In an effort to try and save us some money, especially since I had opened my 5th consecutive increase from Geico. I thought maybe shopping around for a new insurance company might be in order. Don’t get me wrong here, we’re both good drivers with no accidents since or tickets. Our monthly payment for both cars is $150. I know compared to other people that is a low number but thinking back to when we signed on with Geico (with the same cars we have now) it was only $103.98 per month.

I called our broker that handles our home owners insurance. Figured I’d complain to him too Hey, why not? He said he could easily get me into another company (Hanover Insurance) and is positive he could do better than Geico. So I gave him the information he asked for and waited patiently for his return call.

About 3 hours went past before he called back. I don’t know if he actually ran our credit or if the explanation just came back with poor credit score. But his best offer to us would have resulted in an increase of $104 per month, from what we’re currently paying. He said our credit was 100% the reason and had suggested that we try again in a few months. I’m thinking he was just being nice, but then again I had mentioned we’re trying to get a mortgage modification… so maybe he’s thinking they’re running my our credit report a lot? I don’t know, but it was embarrassing, to say the least.

Needless to say we’re staying with Geico. Under his suggestion (and explanation) I had increased our limits on Personal Injury Protection (PIP) and a few other coverage items. By the end of the day we still stayed with Geico but wound up paying $173 per month. He said the coverage we had was one that teenagers with no homes or assets have. He explained that (God forbid) I were to hit someone, we could have lost our house because of how “under insured” we were. That’s the last thing we need.

So to answer the question Can Bankruptcy hurt my insurance rates the answer is YES!

College Loans

I’m ok with calling it luck, I’ll call it what ever you want to call it as long as the ending turns out the way this one did. In my post from two weeks ago (Denied for a student loan) I shared with you our latest problem stemming from our bankruptcy. If you didn’t read it, in short, the company who funds the Salle Mae loans ran my wifes credit and discovered her our bankruptcy. Here’s what they said:

You have authorized New York State Higher Education Services Corporation (HESC) to obtain your credit history to determine eligibility for federal financial aid. To qualify for federal financial aid, you must meet certain eligibility requirements, which includes a review of your credit history, The information contained in your credit report indicated for federal financial aid is denied for the following reason:

DENIED - THE BORROWER HAS A DEBT DISCHARGE IN BANKRUPTCY DURING THE PREVIOUS 5 YEARS

It was a horrible few days for us. We jointly made a decision for my wife to stay home with our children during the days and go back to school at night. It was working flawlessly, especially when my side business was generating money. Even after the floor fell out on us and we were forced into bankruptcy, we still kept with our plan of kids during the day and college at night (for her). Think how great we both felt when she finished her Summer class and there was only 5 classes left for her to take. It’s like seeing the light at the end of the tunnel. That was until we received that letter. That letter that said we won’t cover you anymore and deal with it yourself. It was heartbreaking to look at her read the letter.

A few days later and the school finally called us back. After explaining our situation to two different people and desperatley hoping someone would take pitty and offer her a job, in exchange for free schooling. We were very pleseantly surprised to learn that the funds had already been dispursed from Salle Mae and received by the school. WOOHOO!!!! That means the duration of her schooling is paid in full and we’re in the clear.

How awesome is that!

Now I just pray that the first student loan payment doesn’t start until she graduates… I guess beggars can’t be chosers though. If it happens it’s certainly the lesser of the two evils.

- Joe

We’ve learned to live within our means. We now cut coupons and print them from the internet. We only buy items that are on sale and NO MORE unnecessary purchases. “Period, End of Story” a quote from Kate Goslin (Jon & Kate + Eight).

Yesterdays news wasn’t as exciting. Actually, it was our first big reality check that we’ve filed for bankruptcy… we’re bankrupt!

We received the following letter:

You have authorized New York State Higher Education Services Corporation (HESC) to obtain your credit history to determine eligibility for federal financial aid. To qualify for federal financial aid, you must meet certain eligibility requirements, which includes a review of your credit history, The information contained in your credit report indicated for federal financial aid is denied for the following reason:

DENIED - THE BORROWER HAS A DEBT DISCHARGE IN BANKRUPTCY DURING THE PREVIOUS 5 YEARS

I don’t even need to tell you the hurt and pain that my wife is feeling. She literally is 5 classes away from finishing college, doing something for herself and getting a job that she has intrest in. Now, because we struggled and couldn’t pay our bills on time, because we did what many other American’s are forced to do we’re back to square one.

Based on her student loan paperwork, we will receive our first bill 6-month’s after she stops going to school or no longer needs to borrow money. That means in 6 months we’ll be hit with another (large) monthly bill. Here’s the question I woke up to: does she not do her internship for this year (that is required of her to graduate)? Does she just get a job to pay off the student loan bills for the career she won’t pursue?

I know I sound gloomy and I realize it’s only Sunday and that I haven’t spoken to anyone on this matter but man does this suck! How the hell are you supposed to get by? We will make all of our necessary phone calls tomorrow and this week… hell for as long as it takes till we figure this out.

I promise to post more later in the week as we hear more or come to some decisions.

Thanks for reading, I hope it helps… sure did help me to vent

- Joe

Prior to our meeting with the bankruptcy trustee our attorney reviewed the fact that we were in fact keeping our home and that I did want to re-affirm my auto loan. The bankruptcy trustee also verified this information. We did not lose our home or car. Don’t be afraid of that. Unless you are behind on your loan it is in the bank’s best interest to re-affirm your loan and keep you making your payments.


My attorney did emphatically warm me that I can’t fall behind or miss any payments. If I did then (as he said) “all bets are off”.

I/we did not lose our furniture, wedding ring, my wife’s car (with low equity/value), and my computer(s) (even though Dell was listed as a creditor), they didn’t take our dog and they didn’t take our TV. These were questions that readers of the site have asked me in emails.

I will post more in the days ahead. In the mean time feel free to contact me directly and from the bottom of my heart, thank you for clicking on the advertisers below these posts. It’s those small ads that help me pay the bills to keep this site alive.

And so it begins….

After swearing to tell the truth (so help us God) he asks us to first question:

How did you end up in Bankruptcy Court? I explained our situation and that companies were not spending money in my industry anymore.

His question seemed sincere. Or at least I’d like to think it was. The next set of questions were the same questions he asked everyone else:

• Did you read the schedules before signing?
• Did you list all of your assets?
• Did you list all of your debts?
• Are the schedules accurate?
• Do you want to make any corrections to the schedules?
• Have you lived in this state for the past two years?
• Do you owe anyone domestic support?
• Are your cars insured?
• Have you destroyed your credit cards?

Then came the other questions our attorney prepared us for:

• What did you do with the money from your second mortgage?
• Do you own any vacation properties or timeshares?
• What did you do with your tax return?
• What did you do with your stimulus check?

He accepted the answer we gave about our second mortgage. All of his questions were asked as his head was faced down reviewing our folder, making notes and checking off boxes. When he asked his last question of what we did with our stimulus check and I responded that it helped us pay the attorney’s retainer, he looked up, smiled and said NOTHING FURTHER. And like that, we were bankrupt.

I was waiting for a card or someone to stamp loser across my forehead. I just got a smile from the transcriber and a notion from my attorney for us to go! We walked out of that courtroom debt free. We drove to our home that we own (well with the mortgage company) in our car. We didn’t lose any of our assets.

As we left the courthouse my wife grabbed my hand. I wish there was a camera behind us as we exited the courthouse. It would have made for a great picture. We left our debt behind and we’re starting over.

Bankruptcy Court:

The day had finally arrived and we were to be at the Bankruptcy Court by 10:30am. This actually worked good for us, we were able to get the kids on the bus and based on what they attorney told us, we’d be home in time to pick them up from the bus. The attorney had requested that we meet him at 10am for a final review and some coaching.

As we drove to the courthouse we both stayed silent. Everything that could have gone through my mind (in that ride) did. Like, why is she so quiet? Is she that disapointed in me? What would the judge ask us? I wonder if we’ll get our next tax return. Did I disclose everything? Why isn’t she saying anything?

Then out of the horizon (or the right from the parkway) we saw it. The Courthouse. It stood as tall as the sky would allow and the parking lot was sea of cars. She reached over and took my hand and said “we’ll get through this together” and like that I found a spot and parked my car.

We had to go to the 5th floor, which was clearly labeled “Bankruptcy Court“. I kind of wish they had a seperate elevator or entrance for the Bankruptcy Court. Because everyone in the jam packed steel box had selected every other floor in the building but floor five. You knew as your finger extended to press that dreaded number five that everyone was going to think down on you. They’d know that you can’t pay your bills and that you’re asking Uncle Sam for help. Whatever… Fuck them all, this is my family we’re talking about. So yeah it hurt to press that button and have those stares or fake smiles come my way but in a few minutes/hours we’d have fresh start.

Our attorney was speaking (loudly) to a single mother, outside the doorway. He instructed us to go inside, sign-in and read a form. The waiting room was full. Not a seat in sight. I wasn’t sure what to expect when entering this room but I was surprised to see average Joe’s, like me. Of course there was the one’s that just screamed lazy or those that had given up but they were in the minority.

The buzz in the room and out in the hall was the three to four hour delay the courts were having. After our attorney finished with the women he was speaking to he came over to us. We showed him all the paperwork he asked us to bring. He then started firing some test questions to us that the judge/trustee will ask us:

• Do you have any timeshares?
  - Answer: NO!
• What did you do with your tax return from last year?
  - Answer: Fixed the roof over the kids room.
• What did you do with your stimulus check?
  - Answer: Used it for my attorney’s retainer fee.
• What did you do with the money from your second mortgage?
  - Answer: Paid down bills and oil.
• Does anyone owe you any money?
  - Answer: NO!
• Are you involved in any litigation’s that will bring you money?
  - Answer: NO!

He seemed a little concerned over the second mortgage. He said that as far as the courts are concerned I could have that money in a shoe box under my bed. He instructed us to tell the truth and be prepared to state the creditors we paid if the trustee asked us.

It was 2:30pm and we still had not sat with the trustee. Our first child is out of school and at our bus stop by 3:35pm, so my wife was plenty concerned. At this point we were in the room with the trustee in last row of the room listening to all of the other hardship cases coming before us. For the most part the were the same questions for each person, the trustee would then say nothing further and then call the next person.

When the next person was called my attorney had stood up and advised the trustee that this person was his client but he would like to have us seen first because our child was not going to have anyone to meet them at the bus. The Trustee was more then happy to oblige and so we made our journey to the front of Bankruptcy Court.

2008 was a rough year for us but 2009 has started with our heads up and spirits high. I wanted to share this with you and get you caught up with what has happened…

My next post will be about the actual day in court. People should be prepared for the questions they will be asked, what they will see, what they should bring, etc. What you’re about to go through or seriously contemplating should be clear to you… I hope this helps.

- Joe

Your attorney will (or should) go over everything you’re signing. We had a few changes to be made:

· 401k value was listed as $9,000. That was removed from the account a few months prior and got us caught up on the mortgage payment. No problems in changing it and no problems with us doing that.

· Value of my wife’s car was listed at $13,000 instead of $3,000. That’s a big mistake and one that would have hurt us in the courtroom. I’m told that I gave that number to them, but I have a hard time believing that I would ever estimate the 4-door Chevy @ thirteen thousand dollars. Never the less, it was fixed.

Be sure you look over the papers that show which loans or assets you’ll be keeping. For us, it was my car and our house. The auto loan will need to be reaffirmed, which just means you’re promising to keep repaying the car loan, on time and they promise not to reposes it.

I carefully thought about the car situation for a few days and the thought of just giving it back to the bank and including it in my bankruptcy was certainly an option. An attractive one at that. I really owe a lot of money on this car and will most likely have to put in $1,000 or so when it comes time to get a new car and pay off this loan. I kept it because every website and auto ad that I read that specializes in bad credit auto loans or car loans for people in bankruptcy all say it’s no problem as long as your bankruptcy is discharged and you have not had repossession in the last 12 months. My car is not in a good place, so this would certainly hurt me and my plans for a more reliable car this year.

So we’re all paid now. The attorney, the courts, it’s almost all done. Our court date is a few weeks away. All that we need to do now is complete a class online before our court date and show up at court. The attorney made it very clear that he doesn’t like to wait. We were told to be at the courthouse 45 minutes early and to look for him outside the courtroom. He told us which papers to bring and me what not to say, which was pretty much everything. See, I have a tendency to over-explain. Keep It Simple Stupid is the term he used and one I swore to for that day.

As we left I shook his hand and thanked him for everything. I joked that I enjoyed working with him but hope to never be in this office again. He reminded me that he doesn’t just handle bankruptcies and suggested that once we’re back on track he’s always here to help with businesses, real estate, etc. Thanks for the smile, good wishes and high hopes. I hope that’s the case too.

Can I keep my Car after bankruptcy?

Can I keep my house after bankruptcy?

It’s a simple question and one that everyone in this boat has on their mind. What can I keep after I file for Chapter 7 Bankruptcy. We declared that we wanted to keep our home and car. Because the declared value of our jewelry (i.e. wedding ring) was what the court would consider low, it’s not even a concern. Regarding furniture, televisions and computers (like those I bought with the Dell credit card) are not a problem. They were purchased between 2-3 years prior to us filing for bankruptcy and depreciation has made their resale value very low.


Lets talk about the car(s). We own two cars:

1. 2000 4-door (family car) Chevy which we own out right and has no loans/liens on it. The attorney used Kelly Blue Book.com as a means for appraising the vehicle. I don’t know that I necessarily agree, but he declared its value at $1,800.
2. 2000 4-door Hyundai which I currently owe $3,500 on.Kelly Blue Book values my car at $1,200. Again, I disagree with that but it shows that I have reverse equity on the car and makes repossession from the bank an option that they wouldn’t want to take.

Seriously, if they took the car from me they’d need to recover the loss on the difference, which would never happen. To allow me to reaffirm the loan is a much smarter move. So after we file and the court declares it final, the banks attorney will send the reaffirmation paperwork. It doesn’t lower my payments or increase any more time on the loan, it just tells the bank that I promise to keep paying it.

Now the house on the other hand is fairly easy (as I understand). The new laws do not require you to reaffirm your mortgage with your lender. There will be no need for new paperwork or the dreaded thought of going through closing again. You keep your house, you keep your mortgage payments and in a few months after you file, you’re an ordinary customer to the bank again.

My next post will be about preparing for the hearing.

- AJ

“It’s a big deal” he said, but nothing that I can’t fix if I go directly to my local post office and send the attorney certified funds for the two month worth of payments. My attorney made it very clear that even though I was making these “catch up” payments that I would be responsible for court costs and the attorney fees. We were prepared for a bill around $900. All because I was waiting for my checks to show up. What a nightmare!

As I mentioned, I spoke with the attorney on a Saturday and had to not only withdraw $6,236 from my checking account but I needed to send the funds to the banks attorney so it showed for first thing Monday. I was able to find a post office open past 2pm by visiting http://www.usps.com/postmasterfinder, Overnight mail, certified return receipt for delivery exactly 6 towns away from my house cost me $34, not to mention the fees I had to pay for the money orders. Man was this a mistake. I hope that by me writing this someone somewhere will read it and maybe learn from this mistake. Please, do yourself a favor and MAKE SURE YOUR MORTGAGE PAYMENTS ARE UP TO DATE prior to your attorney filing with the state.

Fast forward a week… It turns out that my attorney is friends with (and golfs) with the banks attorney. He was able to get my fees reduced to $350 for the attorney fees and $150 for the court fees. No fee was charged from my attorney to us for his work. So I guess $500 is better then $900 + the fees my attorney could have charged us.

This was a very expensive lesson.

- AJ