input I am considering every option. The area where I live is rural. There are no bus stations or taxis and not having at least one vehicle to go to work wouldn't be an option. I know if I talk to my church and family they would probably help out to a certain extent, but not enough to pull my entirely out of debt (and I don't expect them to).... TBH its a pride thing to ask. I know I shouldn't be prideful right now, but its very embarrassing for me. If we decide to move it would be after the end of the school year because it wouldn't make sense to transfer my 4 children at the end of the school year to another school. My husband received a call yesterday for an interview next week at a plant. So we are remaining hopeful with that. I'm praying and hopefully I will have a decision by the end of this week. Thanks again to everyone with their input! I will keep you posted!

[Unregistered]

....I forgot to mention the building that I was given is in my business name. It was a former house, but converted into a commercial building. The idea of selling it crossed my mind, but not living in it. I will give that some thought and discuss that option with my husband.

[lovemykidstoo]

We filed bankruptcy before. It's not the end all people make it out to be. Within a year and a half, I bought a new Toyota Sienna with a 5% interest rate. We had credit cards again, and at the two year mark we bought a home. As soon as our bankruptcy was discharged, we started working hard to reestablish our credit. 3 1/2 years out from bankruptcy, our scores are in the low 700's. Before, they were around 530.

I don't know how it all ties in with your business. But definitely make an appointment with a bankruptcy lawyer. Our cost was $1k and it was the best money we ever spent.

Can you give more details like what type of bankruptcy you filed and what you had to sell if anything?

[Malmom]

Can you give more details like what type of bankruptcy you filed and what you had to sell if anything?

Can you give more details like what type of bankruptcy you filed and what you had to sell if anything?

We filed a chapter 7. We didn't have sell anything, but we also didn't own a home at that point. We chose to reaffirm our car loan, but communication was mixed up between our lawyer and our bank. So the car was never reaffirmed. Which ended up working out okay for us. We turned it over to the bank after learning that they could wouldn't report to the credit agencies about our on time payments and they could come and repo it anytime they wanted, even if we were making payments since that debt wasn't reaffirmed. That was the whole point of our bankruptcy- to rebuild our credit. It didn't make much sense to keep the vehicle if they weren't going to report out on time payments with them. We bought another vehicle and owned it for 1 1/2 years until we could establish a positive payment history on that car so we could get a better loan/finance rate.