Many people are concerned about how a bankruptcy will reflect on them and what impact it will have on their life and finances moving forward. Because of the stigma surrounding Bankruptcy, a legal process designed to provide US citizens with a means for financial recovery when needed, many people don’t talk about their financial hardships or their experience going through the Bankruptcy Process. We will be talking Dean in this segment and gaining the insight of an average Minnesotans experience Filing Bankruptcy with a MN Bankruptcy Lawyer and addressing their finances immediately following the discharge of their Bankruptcy. This is intended to shed some light on what can be expected and to debunk some of the common myths and misconceptions so let’s begin.
Dean's Experience With His MN Bankruptcy Lawyer
Q-Hello Dean, first of all tell us your age and how long ago you filed bankruptcy please.
A-Certainly, I am 55 but I was 53 when I was Filing Chapter 7 Bankruptcy, about 2 years ago now.
Q-And what would you say was the single biggest factor that contributed to your need to file bankruptcy for relief?
A-Well I suppose I would have to say myself, I didn’t keep track of my finances and they just got out of hand, I made good money but it all just got to be too much.
Q-Could you elaborate please, you just kind of mismanaged your finances?
A-Well My ex-wife always handled the finances and we did good and when we divorced I managed my own finances for a time which went well and then I began a new relationship and she took over the finances. When our relationship ended and I again took over my personal finances they were in complete ruin, overextended credit, and in default on the car and behind on my rental property. It was horrible but I did it to myself when I quit keeping track of all of those important things.
Q-Something like that really could happen to anyone though, I think a lot of us neglect to consider that changes in relationships can be the cause of financial hardships, did you immediately turn to bankruptcy for help or was this a process of exhausting other options?
A-It was definitely a process, a long one, I cashed out my 4O1K and sold off my tools to catch up the rent and the car and started to try and make arrangements with all the charge cards and bank lines of credit but it was too late to work things out with most of the creditors, they didn’t want to give me any time they just wanted to be paid.
One collection agency I made a payment to with a check by phone took my banking information and seized my entire paycheck when I deposited it in my bank account the following payday even though I had informed them prior I would be calling to make another payment to them from that very check they took and then they wouldn’t work with me at all anymore. I had to quit using my bank account and then they just kept sending garnishments to my employer. I already had child support coming out of my paychecks which I was happy to pay for my children’s needs but between the two I could keep the necessities current and they again began to fall into default in spite of what I considered a decent wage that I earned in my opinion.
Finally the credit counseling service I tried to work with flat out told me “your creditors don’t want to work with you or us, your best option is to File Bankruptcy” and it was hard. I wanted to pay the debts I allowed to accrue by neglecting the matter for so long but there was no way so I finally called an attorney.
Q-What was the first thing your MN Bankruptcy Lawyer did for you? Was it simple to begin the process?
A-Right away my MN Bankruptcy Attorney got me most of my wages returned to me. The money that was garnished from my bank account was returned to me and all my wage with holdings aside from my child support immediately stopped. I was able to make my car payments and rent again but that was really it. I had no credit; you don’t realize how important credit is till it’s gone. It was really easy to get the process started though; the Bankruptcy Lawyer was really nice and joked about how formal I looked for our meeting. I wanted to make a good impression but he was already a really down to earth guy with no judgments regarding my situation.
Q-You mentioned it “you don’t know how important credit is until it is gone” could you expand on this and talk about your experience?
A-Absolutely, credit is such a part of our day to day but we really gotta watch that stuff. I remember my car broke and I had it towed and repaired intending to pay for it with my credit card only to discover it was in default and deactivated. I then applied for the stores line of credit and was denied for outstanding charged off debts on my credit report. I had to borrow the money from a friend. I had this line of credit that was accepted at a number of medical service providers like dentists, imaging specialists and veterinarians and I took the kids to the dentist intending to use this line of credit as payment thinking I had an open line of credit only to learn that the credit was used for minor veterinary services and never paid on and had since gone into default and been canceled. You don’t think about these random expenses life throws your way but it’s important you try and plan for them and maintain your credit so that you have that support when it is essential.
Q-You said it’s been 2 years since you filed, do you have credit now? Can you comment on your current situation?
A-I got credit back right away the offers started coming right away, they weren’t very good offers but they started coming right away. Creditors know when your Filing Bankruptcy in Minnesota and they try to hook you right back in but I’ve got decent credit now, it’s getting better.
Q-I have heard that lenders will target filers with high rates and hidden fees because there are little alternatives for someone just coming out of a bankruptcy discharge, is this what you experienced?
A-Yes and no, I had credit cards being offered to me with really high fees but no monthly fees so I just got one little credit card and used it for groceries and paid it off every pay day and never got hit with the interest unless something else came up that month with my finances and then I just caught it back up the next payday or next month. When I got my tax refunds I paid it off and closed it. Not long after that I started getting offers from the same company offering better terms.
Q-And your car, any issues there? That’s a major concern for many people.
A-Right after I filed I couldn’t get any auto financing but I did find a dealership that finances their autos themselves, these can be really shady but the guy was cool and understood my situation. I got a really good deal on a nice little car that the dealership could turn off remotely if I didn’t make my payments. That was a pretty big motivator but I’m proud to say I just recently purchased a nice used pickup truck from a great dealership and they were able to approve me through their banks financing department. It’s an industry competitive rate in my opinion. I don’t really have the saving I need to start looking at obtaining more credit, you got to have a plan to pay for it if you use it and I’m not there yet but things are comfortable again.
Q-Any closing advice you would pass on to other considering filing bankruptcy?
A-Don’t be embarrassed and don’t wait! Don’t sell your stuff or let your banks and paychecks be taken away from you because there’s just no need. We all make mistakes and anyone’s finances can go belly up on them for many many reasons. You just need to get the help you need and things will get back on track, I’m back on track and watching my expenses much closer.
