Question: I am about to file (no, this isn’t for a friend, it’s for me). And I have read sooooo many threads on google about people posting, “for a friend.” B.S. This is mine. =) The investment in DC (my initials) international made by Chase, MBNA, NextCard, and CapitalOne have been Enroned.
Ok, my sniveling, sleezy, “I’m-not-paying” remarks aside, here’s the scoop on Louisiana bankruptcy:
1-You don’t get to keep your car unless you have negative equity in it and intend to pay it back. This includes $500 junker cars that barely run and rusted out not running cars. The caveat to this is if you get your employer to state that you need the car for the job.
2-You ain’t filing chapter 7 (get rid of it all), you will file Chapter 13 (modern debtor’s prison—if you’re single you keep the 1st $10,000 of income and the rest of it goes to your debtors for 3.5 years or until they are paid off).
Talk about getting screwed in a bankruptcy….
Anyway, here’s a story that will get all of the pro-bankruptcy reformers out there all riled up:
I make $50,000 a year but I’m fed up with the technology industry (I’m a programmer / network administrator). “I see stupid people. But they don’t know they’re stupid.” I’ve never seen such stupidity in the technology sector as much as today. I’ve had it with this line of work and I’ve decided I want to go back to school.
So I need to go back to school to take the 3 classes I never finished 7 years ago and get my BS. That school was LSU. Louisiana is NOT very immigration friendly. Registering the car means paying taxes on it. My car is brand new so it makes more sense to rack up $80 tickets for expired registration than to pay $2000 to register the car. Also, the out of state tuition at LSU is WAY too expensive ($2700). So, I’m not going to be able to go until I spend some time in the state.
So, I moved back, didn’t register the car, and I’ve started saving money because there will be no financial aid the 1st year b/c of the last year’s income ($20,000+ = not a dime of cash for school other than unsubsidized loans).
Well, I can’t afford to wait to go back to school too long (I’m turning 30 soon). So, I have decided to give MBNA and others the pulp fiction red ball gag treatment.
What’s weird is that I owe MBNA $7000 and they haven’t come after me. They have my SS# so its not like it’s hard to find out where I’m working. I can save up about $15,000 to go to school with starting in Jan 2004 and then shooting for medical school.
Now I’m trying to decide what to do with the car…. that NEW car I mentioned earlier. It’s worth $15,000 and I owe $22,000 on it. I could let them repo it and hope they don’t come after me for the $7,000 difference. If they did, it would be an open and shut case in court – they’d win the garnisment. But some creditors are notoriously bad about garnishing in a timely fashion. I’m debating taking the risk of them not garnishing and saving the extra $400 / month for school and buying a $1000 car that will probably die near the end of the year when I go back to school.
Then, I go back to school and file bankruptcy (chapter 7 b/c there is no income when in school). The student loans of course will go into in-school deferment. BTW – don’t EVER go into default on student loans. Live on the street first. Default on student loans = bad news b/c there is no way to discharge them in bankruptcy.
Then, after about a semester of not having a car, I’ll buy one with the mattress stash for $4000.
Answer: According to my math you gross around $4,000 per month. Even at a 30 percent tax bracket that still leaves you with $2,667 net. Your list of expenses only comes to $1,510, leaving a balance of $1,157 that is unaccounted for. Where does the rest of the money go?
If I were you, I would pay off my credit card balances first, since their interest is probably the highest. I would then consider geting your car balance down to what it is worth and getting a different car. Preferably one that you can pay cash for and not have $400 a month payments on. Then your car insurance would also be lower since you would not have to carry as much coverage. You can save a lot of money on your phone. $75 is A LOT of money for a telephone. Likewise, you could also move to a less expensive home, or consider sharing by moving in with someone else or getting a roommate. As for your “drug” habit. Get rid of it. It’s illegal and expensive. There are better ways to make a bad day seem nice. Volunteer to read books to the blind, work at a hospice, teach developmentally disabled persons how to care for themselves. Do something positive and you will find your state of mind improve.
I would register your car as soon as you move to Louisiana and I would totally forget about the bankruptcy angle. You make enough money to HONORABLY pay off your debts and proceed with your life. It would be wrong to use the “system” to be financially irresponsible to your creditors. You might even have to get a second job to make the extra money that you would need for tutition, but isn’t doing something honorably better than lying and cheating your way out of debt? Of course it is.
Good luck
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