Major Upheaval for Our Family - Sort of Long

[DaffodilDreams]

My husband's business is tied into the housing market. I don't know about the rest of the country, but here, the market is what they call "underwater". Building has stopped (except for the rare custom or commercial project), houses are being walked away from all over the place, business spaces are vacant, etc. Anyone tied into this industry is feeling the crunch. MANY of the builders in the area have filed bankruptcy. My husband is in landscape design (owns his own business), and he's brilliant at designing gorgeous gardens and hardscape elements, but his main clients are those bankrupt builders. He made the switch to custom residential a couple of years ago, and that has allowed us to hang on as long as it has but, even so, people are not spending money like they used to - and I don't blame them! But, anyway, our income has dropped by 80%. Business and personal finances are in shambles. We've stopped paying certain bills in order to just hang on to our just average (believe me, we don't have a McMansion that's so typical of this area - we have a smaller, older house that needs lots of work) home so we can provide some sense of security for our dd. Even that is getting harder and harder. My husband is thinking about talking to a bankruptcy attorney. My fear is that if we file, the court will mandate us putting dd in public school so that I'm free to pursue work as well. Has this ever happened to anyone else? Is it a valid fear, or am I just being paranoid? She does so well at home, and I strongly believe that with her SPD and other quirks, she would be labeled a trouble-maker. We were already told by the county school system not to pursue an IEP for her because she would be denied. Her cognitive skills far outweigh her SPD needs according to them. So they would rather allow her to be a mediocre student rather than learn to the best of her ability. We decided to home educate because that wasn't okay with us.

 

And, on another tangent, has anyone ever filed for bankruptcy and been able to rebuild a secure life after that? We're in our mid-30s and generally fairly responsible financially. Now we see we should have been living WELL below our means in case something like this were to hit. But then, if you look at how long our savings did last, we were on the right track. Things just haven't turned around in time, and industry contacts are predicting another 10 years of downturn for the housing market. We can't survive that at this rate.

 

Any words of wisdom, BTDT, particularly in regards to possibly being forced to public school our daughter?

 

Thanks for listening!

[iammommy]

Forcing your child back to public school will not even be an issue regarding bankruptcy. Not at all. They are only interested in your finances. Get a good bankruptcy attorney. It's too complicated to do yourself, and having an attorney expedites things. He/She usually knows the bankruptcy judges and examiners, and it's in your favor. I'm so sorry you're going through this, but you will be OK! The economy WILL turn around. For now, don't stress about dd and school, you have too many other issues of stress. They will not even be interested in dd.

 

Nan

[fmont6bu]

I don't know about the bankruptcy thing but I know that my husband and I have felt the crunch of the current economy as well. I hs my dd but that hasn't prevented me from bringing in income. I tutor, teach co-op classes, and clean people's homes. All of these things I do with either bringing dd along, after dh is home or with a friend (paid) watching her. I think you have to think out of the box for you to generate income. If you are doing these things, I don't think anyone can argue with you. I also doubt the court could mandate you go to work full-time or how you school your child (but I might be naive). I also highly recommend Dave Ramsey's Financial Peace/Total Money Makeover. He has helped us with get out of debt and their organization might recommend a financial counselor.

[Dobela]

We filed for bankruptcy after I began homeschooling. Other than an attorney asking what my income was, nothing was ever said again. As far as I know, the attorney doesn't even know we homeschool. The main things looked at are current income, current debt, and assets. We do know of some people who were required to sell some items (like that secondary home or major art work), but not us. We did have to disclose if anyone else owed us money from either business or personal matters (such as a loan or payments from an accident, etc).

[i.love.lucy]

I agree! I have a friend that just recently filed successfully and they kept their house but it wiped out all other debt. They are still hanging on to their house by a thread but wanted it exempt from the filing. Her working was never, ever an issue. In our state they do require you to go through counseling, which is just an exercise in futility because their goals and yours are usually not so compatible. I think she even did it as an online thing. She mentioned they discuss options for finding more money in your budget, and extra jobs, but as far as the atty for the filing was concerned it was never ever brought up that they homeschool at all. Never mentioned that she should get a job.

 

 

:grouphug: There are so many of us in a very similar boat!

[Dobela]

Forcing your child back to public school will not even be an issue regarding bankruptcy. Not at all. They are only interested in your finances. Get a good bankruptcy attorney. It's too complicated to do yourself, and having an attorney expedites things. He/She usually knows the bankruptcy judges and examiners, and it's in your favor. I'm so sorry you're going through this, but you will be OK! The economy WILL turn around. For now, don't stress about dd and school, you have too many other issues of stress. They will not even be interested in dd.

 

Nan

I agree about finding a good attorney, even if you pay more up front. We had to pay around $2000 up front to do the bankruptcy. We had the same attorney all the way thru the process, and met with her several times. If we had any questions or problems (like with creditors still calling us after we told them to call her), she was available. The day we went to court, it was like a cattle call with several people in the same room having their information heard at the same time. They would call our names one by one for a taped testimony. Anyway, we all had to arrive 1/2 hour before the hearing. One attorney showed up with 2 large crates and began calling out names of people to come get their file. Come to find out he was just one of the attorneys from a large firm that specializes in bankruptcy. He had never met any of those people before then, and he was only there because it was his assigned day in court. If they had been in court the day later, they would have had a different attorney. I spoke with the person next to me and she said that she rarely spoke to the same person twice, met with 3 different attorneys in office, and sometimes felt like she wasn't really important or getting much attention. She had paid as much as we did for the bankruptcy. Believe me, I felt much more secure knowing our attiorney could represent us well because she knew us.

[Liz CA]

:grouphug: You are certainly not alone, as little as that may help. The failing economy has impacted most people in some way. I don't think you need to worry about schooling. Just like others have said, I cannot imagine anyone is even going to ask you about what type of schooling. The only question - if any - may be if your children are in private school and if there is a tuition payment. A simple "No" would probably satisfy them.

 

I am sure you can rebuild your life. I have known many people who have. Since this situation is not rare in these times, it will not impact you forever. Can you imagine how many people's credit ratings have suffered? My guess is that any kind of lender will disregard this rather quickly once someone can prove that they are back on track when either the economy has improved or they have pulled themselves up by whatever means.

This is just a bump in the road.

Edited April 30, 2010 by Liz CA

[RoughCollie]

The bankruptcy courts, trustees, etc., do not concern themselves with a debtor's educational arrangements for their children. An exception would be if you are paying for a private school and list it as one of your expenses, it could be disallowed in determining whether you can pay your bills.

 

Here is a great place to go for information: http://www.bkforum.com/forums.php

 

Also, you can consult an attorney (the initial consultation is free), for answers to some of your questions.

 

Here's a link to the U.S. Bankruptcy Court. Click on the "information" button.

http://www.cacb.uscourts.gov/

 

A straightforward chapter 7 or chapter 13 bankruptcy is not complicated. It is fairly easy to learn the ins and outs. There are a lot of forms to fill out.

 

You should know the rules so you can prepare for filing for bankruptcy beforehand, and so you can choose the most expedient time for your family. Some of those rules have to do with spending (using credit cards w/in a certain time frame), paying debt that can be looked at as preferential payments (the trustee can get the money back from the payee), and transfers of assets to someone else. Some of the rules have to do with assets that are exempt from the bankruptcy estate.

 

There is a lot of information on the Bankruptcy Forum (linked above) about preparing to file for bankruptcy and about what to expect along the way.

 

Bankruptcy is a business decision, not an emotional or moral one. There are so many outside forces that can impact a families finances and which are outside one's control, regardless of whether they had implemented a responsible financial plan from the start. It is there to give people a fresh start. In fact, Dave Ramsey declared bankruptcy once upon a time.

 

Also, one can live well below their means and sock away money for the worst situation, and still be hit with financial blows. My mother lost nearly all of her retirement savings in this Great Recession, and living very frugally all of her life did not protect her from that. Our income is 1/3 of what it was a couple of years ago, and DH filed for bankruptcy and we lost our house to foreclosure. We did not do anything wrong, but we got hit with the ugly stick anyway. It literally can happen to almost everyone.

Edited April 30, 2010 by RoughCollie

[DaffodilDreams]

A huge thank you to each and every one of you. Your shared experiences, advice, links to resources, and uplifting words have been a tremendous mood-booster. I feel I can at least rest easy knowing that we will maintain control over our educational choices. In the midst of feeling so OUT of control in other areas, this one thing means a lot to me. I feel like I can breathe again, so thank you, thank you, thank you!

[Renee in NC]

We have not filed for bankruptcy, but would have (and still would) if it became necessary. We are "judgement proof" in the sense that our income is too low and we have no assets. (We were also in a construction-related business, but hadn't been in business very long.)

 

We did, however, go talk to a bankruptcy attorney. He was able to answer my questions and give me the peace of mind to know that it wasn't the end of the world.

 

We are in our 30s as well and I think that is better. We have time on our side. We can recover from this and make a better life. You can, too. If it is any consolation, my father (a building inspector) says that things are starting to pick up a little where he is, after a long time like you describe.

[JudoMom]

I sent you a PM :001_smile:.