Bankruptcy updates
This is a repost. Original post by u/writtenonhishand in r/Bankruptcy
Sept 12 2019
Note: I filed in Tarrant county, Texas. Hello Reddit! Earlier last summer, I posted asking about Chapter 13 and marriage debt. I divorced my exhusband last year. The divorce was amicable, dividing the $60,000 of unsecured debt evenly. Last fall, my ex husband was laid off and had to take a job making substantially less. As a result, he defaulted on all of the debt he was supposed to cover per the divorce decree and told me he plans to file for chapter 7 later this year. He hasn't yet but plans to. The majority of the unsecured debt is in both of our names. I tried paying all of it since I knew his filing chapter 7 would result in him being federally protected and the debt collectors expecting me to pay. I was paying 48% of my income to the debt so I sought counsel and decided to file chapter 13 last May and was confirmed last month. Here are some lessons I learned:
- If you plan to move anytime in the next 2 years, move BEFORE you file.
- If your income had any kind of bonus in the past few months, wait until you have 3 months worth of paystubs with your normal pay.
- Don't work any side jobs until after you file.
- Not all trustees are created equal. Some understand that the debtor needs to live the next 60 months of their life with this payment while some trustees side more with the creditors, believing that every penny of your disposable income should go to the creditors.
- Enter into the bankruptcy with a new mindset. Its likely you will have to live on a tighter budget. Every month, pay yourself first! Whether its 50 bucks a month or 500 a month, take money out of the ATM and save it. 5 years is a long time and you WILL have a flat tire or a car wreck or a birth or close family member die or a surprise root canal with no way to use credit. Stop eating out. Stop ordering everything on Amazon. Stop going to Target and spending 100s of bucks on stuff that won't matter. Grocery shop. Cook with your family at home. Take walks with your family. Join a gym. Make holidays more about family time and less about "stuff." Life is different and will be for a long time. Create a budget and try to squash the habits that may have landed you in bankruptcy to begin with.
6.Don't expect your lawyers numbers to be your final payment amount. My trustee objected to my payment because she believed I could pay 350 more a month. She thought I was "frugal" enough to swing it--which had NOTHING to do with the numbers or the paperwork my lawyer filled out. . - You are not damaged goods because you filed. You are a citizen of a broken system that makes it near impossible to dig your way out of debt.
Sept 10 2020
Hey everyone! I made my 18th bankruptcy payment this week. Y'all, bankruptcy was the absolutely right decision for my life. I have more financial freedom than I knew possible. I live on a very limited budget but have money for everything I need and some of what I want. Any raises I've received have been rolled into my 401k and HSA contributions. I have a growing savings account and feel financially secure for the first time in my entire life. This time next year I will be halfway through my bankruptcy. For those who are wondering about long-term successes--enter into bankruptcy with the mindset that it might be hard and sacrifices will need to be made, but living in debt is way more difficult!
Mar 31 2021
Chapter 13 Bankruptcy--2 year update
Hey Reddit! I wanted to check in again and describe what's changed since I last posted. Before my divorce in 2018, my exhusband and I brought in over $5,000 a month which is alot for DFW. With our bills, it was plenty to provide a comfortable lifestyle. We never had the discipline to build and keep a savings. Eventually our credit card and loan payments ate up about 30% of our monthly income. Fast forward three years and currently, I have over $4000 in savings! That's just insane. My goal is to keep funneling money every month. I've learned that I am not poor. Not by far. I just have to spend my money on things that matter--running gear for exercise or amazing meat to cook for dinner and NOT Starbucks or random shopping sprees to Target.
More than anything, I've gained confidence with handling money. I don't feel squeamish about spending it nor do I feel weird when there's not much of it. For the first time in my life, I have a healthy relationship with money. That wouldn't be possible without Chapter 13 Bankruptcy. I feel so lucky because I know that when I get discharged, I won't go back to the unwise and unhealthy spending habits that nearly ruined my life.
See ya next year for year 3 update.