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Personal Bankruptcy Story
On my 48th birthday, I found out I had skin cancer. At first, everyone was sure that a simple operation would take care of it, but in the end, I needed a second operation and chemotherapy.
It may not sound like it, but after six months, I felt lucky. I had made a full recovery, and my cancer was in remission. I felt ready to celebrate until I took a look at my family’s finances. Under the burden of six months’ worth of unexpected medical bills and two kids in college, I couldn’t see any way for us to stretch our budget to meet the demands of the coming year.
I never thought I’d be filing for bankruptcy, but an attorney friend of mine paid me a visit and explained how a Chapter 13 bankruptcy would allow me to keep my family’s house, our car and other possessions and propose a payment plan that a court could approve. I could actually continue to pay back what I owed (something I felt very strongly about) over three or five years. After the payment period, any additional debt would be discharged (i.e. written off). Our home equity was already tapped out in loans for our children’s education, and after taking an honest look, I took my friend’s advice and decided to file for personal bankruptcy under Chapter 13.
I first had to complete a credit course from a certified credit counseling agency to inform me of all my options and alternatives to bankruptcy. Next, my attorney filed my petition to the court which appointed a trustee to oversee my case. The trustee made sure I was eligible to file for Chapter 13 and explained I would be making my payments to him, which would then be divided among my creditors in accordance with the repayment plan. Everything was going smoothly so far, and I made the first payment under my new plan.
The 341 meeting as they called it ended up taking only about five minutes, and my
trustee asked several questions to make sure I’d had full understanding of the debts and their terms when I’d agreed to take them on. He also made sure I understood the effects that filing bankruptcy would have on my credit.
About a month and a half later, my trustee was back in court for the confirmation hearing, but I did not have to attend. He had told me before that he was confident the court would approve my petition and my repayment plan. I got a phone call late in the afternoon from him to confirm that the proceedings had gone as expected.
Three years later, I made my last payment on the plan and realized that I was debt free and had managed to pay all but a very small amount of what I had owed. As if life just had to throw me one last twist, my son called just a few weeks later to let me know he was planning to file for bankruptcy. My first instinct was that I’d set a bad example for my son, but I soon realized his circumstances were very different from mine.
My son had graduated the year before along with several friends who’d all moved into the city. He’d felt pressured to match the appearance of his friends’ level of success and had run up an unbelievable amount of credit card debt, unbelievable to me at least. One thing was clear; with only
an entry level position at his employer, my son would not be able to commit to the payment plan of a Chapter 13 bankruptcy as I had. He also didn’t stand to lose a home or much personal property by filing for personal bankruptcy.
For these reasons, and under the counsel of my attorney, my son filed for Chapter 7 bankruptcy. The process, while much the same as what I’d gone through, didn’t involve a payment plan. My son had to file a Statement of Intentions which detailed all the property he owned, pretty much just his car, which he intended to surrender to his creditors. He also had to file a statement that included a certificate from his attorney that the different chapters of bankruptcy had been explained to him. The same statement included an overview of his monthly income and expenses.
The last step for my son was the completion of a financial management course. Somehow, the day he received the confirmation that his debts had been discharged, I knew it was all finally behind me. Our family had ridden through four tough years and both my son and I faced many more years of past bankruptcy appearing on our credit report, but I knew we were on the real road to total recovery. These days, I like to call it bankruptcy remission.
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