How We Went Through a Bankruptcy and Lived to Tell about it

My husband and I bought an overly large home when the market was riding high. When we sold the house, we took a huge financial blow of of nearly $70K.

Of course the expense of moving totaled up to being way more than expected. As you might imagine, we pretty soon found ourselves in an ugly place money-wise free falling into debt on our revolving credit accounts. I got an extra waitressing gig at a local restaurant just to keep our heads above water and we cut costs wherever we could, but nothing seemed to fight our mounting debt and we ended up being forced to file chapter seven.

Now most people think that bankruptcy gets rid of your debts, but it's actually only those debts that are unsecured, so some of our vehicles and possessions were repo-ed or we had to liquidate them. I'm sure you can guess at the terrible stress we endured, but we knew we'd brought all this on ourselves by buying that house. We were forced to tell our youngest child who is off at college that we could no longer lend financial support outside of tuition. I never thought I'd have to say that to a child of mine.

My husband and I took full financial responsibility for everything, from the defaulted car loan to the misbought house, and within a handful of months we were back to , putting whatever we can aside in a savings account, and living well within our means. The good news is I work as a nurse and recently got a new position in management, the income of which is 25%. Problem is the new hospital is too far away for my husband to drive me there for each shift without him missing work and we only have one car.

I was struck with a new worry: car loan during bankruptcy?

If you've filed a chapter 7, what you have to do is make sure you've gone through what's called a 341 meeting of creditors. This website gave me a great deal of information about what to expect: Bankruptcy Car Loans. Usually this meeting is held 30 to 45 days after the date of your bankruptcy, as was mine. There was no judge. The trustee is just an appointed attorney, and your creditors are invited to come but often do not. I was nervous even though I knew I'd been universally transparent about my assets and such. I was also worried about the car lender showing up. They'd been unpleasant with me already, but neither they nor any of my other creditors showed up. I later learned that they usually only show up for the 341 meeting of a chapter 7 to dispute a discharge, so it's not such a big worry.

The lawyer/trustee asked a large number of questions, some of which included:

• How did you value the property that you listed on your petition?


• Have there been any significant changes since you filed?


• Does your bankruptcy petition accurately list all of your assets and all of your debts?


• Have you owned any property within the last 5 years? Please describe.


• Do you own an automobile? Do you owe any money on it? Is it insured?

The website I mentioned also uses advanced matching technology to match you to a bankruptcy car loan lender. In less than an hour I was speaking with a lender who was open to working with my bankruptcy situation. It took less time than a microwaved TV dinner.

Key action items for making the most of your bankruptcy car loan:

1. Buy a vehicle that's significantly less expensive than you think you can afford, as high interest rates post-bankruptcy can inflate your monthly payments


2. Always choose reliability and good mpg over style, status, or horsepower


3. Buy used because the average new car depreciates nearly 50% in the first 3 years


4. Apply online because modern web technologies can maximize your chances of finding an approving lender over traditional method of application

Ultimately, we were able to get a used Audi A4 (it looks kinda like the one in the picture but older) with a 4 cylinder engind that gets good gas mileage and is fun to drive. When I behind the driver's wheel every morning and back out of the driveway I can say I'm more proud of this little Audi compact than any big luxo-SUV because I know how much discipline and determination it represents. And we've finally gotten ourselves some breathing room when it comes to our monetary standing. To top it off, I'd forgotten the feeling of freedom you get from a car of your own, like that first taste you got when you took out your dad's care for a drive at 16.