Happy New Year All!

[timetosave]

Hello all. I really just wanted to stop in and let you all know how I am doing.

In October my car was repossessed. I simply had no way of making the payment so I told them to come and get the car. That is saving me 498 and change monthly. I have been taking the bus to and from work since (my employer pays our bus fare). There is a balance of 11 grand on the car, and though I hate doing it I am in the process of filing bankruptcy.

On top of that I have begun using the envelope system and it is working out really well for me. It was difficult figuring out everything I had to establish an envelope for but I think I have it pretty much down.

I am still paying through the nose for the cell phone but I simply can't give that up (I need that direct line of contact with my 13 yo). I am a little behind the 8 ball with stashing those 6 months of expenses because I totally forgot about it in October when I started the system so I am starting this month. I have adopted the 'pay yourself first' and have eliminated the shopping sprees with my dd (which was harder for me than for her).

We found out in November that my garnishment along with two other debts had been attached to our mortgage (though I am not on it) so dh refinanced the home and paid two of them off. The third one is a thorn in my side in that they won't take the amount they agreed to because the financing took so long and I did not get the check until after the date I had informed them I would pay it off. I'm at a loss as to what to do with them, they have been so nasty, but I have the check (only good until the end of March) just waiting for them to decide it will be better to take this amount (which is only 300.00 less than what was originally owed) than for me to wrap them into a bankruptcy. They have told me to include it, they know they can then go after dh I'm sure, but I would much rather get this paid off before I file the bankruptcy. I'm still trying to figure this all out.

Well, that is it in a nutshell, if you have any suggestions on the debtor that won't take the money please let me know, I really need suggestions on that one. I wish there was another way with the bankruptcy, I really don't want to do it, but it makes no sense to me to pay 11,000.00 (which I don't have to spend) on a car I will never see again.


timetosave.

[project15]

Originally Posted by timetosave

I really don't want to do it, but it makes no sense to me to pay 11,000.00 (which I don't have to spend) on a car I will never see again.

It may not make sense, but it's about integrity and living with your decision to get such an expensive car. I don't know your situation and why you got into a car with a $500 payment, but it was your responsibility to pay it off.

[timetosave]

Originally Posted by project15

It may not make sense, but it's about integrity and living with your decision to get such an expensive car. I don't know your situation and why you got into a car with a $500 payment, but it was your responsibility to pay it off.

Oh, I agree, and if things had gone according to plan I would have, but we fell on hard times and I was not able to keep up on the payments. I really did try. I simply don't have 11,000.00 to spend on something I no longer own, I don't know why anybody would even consider it. That is a large amount of money to spend for something I will never see again, are you suggesting that I should pay the 11,000 and put myself back in the same (or worse) situation that I was in before? I think paying the light bill and keeping food on the table for my two children is more important than integrity at this point.

[mom-from-missouri]

? OK, I have never had anything repoed before, so am confused. They now have the car AND you still have to pay in full for it?? I thought in a repo case you would only have to pay for the deliquent amount and interest....

Years ago a former coworker of mine had hers repoed by the bank, and she had to only pay her 5 late payments, interest and then the amount that was the difference between the orginal loan amount and what the bank was able to resell the car for.

Someone explain this to me please...

[jIM_Ohio]

check the OPs previous posts and maybe you will see she hasn't seen the light yet. If this is situation I remember from last winter (or was it fall of 06), people told her to sell the car for other reasons anyway.

http://www.savingadvice.com/forums/s...earchid=116898

[Joan.of.the.Arch]

She did not own the car: she was leasing it. In early summer last year timetosave said her lease payments were $490/month and that she had 24 months left on the lease. $490 X 24 = $11,760. That might explain the $11,000 she was owing now.

Timetosave, a blogger here two days ago described how helpful Debtors Anonymous has been for her. Maybe that is some thing you could look into. I don't have any advice on persuading the company you owe to settle for less. They already agreed to a settlement and you didn't come through on that promise.

[Joan.of.the.Arch]

Debtors Anonymous - Recovery from Compulsive Debt

Amazon.com: How to Get Out of Debt, Stay Out of Debt and Live Prosperously*: *(Based on the Proven Principles and Techniques of Debtors Anonymous): Books: Jerrold Mundis

I got these links from the blog mentioned above.

[timetosave]

Joan, thanks for the links. They will certainly help. I've not come completely onboard yet, but I am taking small steps to getting there. I've come a long way since my last post. I am actually putting away money...this has come late for me, but I am working on it.

thanks everybody,
time

[jasanderson]

Is your husband ok with you filing bankruptcy? Depending on where you live he could end up becoming responsible for your actions and I would hate to see debtors go after him.

I don't know your situation but I was down the bankruptcy road 10+ years ago and it was a very hard lesson that took a long time to recover from. You think it's easy to just walk away from your debt but the hardest thing you are going to discover is how frustrating it is to get credit for anything.

I had a hard time renting an apartment, getting reasonable rates for car insurance, cell phones and even utility bills. A lot of places wanted extremely HUGE deposits. I am not telling you not to file but bankruptcy is a fresh start so you need to be 200% positive this is the right step for you, include anything under the sun you have debt on and know you will not be able to pay and get yourself some financial counseling and start trying to rebuild some good credit. If something were to happen to your spouse and you found yourself losing the house you maybe find yourself having an even harder time to find a place to live with your children that is in a safe neighborhood because most places look at your credit score. I don't want to sound harsh but I have been down this road and it's not a cakewalk. If you have any credit cards in your name currently that are paid off do not close it and hang onto it for emergencies because if you ever find someone to give you another one it will be almost 30% interest rates.


I would be curious to see your list of expenses. Do you spend money eating out a lot? As for the cell phone you are paying too much for - are you locked into a contract? If not - get out of it now. This is one area that can blow your budget completely. There are plenty of offers out there for prepaid phones that are good deals. Check out Virgin Mobile if it's in your area. They have them at Wal-Mart. You can pay as little as 18 center/minute but you can earn up to 5 free minutes online per day watching short advertising clips.

A 13 year old should be self sufficient and independent enough that they don't need to talk to you for hours every day. A quick phone call to check in shouldn't cost you very much money. It may be a tough habit to break and I agree you need to be able to be reached but I think we take advantage of cell phones way too much in this society and it is a lot of money.

[timetosave]

Jasanderson – Hello, thank you for the advice. DH will not be filing bankruptcy, we do not have to file together because we do not have joint accounts. The only reason I am filing is because of the 11,000.00 on the car – I have spent the majority of the last year paying off my debt – through settlements, my fear is that this car will be attached to the deed like my other judgments were, not fair to dh, my name is not on the deed. If not for the car, I would not even consider bankruptcy. As far as credit is concerned, I’m not looking for any – my focus is on building savings. I’ve never been smart about credit (I’m learning) but right now credit is the furthest thing from my mind. If I can’t afford to pay cash, I can’t afford it. It took me a great deal of time to wrap my mind around that concept, but I’m glad I’ve finally done so.

Should anything happen to dh we have more than enough life insurance to pay off our home and his auto, fortunately, on both sides we are covered there. I’ve closed all the credit cards I had, once I paid them off.

At this point my expenses are really low – cell, student loan, cable bill, food, braces and riding lessons for dd, that’s it. I bring in more than enough to pay all those, pay myself (envelope system) put some in retirement and still have some walking money. So right now I’m doing so much better than I was a year ago. I really have to thank the hard hitting members of this board for that. It was difficult to face my debt, and hard to admit, but I’ve taken quite a bit of advice here, working the second job last year really helped also.

Learning what I have over the past year, I honestly do not understand why I was so foolish with money. A huge piece of me was afraid of it, then there was the ‘let the man handle it’ almost like it was dirty for me to even consider it. I spent it foolishly, did not save and ruined my credit. I’m sure I’m in the same place that millions of other women find themselves in, my point now is that I have two choices, I can continue on the path I was on or take the steps needed to turn things around.

Thanks for your input.

time

[Scanner]

I'll admit I am confused on debtor/creditor law, when I first read it, I guess it makes sense and I learned something here.

A lease isn't like a rental agreement on a lawnmower. You take the lawnmower back to the rental store, you are only responsible for the days you kept it overdue.

A lease in an agreement for a whole set of months.

It's a contract.

Like the lease I pay for my office.

If I decide tommorrow to leave my business, I'm still liable for the remainder of my lease until it expires unless there is an exit clause (which my lease actually does have). Because the landlord is still paying taxes on the property, keeping under repair, he needs to keep the property filled and earning money (or else, why do it?)

I guess car leases don't have exit clauses, another reason you should avoid leasing or the American public should start to try to negotiate them in.

I think a reasonable exit clause for a car lease would be 3-6 months of notification that you tend to exit your car lease with a small penalty ($500-1000), that way, if you are falling behind on payments, you can eventually get out. But, at the same time, if the person just sees a new car they fancy, they can't just change leases on a whim (which is very American and from the leasing co.'s perspective, I woulid want some protection from).

Unfortunately, I think you are stuck with a contractual obligation here.

Never lease.

I'll bold this for the forum:

Rule of Life: You always get screwed on the lease

I was thinking about assuming a car lease a ways back but decided the contracts are just too loaded in favor of the leasing co. even if the price is right.

I do think consumer law should start to address these predatory practices.

I would try to negotiate though. They do have the car back in their posession. Tell them you'll file for bankruptcy and they are the reason. But if they reduce your obligation, you'll settle the matter for $X.00.

Normally, I am not a fan of a person trying to get out of their obligation but at the same time, I do think car leasing (as opposed to real estate leasing) is not regulated enough and constructed way too far in favor of the leasing co.

Have an atty. review your settlement agreement if you get that far.

Offer a reasonable settlement. If you were behind by 4 months. $500/month = $2000 + another $2000 for their time and trouble of dealing with you.

[jasanderson]

To file for bankruptcy you will need to consult an attorney. Your first question should be whether it is beneficial for you to file. If the company that took back the car is able to re-sell or re-lease then you should not be held liable for the full amount of your lease maybe just the difference that they lost. I would have an attorney review your lease agreement and try to settle a negotiation for you if this is the only thing you need to file on.

As for putting a lien on the deed to your house if you are not listed on the property deed I am not so sure the company would be able to do this unless you used your house as collateral. In the event that you did, you are probably in trouble and this could also jeopardize your house because when you file for bankruptcy they could require you to sell assets to pay for debts. The bankruptcy filing laws have gotten a lot stricter but when I went through it 11 years ago the only reason I didn't lose my vehicle is because I had no equity they could have forced me to sell to attempt to pay off my debts. The day I sat in to get the debt dismissed there were people that were being forced to sell interests in land, snowmobiles, four wheelers, paintings, collectibles - anything of value pretty much to attempt some restitution for debts that you legitimately owe.

It sounds like you are learning about money and learning from your mistakes but please educate yourself before you take what looks to be the easy way out and end up regretting it for the next 10 years it stays on your credit report. I would definately attempt a settlemtn first - maybe try to get help from a local non-profit debt counseling place that can attempt to negotiate a settlement and payments on your behalf.

[LivingAlmostLarge]

How can you file BK, but still have riding lessons for your daughter, braces, and a home?

[project15]

Originally Posted by LivingAlmostLarge

How can you file BK, but still have riding lessons for your daughter, braces, and a home?

Agree. Riding lessons would be abolished pretty quick at my house if this were the situation.

I'm not positive, but it seems like the husband and wife's finances are separate. Which means that the husband is paying for that stuff and the wife is claiming bankruptcy to get rid of the debt. Sounds pretty shady if that's the case.

I would strongly suggest not filing bankruptcy over 11K. What is your yearly income? If that amount was like 5 years income I would be like maybe but bankruptcy is not a smart way to get out of a 11K debt.

Call the lease agency and see what payment plan you can set up even if it is for a longer period. They have the car so they can re-lease it or something to lessen their loss. But if they know you had to let go of the car because you could not make the payments maybe they will reduce the rate and make the payments longer so that they get their money and you can make the payments (even though you no longer have the car).

What doe your husband think of you filing for bankruptcy?

[bjl584]

When something gets repossed the bank will turn and sell it. The bank has no interest in owning a car, they only want the money. It most likely goes to auction and will be sold for whatever price it can fetch. The bank will apply this amount to the outstanding loan balance. Whatever is still left is up to the purchaser. In your case, the car that you bought sold for $11,000 less than you still owed on it. Now you are responsible for the difference. Whether or not you attempt to pay it back is a question of your own morality. I can see your argument that there is no sense in paying for something that you no longer have, but on the other hand, I have a feeling that you weren't thinking this way when you bought the car in the first place. I'm sure that you originally planned on paying for the car. That is a decision that you will need to decide for yourself.

[maat55]

Fighting and paying your debt if at all possible will make you a better person and better at manageing your money. Running from your debt will make you a weak person in every aspect of your life. 11,000 is the mountain, climb it or run like a baby.

[timetosave]

Ok, I've contacted GMAC, they keep jerking me around. I am honestly trying to set up some sort of arrangement to pay this debt but they just don't want to listen, so I am pushing this issue one more time with them, then I am filing, I need to move on.

I guess I see how you think I am running from my debt, but I don't see it that way. I simply can not afford to pay for something I don't have. I never intended to purchase this car outright, well, I did think about it once, but with the guidance of this board realized the car would be worth far less than they would be asking at the time the lease ended. I was only going to keep the car for the 4 years and then turn it in.

I've been speaking with a bk lawyer since October, of course he states it is in my best interest to file, otherwise he would not have a job. If I can get GMAC to charge me what I owed on the remainder of the Lease, which is the contract I signed, then I won't file, but they know filing is in the works now so if they don't come to a decision by the end of next week, I'm filing.

time

[timetosave]

Originally Posted by project15

Agree. Riding lessons would be abolished pretty quick at my house if this were the situation.

I'm not positive, but it seems like the husband and wife's finances are separate. Which means that the husband is paying for that stuff and the wife is claiming bankruptcy to get rid of the debt. Sounds pretty shady if that's the case.

My daughter is not going to suffer because of my poor decisions. She works at the stable and so do I in order to get her lessions for next to nothing. DH and I have never combined our finances, which has turned out to be a very good thing.

[Joan.of.the.Arch]

Do you still have some other debts to declare in bankruptcy? What about the ones that were already in collection or charged off? I do think I misunderstood about your trying to work out a payment on the car, but being late getting the check---that was for a different debt, right?

How much is the lawyer going to cost you? More than the $11,000 you owe for the car?

Have you thought about what you will do if the judge says NO to your bankruptcy?

The $11,000 by itself just seems like a very small amount to go into bankruptcy over, and I fear you could wind up in even more debt owing the lawyer and having lost a lot of time and possible work hours working with the lawyer on this in the first place---especially if you are not able to get that debt (and any other debts) dismissed.

You've got to be really personally reformed and focused to make this work, even with the bankruptcy. You will still probably have many avenues available to get yourself into debt, yet not be able to dismiss the new debts by bankruptcy soon after bankruptcy #1.

These discussion boards often have people posting who are in very difficult debt, yet the idea of bankruptcy is not often discussed. That might be because it is less frequently an option than it was about 2 1/2 years ago. (Think it was 2 1/2 years ago the the laws became more restrictive.)

Finally, have you tried working through Consumer Credit Counseling? I mean that specific organization because some of the other supposedly non-profit credit counseling groups do look for hefty salaries for their officials and are not necessarily good at following through with their part of the debt repayment plans.