Sunday, February 28, 2010

My Favorite Financial Blog

It might seem weird for me to offer my favorite blogs on the topics of saving money and being frugal. I'm filing bankruptcy, right? So what would I know?

I have to say that over the last two years we've become significantly more responsible with our money. We're paying for things that we charged long ago as well as for a drop in our income after I had my child. I feel like I have a pretty good handle on our day-to-day and future funds.

The Simple Dollar is my hands-down favorite blog. It's the only one I subscribe to via email and read every day. All the others I check in with on occasion.

No Credit Needed is another blog I enjoy quite a bit.

Five Cent Nickel

There are a few others; I'll dig them up when I get a chance.

Saturday, February 27, 2010


A few days ago I mentioned a book called Maxed Out. I also mentioned a few others.

I haven't opened Raising Financially Fit Kids yet.

I started Credit Card Nation. The author of Maxed Out makes a comment about CCN, basically saying that it's a dry read. I agree.

It's overly-complicated. I hate it when I feel like an author is trying to impress me by using as many large words as possible in a sentence. I have a large vocabulary, so it's not that I don't know what the words mean... there's a flow and ease of reading that allows me to absorb the text much more quickly when it's not written in an overly-complicated manner. It's part of the reason I love reading blogs. I love the personal and conversational tone.

Maxed Out was written so that it was easy (and amusing) to read. Credit Card Nation is sitting on my bookcase. I haven't read past the first three pages and I probably won't.

I'm about a third of the way through Getting Credit After Bankruptcy. Hmm. Where to start on this one.

(Provided so you can see what book I'm talking about; this is one I don't recommend buying.)

First of all I'm not impressed. I've even outright laughed, scoffed, and harrumphed while reading. The sole qualifications of the authors seem to be that they went out and gained credit after filing bankruptcy. And while "been there, done that" anecdotal evidence is often important to me when getting advice from a friend, I'm not sure it qualifies me to trust someone to my financial future.

Some sections of the book seem downright thrown in as an after-thought. For example there are 32 suggestions on how to save money. These are clearly outdated and random. Sending letters rather than calling is no longer a good strategy. Giving up the beloved family pet is a rather callous suggestion. Whole books and blogs have been devoted to saving money... it's a topic with far more scope than a two-page chapter can cover.

The author offers biased opinions that are offensive at times. Not really offensive, and not enough to make me not want to finish the book, but I don't feel that the personal bias adds anything to the experience. (Example: Complaining about driving an American-made car, because that's all they could get approved for.)

Finally (and remember this is not a whole book review, just my first impressions), I think the advice goes against my personal goals for bankrutpcy. I DO want to reestablish credit, of course, but I'm not going to run out and lease a car. Leasing a car is one of the first action steps (after opening a checking and savings account, getting a credit card, etc.) the author recommends. After that is getting a home-equity loan.

Their list of qualifications (their approved credit) is long and impressive. Getting approved for and charging furniture and, later in a different establishment, a camera? They eschewed going cash-only though it was their initial goal, but it seems overboard. It just strikes me like all of these things would be horrible temptation for someone who can't control their spending. How many open lines of credit do we need? How many cards?

Again - I'm no expert. I've changed my opinions about a lot of things several times as I've learned more. I shake my head and laugh at my prior ignorance. So I might be judging this one too harshly.

Links to the other books I mentioned:

Friday, February 26, 2010

First Look at Paperwork

On this website I found a list of free documents for my district that are needed to file for bankruptcy.

I printed out the free bankruptcy forms, looked them over, and went back and filled in as much as I can with what I have in front of me (and while watching my toddler).

First thoughts: Damn, I just killed a lot of trees. They don't provide enough room for some things. The instructions provided on the forms aren't very clear, and I'm glad I have an attorney on my side as well as internet for reference.

Second thoughts: Is there less oxygen in here? Gasp...

Third thoughts (after resuscitation): I pity the people who have to look at legal forms day in and day out. Especially with all the mistakes people must make. Yikes!

Another relevant parent/child article


Regrets: Not Planning

I didn't find out about various ways of budgeting until a few years ago. When it was too late. I used to just say, "these are the bills that happen every month, we'll pray for windfalls to cover the rest." Okay, I didn't actually say that, but my actions did.

I currently like two theories of budgeting:

Zero-Based Budgeting and FSA Budgeting

Zero-Based is the kind of budgeting that would have kept us out of debt. We used to look at our account at the end of the month and say, "Hey, all our bills are paid, we have an extra $40, let's go out to eat again."

With Z-B you figure out all your income, all your expenses, and then make the total 0 at the end of the month. EVERY dollar is earmarked for something. And if you find your electric bill was $20 under what you had budgeted, that $20 immediately gets allocated to something else.

For years we would spend the "extra" without really thinking of it. Even though we had big expenses coming up, things we needed to plan for, debt to pay off, we'd spend it. I can't tell you how many $20 Target items we've added onto our household good shopping trips because "we could afford it".

FSA Budgeting--probably not the correct technical name, but it's what I call it--means taking all your non-monthly/irregular expenses and breaking them down over 12 months.

Let's say my normal bills total $2000 a month. But then I pay my car insurance every 6 months ($600) so that I get a bigger discount, get my teeth cleaned twice a year ($80 each time) plus an exam (another $50, let's say). I also need three oil changes a year ($30 each) and new windshield wipers ($20).

Car Insurance ($1200) plus ($160) plus ($50) plus ($90) plus ($20) = 1520.

1520 over the course of 12 months is about $127.00.

So my expenses aren't really $2000 a month or $2127 a month, but the latter gives me a chance at making sure all my occasional expenses don't fall through the crack.

Some of my actual FSA categories are:

HOA Fees
Dentist Appts
Car Maintenance (oil changes, wiper blades, etc.)
Car Repairs
Car Replacement
Doctor's Visits
License Renewal
AC and Large Appliance Replacement

Now... have I been putting anything into my FSA account? No. I'm falling far, far, short of what I need. That's part of the reason I'm having to file. Not only are we living paycheck-to-paycheck, we're only paying our basic expenses and minimum payments.

If I had the same combination of Z-B and FSA budgeting that I use now, things would have been really different.

Can I consider this a very expensive financial education? I guess.

Do I wish I had done many things differently? Hell yes. I would have less clutter, less stress, and far less debt.

So my regret is not planning beyond my immediate comfort and needs.

Pre-Bankruptcy Payments Have More Impact than Bankruptcy Itself

Article About This

Is it worth $600 to have less impact to my credit score?

Today is February 26th.

My due dates for debt are March 6, 12, and 14. We should receive our tax refund sometime in March and as soon as we do we're going to get started on our paperwork.

The attorney said it often takes 4 weeks to get everything finalized for paperwork before filing. I'm extremely organized as far as important things are concerned and can probably have most, if not all, of what I need before I even retain the attorney. Then it's a matter of transferring it onto the correct forms.

So chances are--as long as my mom's situation get straightened out--I'll only be 30 days (because it's less than 60) late on three accounts, all of which were previously current.

Is it worth $600 to avoid a hit to my credit?

From what I've read a 30 day late payment can affect you for 1-2 years. However, this article also points out that credit sometimes improve because the income to debt ratio improves so much. Will those two factors cancel each other out?

Things to ponder...

Not quite my situation, but I want to remember this

Resulting Trust

Thursday, February 25, 2010

Maxed Out

On Monday I got a bunch of books from the library. Credit Card Nation, Rebuilding Credit After Bankruptcy, and Raising Financially Fit Kids.

I started with Maxed out and finished it on Wednesday.

I highly recommend it. I was shocked and amazed by some of the things I read about the spiral of debt, predatory lending, "deadbeat" customers, pawn shops vs. credit cards and banks, legislation, national debt, and other topics.

This is an link but I found my copy at the library and highly recommend reading for free whenever you can. One of my old budget-busters was books. If I walked into a Barnes and Noble I'd spend up to $100 at the drop of a hat on books. Now I pay about $30 a year in late fees and read between 75-100 books a year. Significant savings, and I recommend it.

Due Dates: Huge Relief

I pay my bills on two separate days.

Due Date: between 2nd and 15th Paid: on the second
Due Date: between 16th and 1st Paid: on the 16th

I was fretting over my BOA account and the right of setoff and paying them for March just to buy myself extra time. I always pay them on the 2nd, so therefore in my mind I only had until the 2nd. Right?

I got my account statement in the mail and saw it's not actual due until the 12th. My Capital One card due date is the 14th. Chase is the 6th, but I'm not worried about them.

HUGE relief. I will be able to get most things transferred over by the 15th. My plan is to have my name taken off the joint account and then as soon as hubby's first VA disability check hits the new account, we'll close the old one.

If the do catch me for right of set off then at least there won't be a lot of money in the account.

Which means I can use that $350 payment for something else.


Wednesday, February 24, 2010

Spending Money

Because we're living paycheck to paycheck, we have ignored so many things that we actually need. I haven't had a chance to stock up as much, we've stretched out the time between replacing things that are worn out (A/C filter and toothbrush heads come to mind), and have otherwise been unable to spend much.

On the date that we file, any money that we have in our bank account is potential fair game for the trustee. Once the bankruptcy has been electronically filed, we can start saving again. Until then, however, we have a few things to spend. And that means we can catch up!!!

We had a very small amount in savings ($600), $159 of which went to the CPA. That leaves $440 or so. We're getting about $200 more than we need to file Chapter 7 from our tax return (excuse me, refund). And, because we won't be paying credit cards, we'll have about $600.

I am so excited!

My plans:

- Pay off the remaining six-month car insurance policy balance so that will free up $108 a month from now until June.
- Get both my and hubby's teeth cleaned and examined.
- If possible, fill some cavities.
- Replace the air filter in my air purifier (long overdue) and the filter in my vacuum cleaner (years overdue), and the A/C filter with a washable one so we can stop throwing money after it.
- Stock up on diapers and wipes and have a spare tube of toothpaste and deodorant and other items around. Hopefully I can match up some coupons and sales.
- Replace hubby's falling-apart undies and socks.
- Get my epi-pen filled (nut allergy).
- Oil changes for both cars.

I'm also going to spend a little more at the grocery store so that we have some food in the chest freezer and pantry. I made out pretty well at Publix's Italian Sale, but I'd like something other than canned tomatoes and tuna fish around, you know?

It feels weird not to try and hold onto every penny, but we can either get caught up on our needs or hand the money over to the trustee.

CPA Meeting

I met with our CPA on Monday. I was grateful that they had moved my appointment up by a few weeks; I needed to get our refund faster so that I can file bankruptcy.

He's worked for us since 2004 and I'm quite pleased with him. Because I used to have a corporation (not nearly as impressive as it sounds) all the possible deductions and such were overwhelming. We met him at the school during our business classes. A large part of his client list are massage therapists so he is aware of things specific to our business.

Last year we closed our business. Corporations offer some protection, but I didn't have enough business to justify all the extra fees. 2009 tax filing was partially to officially close our business at a federal level. (We'd already done so at the state level.) We also did our personal taxes.

I walked in and explained that I needed copies of our past tax returns. I have them, but they're in a box, stapled in nice little binders, and I didn't want to have to locate them, dissemble them, copy them at Kinkos, and then put them back together.

"Is this for a loan?"

"No. Um... it's for something with a lawyer."

"Something I need to know about?"

(Very meekly) "I'm thinking about filing CH7."

"You're not alone. You'd be surprised how many people I know in the same boat. How many years do you need?"

I know that the initial request will be for the previous three years and that the trustee can request previous years, so I asked for 2005 onward. He printed them up, stapled business and personal separately, paper clipped each year together, and handed me the stack. He was extremely supportive.

I had sent him an email confirming the amount that our return would cost this year. Apparently I worded it ambiguously and he misread it. He didn't realize we needed to do a final filing for the corporation this year. He was going to give me a deal by making our personal less since he had forgotten and charge the standard rate for the final return.

I bust into tears. I told him I had made sure in the email to ask. He felt bad and reassured me, told me he'd never bait and switch me, and that it was an honest mistake. He realized if he had looked further into his system it would have been clear what we needed to do this year and would have been better prepared. He took what he remembered for granted and didn't check into it.

He apologized some more and told me again he'd never do this on purpose. He told me he'd go ahead and eat the cost and just charge us for our personal return.

It feels SO AWFUL to be in a situation where an extra and unexpected $125 makes me panic and realize how close to broke we are. That's why I was crying. It was a horrible feeling.

I cried again when I found out we were getting more than we needed to file Chapter 7. My husband had about $1500 taken out over the year and we barely qualified for the earned income credit. I wasn't aware of several other credits this year and none of the online calculators I had used (probably because they were for calculating EIC) mentioned it.

Not only am I getting $1500 for the attorney, I'll have $299 for filing, and the additional funds for the before and after classes!

On top of that I'll have a couple hundred dollars extra. Not a lot, but enough to get my teeth cleaned, which I'd been putting off for awhile.

Another very important thing that I got out of this meeting was how we acknowledge my mom's presence. "Renting" is incorrect. First of all it's not a choice we'd make with the tax ramifications. Secondly, no lease of any kind exists. She is "gifting" us $500 a month. It still counts for the means test (and we still pass) but it doesn't make the sale of our home taxable, and since it's under $13,000 a year there aren't any tax penalties on the money.

Our CPA also told us that our bank (BOA) is particularly aggressive. Same thing I keep hearing from other people. I can't verbalize the weight off my shoulders it has been to know I'm no longer on my mom's account. And while I still have a huge to do list for transferring my bank account, it doesn't feel as hard as I had envisioned it.

Monday, February 22, 2010

Why Landmark?

I've chosen to open our new banking account at Landmark Bank of FL.


When I had a business I was a Chamber member and met one of the branch managers. He took me to lunch with an associate of his and we had a nice chat. They're nice people.

Over the next few years I had his personal cell number and email and could get in touch with any issues I had. They helped me out with a few things that were very stressful, mostly involving accepting credit cards as a merchant.

Because of that I'm going to give them our personal business as well.

Impressed. Called Back!

There was a question about my exemption amount.

We are a married couple but I am filing by myself. We have NO joint debts and the house is in his name only, as is one of our two cars.

Since the house is not in my name, do I get $1000 AND the additional $4000 for non-homestead suits or only the $1000?

He actually found out for me and called to let me know. I'm really impressed. My meeting was at the end of last week and he called Monday morning. He's not been paid a cent.

The answer: this has been challenged and the ruling was that a married but filing alone whose spouse owns their home only gets $1000.

Well, poop. I was really hoping for the $5000 total. Oh well. At least I know my lawyer follows through with his bankruptcy clients.

Feeling Overwhelmed

There has to be a good way to figure out switching over bank accounts.

My fear is that I'm going to set up a payment in the account before my husband's source of income switches over.

Also, because I can no longer simply transfer mortgage money from our joint account to BOA, I'm going to have to set up a whole new bill pay regime. I guess that's true for all of our utilities and such. I hope our new bank has an easy bill pay. BOA really did a great job with that feature... I paid everything on the 2nd or 16th and it worked out great.

I'm feeling overwhelmed. I think my dry-erase board and I are going to have to have some brainstorming time this afternoon.

Several "To Do List" Items Checked Off

- Closed personal checking and savings account, transferred money to joint account.
- Got past six months of bank statements printed for those account, since I can't access them online anymore.
- Removed my name from my mom's checking and savings.
- Opened a new checking account (joint) at a different bank.


- Print out life insurance auto-debit authorization so I can change the account.
- Call VA and find out how to change bank accounts for disability.
- Call BCBS and find out how to change bank accounts.
- Add new account to PayPal.
- Change Netflix over to new account.
- Change account for YMCA.
- Make a list of payment addresses and account numbers to set up new Bill Pay at new bank.

We've decided that since it will take about a month for all of this to get taken care of, we're going to make one more payment to BOA so they can't utilize the right of offset to take money we need out of the account.

Sunday, February 21, 2010

Regrets: Charging Necessities

Regret #2: Charging Necessities

I learned a hard lesson after the too-big house. My husband had gotten laid off. At the time he was in charge of all our money and I wasn't really aware of our money situation. I thought we were doing fine and getting by.

We'd go out to eat or buy something new for the house. We weren't going out as often or buying as much, but we weren't cutting those things out entirely.

Turns out hubby was paying for necessities on his credit card.

Here's the thing... money is money is money. If you're eating out and need to pay your electric bill on the credit card, that doesn't make it okay. It's not okay to pay something with credit just because it's a necessity. We might as well have paid our bills with his unemployment and my paycheck and then charged all the fun stuff.

Saturday, February 20, 2010

More Research

Well, I can't find anything definitive and of course my card and banking account agreements are...somewhere...but this is what I've found:

- Banks commonly put a "right of set off" clause in paperwork for bank accounts. This allows them the ability to take money from one account to cover another.

- This can be done even if it's a joint bank account.

- They may or may not have to give notice in order to do this.

- They can use a personal bank account to cover a business loan or vice versa.

Doesn't really seem fair, does it?

I've found out via anecdotal stories on various forums that people have had Bank of America attach their accounts and take money out.


So it looks like the process of changing bank accounts will start on Monday.


Regrets: Too Much House

I've decided to start a series of posts that focuses on mistakes we've made with our money. This will help me to see patterns and learn from our past. Will it help anyone else? I'm not sure, but since there's a chance it might, here goes.

Regret #1: Too Much House

My husband and I spent our first year together living in the smallest house I've ever been in. It was a mother in law cottage behind another house, 425 square feet, with a tiny bathroom (your knees touched the door and the shower barely had enough room to turn around in), slapdash kitchen (stove burners, a sink, and a fridge), just enough room to walk around the bed, and a living room. It was tiny but we made it work. When we started having issues with our front neighbor and realized the house itself was making us sick (lots of mold) we were out of there.

We moved from there into a condo that was almost exactly twice the square footage. We had a spare bedroom which was where the laundry was and a huge bathroom. It was awesome. We should have known, however, that the extra space wasn't really necessary. The massage/meditation room turned into the piled-up-dirty-laundry room. After discovering that the space was less than ideal (landlady was subletting without permission of the owner, drug deals in the parking lot, etc.) we moved out.

Hubby called me and told me he'd found an awesome place and we'd love it. I met him and the owner with the check for our first month's rent and deposit. He had written down the wrong amount so I had to borrow $1000 from my parents in order to make the deposit, but we had to find a place right away and this place was gorgeous.

It had three bedrooms. The largest one made our bed look small and had a walk-in closet and attached bathroom. The other two shared the guest bathroom. There was also a huge office, dining room, and kitchen with breakfast nook. In the center of the house was a huge living room that led out to the lanai and beyond that was a huge back yard and lake.

We spread our stuff out. We had to purchase a washer and dryer on credit as it didn't have one. We made one bedroom our meditation room and the other our massage room. I bought a second-hand dining room table and chairs for the dining room. We upgraded to a king-sized bed. Eventually we bought a pool table and put the dining room table in the massage room.

I loved many things about that house, but it was stupid.

The first year we lived there it cost us $1000 a month plus utilities. The A/C was inefficient and our electric bills were frequently high.

After the first year he raised the rent to $1200 a month.

Now, at the time, that wasn't a horrible rent. My parents were paying $965 for a smaller 3/2 house and that was considered a fabulous rent.

The reason why it was expensive was because we didn't need the space. I wish we would have moved into a 2/1 or 2/2 apartment and saved all that money.

At the time it felt like we were gaining space we psychologically needed. We justified it by claiming that we deserved it after the year in the tiny place.

So, so wrong.

Looking back I realize that we were unable to keep our belongings organized and clean in the cottage. Dust and mold got everywhere. We didn't have room to have people over and the lack of full kitchen drove me nuts. I love to cook.

We would have been fine with a full kitchen, enough room for a table and chairs, and a better organizational system. The condo would have been perfect if we'd have been able to stay there.

I guess the moral of the story is that we need to really figure out what is bothering us about a situation before we try to fix it.

Our Big Issue

Okay, yikes. This is the big one.

My mother was concerned that if something happened to her that I couldn't get to her money. She wanted to make sure I had access. So, a few years ago, she put me on her accounts.

She filed bankruptcy in 2005 after my father died. She's on a very limited fixed income (SS, and as a SAHM for most of my life, it's not much) and has scraped and saved as much as she could to come up with what she calls her "burying money".

Well, she's saved more than she needs for that. And the problem is that technically it's "my" money. My name is on it. I could write a check with it or use a check card or simply transfer it to my own account at any time.

Trustees don't care about intent. It's money that they could legally take to pay off my unsecured debt.

I will NOT screw my mom over.

I asked her if she was mad. She's not. I feel horrible. However, I did actually get some advice from the lawyer about ways to protect it.

Option 1: Open a new account, without my name, and wait a year to file.

This isn't really an option for us. If nothing else works, we'll have to make it work, but I don't see us waiting that long.

Option 2: They can't really do anything if she spends the money.

According to the lawyer they can't do anything if she decides to spend the money. If she prepays her end of life expenses, pays off her car, etc. they can't do anything about it.

I hate telling her she has to spend the money she's saved. And any money she has after that is possibly at risk, at least until our filing date. After that he said we could win the lottery and they can't touch it. The filing date is the day they go by.

I hope to do some more research and come up with some better options. I'm just not sure how that will work.

Friday, February 19, 2010

Lawyerly Advice: Where to bank

(This is a paraphrased conversation that I had with my lawyer. It is not ME giving advice, so don't take it as such and always consult your own legal counsel.)

"Is there anything that I need to know that haven't asked, or that trips up most people?"

"Don't bank where you owe money."

"Oh. Crap."

"If you don't pay a bill the bank could, in theory, take money out of any of your other accounts. I've seen it happen where suddenly a couple couldn't pay their rent or buy groceries because the bank took all their money to balance and cover the other account."

This is a problem.

We bank at Bank of America and they are my largest creditor. I owe just over $16,000 at 15.99% in a Gold Options loan. My payment is $350 a month.

I could continue to pay it to avoid having to switch banks, but that's throwing money we need away. Eep.

Going into the account each month is my husband's disability payment (the longest and hardest to change) and his paycheck (easy to change).

Coming out of that is all of our billpay payments (not too hard to change, just have to make sure we don't miss any), our three life insurance premiums (I already have the form, just need to fax it), our health insurance (a little harder, but also just a fax), Netflix (easy), and my web hosting (connected to paypal, so I have to change that over, but not too hard).

The hard thing is going to be closing the old accounts, opening a new one, and making sure things get paid when there's money. The disability is going to be challenging if it doesn't get moved over.


I know this will be work. I know it is. But it's little things like this that are more about coordinating twenty pieces of paperwork that are going to annoy me.

I found out that it will take about a month to go over the paperwork once I turn it in. Both the lawyer and his trustee/lawyer partner meet with me, revise, meet with me, revise, etc. until it's perfect.

I have to wait until we get our tax refund to do that, because if we file prior they will seize the money, rather than being able to use it to pay the lawyer's fee.

And also before I pay so much as a retainer I have to figure out how to deal with our major issue (but that's another post).

He did say that if I was to take one thing out of the whole meeting it would be to not bank where we have debt. The second thing would be to not file for bankruptcy until we've gotten our refund in our hands.

Meeting with Second Lawyer

I met with the second lawyer today, and he's the one I'm going to go with.

Board Certified? Yes, over 14 years

Free Consult? Yes

Consult Time Allotted: 60 minutes

Consult Time Actual: 90 minutes

I was met by his wife who I had previously talked to on the phone. She struck me as a motherly but no-nonsense kind of gal with an easy smile and a head full of facts. She gave me a stack of paperwork to fill out.

The other attorney had me fill out paperwork, but it was all about his office and fees and such. This one actually asked me questions. Lots and lots of questions. I read and write fast and it still took me 10 minutes, most of which was checking "yes" or "no" boxes.

She took my forms and told me he'd be with me in just a minute. He was true to her word.

He was much warmer than the other guy. He smiled, had a sense of humor, and struck me as an actual person who saw me as a person in return. He answered all of my questions (and then some).

They charge $1500 for their services.

I felt very comfortable with him. I think if I had interviewed 10 lawyers, I would have picked his personality and experience. There are (factually) three board-certified attorneys in the area. The first one I won't work with, the one today, and another who works with creditors rather than filers.

He will not be at my 341 meeting. He works with two other lawyers, one of whom has worked (and still works part time) as a trustee. I'll be meeting all of them and they'll be fully knowledgeable of my case. It saves him the drive to Tampa everyday. The man he works with (the trustee) comes into the office a few days a week, the woman (also board certified) works and lives in Tampa.

I'm going to put some of my issues and advice he gave in upcoming posts.

Thursday, February 18, 2010

Link to Middle District FL and Some Amazon Resources

I'm not thinking about filing for myself, but I found a resource on for DIY law forms and instructional books. I'm not sure what this form packet contains that couldn't be found for a free search online... I've found the middle-Florida website to be very comprehensive. (

Bankruptcy, Do It Yourself (Nolo Press Self-Help Law Books)


I've been rather calm the past few days. At least until last night. We have a few things I'm particularly concerned about and for some reason I was freaking out.

I spent a large part of yesterday on the BK boards reading about middle Florida cases. It seems our Trustees are particularly good at their job (aggressive) and that in quite a few Tampa cases an appraiser is sent to the house.


I printed out form 22A, which is the Chapter 7 Means Test.

Even though I "passed" in the first section I completed the whole form. Using the IRS and Census numbers (the form links directly to the appropriate website) I entered the information as directed. We have negative amounts at the end of the month, and that's without deducting for our student loan payments.

I'm feeling a little better because of that.

3 hours until I meet with the second attorney. I've decided there's no way I'm using the first one. 20 minutes is NOT long enough to make this kind of decision AND he lied about being the only one in the area who's board certified in bankruptcy.

Tuesday, February 16, 2010

To tell?

I'm debating who to tell, or whether to tell anyone.

One of the things I dread is that confessing our financial state will allow a friend or two to feel like they can give their take on it. I don't want to have to explain everything. I don't want to have to be convinced not to do this.

At the same time it's all I've been thinking about recently. I've been making lists in my head, trying out scenarios, and figuring out what to do after all this is said and done. It would be nice to have someone to talk to other than my husband and my mother.

Monday, February 15, 2010

Looking Around

I realize that I'm jumping the gun by making my list (and checking it twice) but I want to have an idea of our possessions before I have to fill out the official paperwork.

I've listed some things singly and others by grouping. I didn't list "Spatula #1" and "Spatula #2--plastic wide" but I did list some furniture separately.

My list is mostly complete. I've left off some of the things in boxes that I don't recall the contents of, but I have plenty of time to figure those out.

I'm only allowed $1000 under Florida Bankruptcy Law and I'm over that. Some things I don't mind losing at all. But others... how do I determine what's mine and what's my husband's? A question for the lawyer we pick, I realize, but it's on my mind now.

So far I'm staring at the list in a bit of shock. How is it possible for us to have almost $30,000 in credit card debt and have nothing nice to show for it?

How can was be paying $600 a month towards things we've already bought? That's three car payments! And I don't have anything nearly as nice as one car, let alone three, laying around.

Damn. It's so easy in the moment. So easy to say, "well, let's go ahead and get this. We'll pay it off when (fill in the blank)."

And when emergencies happen, and we're stretched so tight, there's no choice but to put the car repairs or emergency doctor's visit on the card.

It's been a long time since we've charged anything (car repairs over the summer, prior to that it had been at least six months if not longer) and I'm proud of us for that. But sad, really sad, too.

I've put my family in financial chains and have nothing to show for it.

Moved Appointment

I moved my appointment with the CPA from mid-March to this coming Monday. Why? So I can get my tax refund faster and pay the lawyer to file that much quicker.

It wasn't hard. The CPA is very busy but I told the appointment maker that I needed to get my refund faster. I mentioned I had a deductible to meet and had to have laproscopic surgery.

Which is true. The first few months after I'm no longer required to make the $600+/month payments I'll be setting aside my $2500 deductible.

I had honestly considered doing the surgery this month, setting up a payment plan, waiting a little longer to file and then... get thrown into jail for fraud. I can't take on a new debt knowing I won't be able to pay it.

So, instead, like everything else in my life, I'll have to wait until I can pay cash.

BK Forums

I am not alone.

There are many others out there who are going through the same thing, have the same questions, and others who have already gone though it and have unique insights.

Like, for example, today. I was commenting on a post about when to stop paying your credit card bills. If you know you're going to file, it's money down the drain.

My concern is over the phone calls and letters... yikes! I'm nervous.

One very helpful user posted a response: "If you're filing, STOP PAYING. Don't waste your money. If you feel the urge, ask yourself...would I be willing to pay $600/month to avoid mail (that I don't have to read) and phone calls (that I don't have to answer)?" (HakunaMatata)

Duh. Freaking duh. It hit me. What a brilliant response. That's absolutely true, isn't it?

Second Consultation Scheduled

I just got off the phone with another attorney's office and I'm laughing.

According to the first lawyer I met with, he was the only board certified bankruptcy attorney in the area.

The first lawyer gave 20 minutes.

"I'd like to schedule a free consultation for bankruptcy."
"Is there anyway to do this over the phone? I'm interviewing several lawyers and at the last place it took me more time to get my toddler in and out of the car than it did to meet with the attorney."
She told me I had to make arrangements for childcare, this is an important decision, and that the attorney loves kids but I couldn't afford the distraction. I told her I'd do my best and we found a time.
"How long of a consultation does he give?"
"Up to an hour."
"An hour? Really? The last place only gave me 20 minutes."
She was appalled. 20 minutes is not nearly enough time to make such a critical decision. She laughed and said she guessed I didn't meet with a board-certified bankruptcy attorney.
"Actually, he was. (Name) also said that he was the only board-certified person in the area."
She was pissed. Apparently she knows this guy.
"(Name), my husband which is why I'm taking it so personally, has been board certified for twice as long as (name)."
"Oh my. Well, we both learned something new today."

I'm looking forward to meeting this new lawyer. I have a list of five others in the area that I'll be contacting to meet with, but I'm going to do one at a time. My mom says this way I can "get a feel" for what to expect, the language, etc. and have enough time to process in between.

Sunday, February 14, 2010

First Lawyer Meeting

We decided to talk to a lawyer and most in the area offer free consultations. It was easy to schedule.

On Friday I made my way through the maze of the office park and entered the office. The waiting area was small. There was one reception desk and three waiting chairs. The woman there was very friendly and helped entertain my 2-year old daughter.

There was a stack of papers I had to read and sign. It outlined what services he was offering for free and what he was NOT offering. It made sure I knew that each 30 minutes beyond the free 20 minute consultation would cost $150. There was lots of other information as well. I was impressed that it sounded like it had been written by an actual human being.

The lawyer came out of the conference room with another client. He shook hands and asked me into the room by name.

He was very tolerant of my daughter and I managed to ask my few questions.

The time flew.

He asked what my husband makes, what I make, and how much debt we had. He reminded me student loan debt is not dischargeable and I told him I knew. He said we shouldn't have any problem filing for Chapter 7.

I asked about liquidation of assets and how that works when only one spouse files.

Our newer car, in his name only, may or may not be an issue. We received our tax credit for purchasing a house (also only in his name) and used that to pay off the car in December. If an argument can be made that half the money was mine, it might mean that something has to come out of that. The longer we wait the less likely it will be an issue.

We need to list all belongings and be as thorough as possible. He said that because our house is only work 134,000 they wouldn't be looking for us to have too many assets.

My other problem is my mom's bank account. She's almost 70, retired, and has been saving up "burying money". Because my dad passed she put me on her account. Therefore it looks as though I have $10,000 saved up. I don't. It's hers.

If I'm just an authorized signer then it's not an issue. If my social security number is on the account then it's technically "mine". "They aren't looking to take an elderly woman's last dollar from her," he said, "but it will depend on which trustee you get and how aggressive they are."

I talked with my mom about. If there's a chance her money will be taken then there's no way we're filing.

"What's the money for?"

"It's so when I die you can take care of the body without it costing you anything."

"Well, what if we look into prepaying for the cremation and the urn; it might cost less than you think and then I won't have to take care of that detail when I'm mourning. Also, you might have enough money left over to pay off your car loan and you'd have an extra $200 a month."

She thought that was a great idea and asked me to look out for a good deal.

So, we'll see. I'm going to meet with her at the bank early next week and get taken off the account. I'll have her add me back on as soon as the bankruptcy is complete.

I wish the lawyer had given me a better answer. I want to protect her assets; it's very important to me.

I did also find out that I can safely use our upcoming tax return money to pay for the lawyer.

I'm going to call on Monday to set up a few more interviews. I hope I can do them over the phone. Honestly it took me more time to unload the kid and put her back in the car than I spent with the lawyer.

Impression of the lawyer: Cool and collected, slightly reserved. Emotionally neutral. Claims to answer email questions, which is good for me. Over 30 years experience. Only board-certified bankruptcy lawyer in the area.

Cost: $1500 plus $299 filing fee. Paid half and half if necessary.

Saturday, February 13, 2010

Coming to conclusions

In June my husband's student loans will no longer be in forbearance. We have one more year that we can put them off if necessary. He owes $60,000 and his payment will be about $320.00.

In October my student loans (about $10,000) will also come out of deferment. I can also defer another year. Payment will be around $100.

Right now we're making it. Just. I can pay every bill we have on time. I can make minimum payments on my credit cards.

We're making it. We can go out to eat about once a month and afford Netflix. We each have $20.00 a month we can use to buy little things for ourselves or maybe visit a Starbucks.

We're making it. Because we're ignoring a lot of things we need.

I have a spreadsheet with our budget. It has tabs for each month. I have month-specific expenses and income in one section and then regular expenses and income in another. This allows me to mark what's been paid, what's been scheduled to be paid (we use BOA's Bill Pay feature), how much is budgeted vs. how much is spent, and so forth.

One category is FSA. That stands for "Freedom Savings Account". In this account I (need to) put money for all the things that are occasional expenses. An example would be our yearly HOA fee, renewing my license, getting our teeth cleaned, car repairs, etc.

I need to put at least $236.00 in a month just to cover the bare basics of "we're SOL if we don't pay this". In order to hit all the necessities I need $475. In order to meet other goals, such as vacations, I need even more.

I've been putting in exactly $0. There's no room.

And it's frustrating. I've cut down my expenses tremendously but something always comes up. When business slowed and I decided to be a mostly stay at home mom I canceled my disability insurance. We canceled AT&T and went with Net10. I found a much cheaper web host for my business website. We used our tax credit to pay off the car loan. I started using coupons. And on, and on. And still we're not doing better than making it.

What happens with the water heater (original with the 1987 house) gives up the ghost? Or when the A/C (10 years old, horrible efficiency rating, and no longer serviceable) stops working? We're screwed.

And when the student loans can't be put off anymore?

I can make all of $75 more room in the budget by cutting out every nonessential we have.

We'll be making hard choices. Hard, hard choices.

We talked a lot and decided that it's silly to spend the next year struggling and stressed when we're going to end up filing bankruptcy at that point anyway.

If we file bankruptcy now we'll have a year to get caught up and put some money in the bank. We'll be able to pay off hubby's student loans in the next ten years. We'll be able to get our teeth cleaned and cavities filled and replace the water heater.

Friday, February 12, 2010

My Mom's Bankruptcy

My personal view of bankruptcy has never been a negative one. I never thought about it too much until my mom had to go through it in 2005. It was a huge relief for her and so my view became it was a good thing when it was needed.

My dad was in upper management at a local church. The visiting minister wanted to bring in his own guy and rather than have a split congregation my father bowed out. It took him a long time to find something. He sold shoes, his usual fallback job, in the meantime. A national charity hired him as their local executive director. Within a year he was laid off again due to internal changes.

He had been out of work for several months when he was diagnosed with cancer. This was late August. His health insurance was taking forever to approve his chemo and he didn't have the money to pay for the first treatment himself. I still wonder if he'd be alive today if he hadn't had to wait so long.

They started the process of bankruptcy together. He died October 9, less than a month from his 60th birthday.

My mom continued the process. We moved in with her in December and later that month I drove her to Tampa.

When we got there we checked in and were directed into one of the connecting rooms. We waited in a large room that had a table with four seats in the front. We waited for awhile. I was surprised how calm everyone was. Nervous, yes, but no one was in tears or hysterical. There were no sounds of begging and pleading coming from the front. Mostly everyone steeled themselves, went up, spent a few minutes chatting, and came back with a slightly stunned yet relieved expression on their face on the way out the door.

She was called up and her lawyer met her at the table. (Her lawyer was Melanie from Jodat.) was surprised that she didn't recognize her or that they hadn't conferenced prior. My mom spent about ten minutes answering questions. The man at the table mostly nodded, looked over her paperwork, and was very polite.

The whole process was a lot faster than I had expected. I was expecting a typical court room (I've done jury duty several times) where everything was extremely public and somewhat hostile. It was nothing like that.

Afterward Melanie talked with us for a few minutes, answered questions that my mom had and, to my surprise, answered my questions as well.

I found out that since my father had reconsolidated the Parent Plus loans he'd taken out for my college, they were forgiven and I wouldn't have to repay them. (The original loan that I cosigned was considered paid off by the new loan.) I also discovered that my mom was not responsible for my father's medical bills and could not claim them in her bankruptcy. She received far too many bills after, but she could throw them out guilt-free.

This was prior to the laws changing, so I have no idea how my court date will go, but I'm expecting something similar.

I felt bad for my mom. She had retired a month before my dad was laid off and her employer had replaced her before she left so she could train her replacement. My father was supposed to receive SS disability that was far more than what she got for her retirement, and then she got nothing from my father's.

It was a huge relief to her to not be saddled with all the debt they had accumulated. She felt stupid for not knowing about it until he was diagnosed. I remember she showed me a spreadsheet with thousands of dollars of debt. I don't recall how much it was now, but I was really impressed and surprised by the amount of debt. I know she worried about how she'd make the payments. Bankruptcy was the right choice for her.

After her discharge her lawyer touched base a few times to make sure no one was harassing her and made sure she knew that if they did to contact her. Most of the contact was thru form letters.