Petition Filed

Our bankruptcy petition was filed approximately one week ago. Just in time to prevent a wage garnishment order and to hold off an attorney representing the company that towed away my car almost five months ago, looking to collect the balance of the loan after auctioning off the crunched up hunk of junk.

In fact, we've already received the date for the meeting of debtors, which is where we (meaning us and our attorney) have to present our cause for bankruptcy and justify why we should keep what personal belongings we have while at the same time being relieved of our debt. Just under a month away, it's the first ray of light at the end of the tunnel.

Garnishment

My wife had received a summons for a garnishment hearing that took place today. Interestingly enough, my wife has no income of her own, as she's home with the kids while I work. I didn't receive a summons, but the income that they wanted to garnish in her name was my income. I'm sure that's completely legal.

Anyway, our attorney went to the hearing for us and go the opposing attorney to agree to wait a week before filing the garnishment paperwork. This will allow him the time to file our bankruptcy petition this week, which will put a stop to the garnishment process. What makes this most worth mentioning is that the fees we paid to our attorney for the bankruptcy do not include such court appearances, but he took care of it for us anyway.

But That's Not All

But of course, there's more. Recently, we were called by a very rude creditor. When I told him that he would need to speak with our lawyer and gave him the necessary contact information, he rudely demanded to know why we had a lawyer. I ended up hanging up on him.

He called again today. The conversation went something like this:

COLLECTOR: May I speak with ...

ME: I'm sorry, she's not available right now.

COLLECTOR: Who am I speaking with?

ME: Why don't you tell me who I'm speaking with first.

He identified his name and company.

ME: I told you the last time you called that you would need to contact our attorney from now on. You have no reason to call here again.

COLLECTOR: Why your attorney?

ME: Is this a financial matter?

COLLECTOR: Yes. Do you have a bankruptcy?

ME: You'll need to contact our attorney from this point forward. His name is ... and you can reach him at ...

COLLECTOR: That isn't the same number you gave me before.

ME: That's his local number. I may have given you his 800 number before. Here's his local number again ...

COLLECTOR: Why do I need to contact your attorney?

ME: You can contact him from now on. Please do not call here again.

Then I hung up. I have dealt with several debt collectors during this process, and most of them have been both reasonable and professional. Very few have been rude like this "gentleman." It is impossible to accurately portray his rudeness with the written word.

Petition Progress

We finally signed our bankruptcy petition this morning. We met with our attorney, who had everything drawn up and waiting (of course). He walked us through what each page of the large packet was for, indicated where we were to sign on each page (and I literally mean we had to sign on each page), and asked us a few questions for clarification.

He changed some of the amounts we listed for expenses such as food, clothing, and normal day-to-day cost of living things, based on what his experience tells him is typical for a family of our size. In most cases, his changes increased our expenses.

The petition will be filed in a couple of days, and we'll be in court for our discharge hearing in 30 to 45 days. My wife has a garnishment hearing she was summoned for on May 7, and that will now be stayed due to our pending bankruptcy. It's all a great relief, but I can only imagine how the relief will come when our debts have finally been relieved.

Pre-Filing Counseling

One of the most senseless changes made to the bankruptcy law in 2005 was the requirement to go through pre-filing budget counseling. There are several ways to do it -- in person, by phone, or online. The cost ranges from $40 to $150, from what I can tell, depending on what "non-profit" group you choose to do the counseling.

We chose Springboard, and spent $55 and about 90 minutes going through a counseling that accomplished nothing more than convincing us that bankruptcy was indeed the right choice for us. I mean, look at this spending plan! If we're nearly $60,000.00 in the hole, we don't have much choice but to file bankruptcy.

The counseling describes the most common types of credit counseling available, so that you'll know what other options you have besides bankruptcy. Then it explains the most common types of bankruptcy (Chapter 7 and Chapter 13) to help you decide what you might do if you file for bankruptcy. There's a quiz at the end of each section, and a couple of the questions are worded so that if you actually answer them the way they sound like they should be answered, you'll be wrong.

Then there's the budget plan. WOW! You have to enter all of your income (the easy part), all of your living expenses, and all of your debts. It seems like we just did all of this for our attorney. It categorizes all of your debt in such a way that, for us anyway, we had to refigure things three or four times to get it where they want it.

All of this, at the cost of $55 (which, it seems, is a bargain), for a ridiculous little certificate that my attorney has to file with our bankruptcy petition. And we had to have separate certificates for my wife and myself.

Well, it's done, and we'll sign the paperwork next Thursday. I just can't wait to have the whole sordid affair behind us.

Bankruptcy Counseling

When Congress passed the new Bankruptcy laws in 2005, their goal was to eliminate bankruptcy abuse -- to keep people who could easily pay their bills from filing for bankruptcy over and over and over. I don't know if they achieved that goal, but they sure did make it difficult for people who truly need the relief that bankruptcy provides.

The next step in our process is Bankruptcy Counseling. My wife and I must each complete a pre-filing course that will help us with a budget, show us other alternatives to bankruptcy, etc. There are several "approved" credit counseling companies that can administer this training and issue the required certificate upon completion. Their fees range from $20 per person to $125 per couple. Some allow couples to take the course together while others require them to do so separately (and charging each as an individual). Depending on the company, the course can last from 45 minutes to two hours.

Then again before the bankruptcy can be discharged and relief ordered, a Financial Management Course is required. I haven't even looked at all of the details for it, but it again requires registration fees.

With the fees involved, it looks like we'll be starting our first course on payday next week. It's time to get this thing moving. We received a summons today for a garnishment hearing in the case that was recently judged against us. I'd really like to get this thing moving before that court date comes up.

Filing Soon

We completed our bankruptcy packet today. That's the long, long, long list our lawyer gave us where we have to declare all of our assets and debts. Literally all, down to the shirts on our backs. It's not an enjoyable process, but it has to be done before our lawyer can file the bankruptcy.

Another thing that has to be done is a phone call to some kind of pre-bankruptcy counselor. I don't know much about it at all -- it's apparantly part of the new bankruptcy law. I'll post more details when I have them.