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**Lowdown3** · 02-19-2012, 10:36 AM

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Waiting for the banks.
Still waiting for the foreclosures to take place. With the cash we were able to save by not making any payments (except the cabin) we put new tires on all the vehicles as well as a set of studded snow tires. All the little things that may have gone wrong were address and replaced.
We used this “quiet time” to buy and do things that were needed and may not have the money in the future. Snow gear for the family, shoes, clothes, new mattresses. Extra oil and filters for the cars, extra gas cans, extra gas, extra food, shelves to put the food on. Crowns on my teeth that had been put off. Chiropractor visits that I would have never done. A couple of family trips to Front Sight in Las Vegas to teach the family about guns.

Keep in mind that at this point all I have done is “learned” about bankruptcy and stopped paying on 20 homes. I figured we were about three months before the foreclosure of the first house. The phones were ringing with collection agencies. Then they would make offers. “We can remove your 10,000 debt if you pay us 7,000 right now.” It got to a point where they were offering 20 cents to the dollar.

Lessons Learned: Beware, if you take part in this, you are showing that you have a stock pile of cash and are playing debt games. This is OK if you do not plan to file for bankruptcy. But if you are planning to go bankrupt, stay away from making these deals.

Foreclosures finally
It took 11 months for the bank to foreclose on our McMansion. However, the rental houses have at least another four or five months.
We had several tenants move out and trash the houses again. Rather than fix them I just locked them up. Eventually the bank will drop by and see the house is abandoned and they will board up the house. If there are still renters in there, they will just keep posting notices.

Lessons Learned: Tenants think you are a millionaire, they wont understand the situation. The further you are removed from them the better. Don’t tell them anything. If you feel compassion for them, help them anonymously. Also, collect the rent until the last day. FYI: All leases are terminated when the home changes owners, at least in Washington state.

12/12/2009
The last foreclosure, finally our plate was clean. No more tenant calls, ad running, credit screening, evictions, clean up, police reports, health department violations, housing authority inspections. My rental house empire was gone.

Lawyer up again.
Now with all the homes gone, the cars in place, and all the consumables stocked and placed, we were ready to talk to another attorney. We went over everything from start to finish. I recall one thing that we went over just about every two weeks was a check list of stuff in my house. He always started with fur coats, which made me laugh every time. I told him if I had any I would wear it to our next meeting. Even though we went over the list a couple of times a month, he wanted to go over it again to be sure I was not changing my story. Again, he is placing himself on the line as well as you. So give him what he needs. Confidence and the truth about your situation. He is building a story of you in the document.

Lessons Learned: 401k’s are exempt from this. You get to keep what you have in there, so don’t dip into it until after you are complete. If you touch it, it can be taken. Wait till everything is over before you dip into this and then maybe wait another six months. Be sure to disclose all the detail about it to your attorney.

Our Day in Court
We had listed all the debt with all the contacts. All had been notified and we waited for them to come back with any questions or contested debts. Our court date was set and we drove that morning to the court in Yakima.

Our attorney took us aside. Said, “I didn’t tell you this because I didn’t want you to worry.” (Recall, they think all of us chapter 7s are idiots) “the judge will ask you questions, I have no idea what the questions will be, and you can refer to the document he is looking at. He wants a clear picture of your financial life. So be ready with your story. In two minutes, be able to tell him what happed to you, how you ended up here today.”
We went into the court room. There were about 25 people in the room, and only 3 men in suits. The way courts run, the judge will usually take the attorney with fewest clients first. Judges and Lawyers are the same type of guys. So they respect one another, they were very cordial and polite to one another. So, since my attorney had just us, we went first.

We were sworn in after recording our ID, asked us a few questions. He had me give my two minute speech. Asked if anyone owed me money. Asked if I was planning to get any big money ($1,000 or more) in the future. After saying no, he looked over the document again and then we were dismissed.
In the lobby, my attorney thanked us for the business, said hopefully we never have to talk again.

What now?
He said in a week or so we should get notification that we passed or failed. If we failed we start over. If we passed it was almost over. He warned us, not to do anything for six months. Don’t sell your cabin, don’t win the lottery don’t receive an inheritance, because the file will be on the auditors desk for up to six months, and they will review it. If they open it back up and find you are better off financially, they will rescind the discharge and have us start all over again.

Lawyer up again.
Now with all the homes gone, the cars in place, and all the consumables stocked and placed, we were ready to talk to another attorney. We went over everything from start to finish. I recall one thing that we went over just about every two weeks was a check list of stuff in my house. He always started with fur coats, which made me laugh every time. I told him if I had any I would wear it to our next meeting. Even though we went over the list a couple of times a month, he wanted to go over it again to be sure I was not changing my story. Again, he is placing himself on the line as well as you. So give him what he needs. Confidence and the truth about your situation. He is building a story of you in the document.

Lessons Learned: 401k’s are exempt from this. You get to keep what you have in there, so don’t dip into it until after you are complete. If you touch it, it can be taken. Wait till everything is over before you dip into this and then maybe wait another six months. Be sure to disclose all the detail about it to your attorney.

Our Day in Court
We had listed all the debt with all the contacts. All had been notified and we waited for them to come back with any questions or contested debts. Our court date was set and we drove that morning to the court in Yakima.

Our attorney took us aside. Said, “I didn’t tell you this because I didn’t want you to worry.” (Recall, they think all of us chapter 7s are idiots) “the judge will ask you questions, I have no idea what the questions will be, and you can refer to the document he is looking at. He wants a clear picture of your financial life. So be ready with your story. In two minutes, be able to tell him what happed to you, how you ended up here today.”
We went into the court room. There were about 25 people in the room, and only 3 men in suits. The way courts run, the judge will usually take the attorney with fewest clients first. Judges and Lawyers are the same type of guys. So they respect one another, they were very cordial and polite to one another. So, since my attorney had just us, we went first.

We were sworn in after recording our ID, asked us a few questions. He had me give my two minute speech. Asked if anyone owed me money. Asked if I was planning to get any big money ($1,000 or more) in the future. After saying no, he looked over the document again and then we were dismissed.
In the lobby, my attorney thanked us for the business, said hopefully we never have to talk again.

What now?
He said in a week or so we should get notification that we passed or failed. If we failed we start over. If we passed it was almost over. He warned us, not to do anything for six months. Don’t sell your cabin, don’t win the lottery don’t receive an inheritance, because the file will be on the auditors desk for up to six months, and they will review it. If they open it back up and find you are better off financially, they will rescind the discharge and have us start all over again.

Six Months later:
We put the cabin up for sale.
Three months after that we sold the cabin. Moved a mile closer to town off of the hill and are now renting a house. We were able to get a little cash out of the cabin, but not enough to change our lives.

We have since purchased a boat and an RV, all with cash we save up after the discharge. They are old and have problems, but they are paid off. (Yes, we are storing food and survival stuff as well.)

We live without credit cards. We save for things we need and use a calendar to mark what gets paid and when. We have checked out buying better cars, but just cant justify a payment.

Here are some details I have found that may be helpful.

After two years from bankruptcy you can buy a house via FHA.
After three years from foreclosure you can buy a house via FHA
In King County, Washington, the max loan amount via FHA is $525,000 (40 miles away)
In Kittitas County Washington, the max loan amount via FHA is 271,000 (where I am)
There are tests to verify if you can go Chapter 7. These are: 1.) More than 50% of the debt you have is due to a failed business (not consumer debt) -or 2.) The total amount you owe after liquidation is divided by 60 payments. If you cannot pay even just 20% of that monthly payment you will fail the means test an can go Chapter 7.
If your wife is out of work, have her hold off getting a job until this mess is done, its a good time to read up and gain some education.

You are not dishonest, you are in business, the business of doing what is best for your family.
I had to get my brain around this. I made an agreement to pay for this debt, and these houses. But must now do something else. Do I feel bad? Yes, but keep in mind this is just business.

Let's say you didn’t own the house, lets say you owned a business that employs 20 people. Your business builds picnic tables for the parks department. You have been doing this for five years. But one day, the budget for the parks department gets cut, and as a result they can’t buy anymore tables from you. As a result not only do you have to layoff your employees, you have close down the business. Feel bad? Yes. But it happens all the time. Could you have stopped this from happening? Sure, should not have built a business on the expectation of selling tables. But you did, and you ended up making some money and employing 20 people. Are you going to keep the shop and tools and machines and people there to do nothing? No. So everyone is canned, they go to the unemployment line. You hock the tools and equipment for what you can, you break the lease and give back the shop. Do you pay everyone the little cash you gleaned out of the business? No, because you are a business person.

Why is this any different?
When you buy the house, sign for the credit card, buy the car, you sign a contract. The contract says exactly what each party must do. The bank agrees to loan you the money and hold the house as collateral, you agree to pay the payments and use the house. If you do not pay, the agreement spells out that they take the house. That's it. Simple. No blame, no bad words, just action and reaction.

Lets talk about the credit cards.
Here, they loan you money to buy stuff. You agree to pay monthly and they give you more and more credit. If you stop paying, they will try to get you to pay and in the end they will try to garnish your wages. Keep in mind, they are not losing money. They may not get all that they want but you have already paid them many times over and over in the years you have had this credit. This is their risk, not yours. They charge high rates for money they loan you specifically because it is unsecured. They made the plan, not you.
One thing you should know. These credit card companies will try to get money from you for a little while. But eventually they give up on you. They take this debt you owe and sell in to another company very cheap. So if you owe $3,000 dollars, they will sell it to “ABC Recovery” for $200. That's how much they don’t care about you or your debt. They have already made their money and are just trying to glean as much as they can as fast and as easy as possible.

ABC Recovery then goes after you for the full $3,000 plus the $200 they paid for the contract. Eventually they may sell it to another collection company for $200 dollars. Eventually one of these companies will try to garnish your wages if they can find where you work. Which brings us back to the beginning of this deal. When you start getting calls from the creditors, they are not going to give you a “deal” they are not going to change your loan, or help you out. They are trying to get you to give them all the information they can get on you. This way, when they sell your loan to a recover/collection company, the more information, they have on you, the more they sell your debt for.
Also keep in mind, the collection companies are now using Facebook and Twitter to locate you and your income.

One last thing to think about:
When renting a car you get insurance for it. If the car gets damaged, you have insurance, that is why you paid for the insurance, it’s no longer your risk of damage it is now the insurance companies. What if you did not damage the car? are they going to give you back the cost of the insurance, no, that is the risk you agree to.
Same with credit cards and all loans. The risk on both sides are spelled out, don’t let anyone guilt you into not doing what you legally can do to provide for your family. I don’t see the banks apologizing for the massive bailouts they got, in fact they act as though it never happened.

Life moves on
I am doing very well at my job and am no longer fearful that I will get canned The kids are doing great and my wife loves not having to snowmobile every day up and down the big hills in the winter.
We still can’t get a credit card, we have tried a few times. And we have to educate the landlord when he was trying to screen our credit. Again, people don’t get it, that you can have a great job and still go bankrupt and foreclosure.
This was a long process, but at this point we can just play the hand of cards that we have. I hope this story helps encourage others that find themselves in the same sort of boat we were in.

God Bless and remember Luke 12:15: "Take heed, and beware of covetousness: for a man’s life consisteth not in the abundance of things which he possesseth." (Lowdown3 added- it's HILLARIOUS that this guy would bother to add this after his tale of covetousness and theft!!!!)

JWR Adds: Again, a pending bankruptcy should not be used as a excuse for excess. Never, ever borrow money with the knowledge that you have no intention of paying it back. That is simply theft. Thou shalt not steal.

**SCinPNW** · 02-19-2012, 10:59 AM

I saw this too, and I agree with you LD3. Unfortunately, it has become socially acceptable for people to file bankruptcy and have their debts wiped away while the businesses are left holding the empty bag having to accept a loss for someone else's stupidity. It is maddening to see what has happened and is happening to our country, the people and the culture. We just need to keep praying, maintain our faith, and raise our children to understand this type of thing is unacceptable.

SC

**protus** · 02-19-2012, 10:59 AM

since i can only sit for a few mins of a time...i only got a few paragraphs in...and all i heard was " boo hooo i lived 400 times above my means and now i have to answer for it..."

please tell me it gets better or the guy turns into a bum living in a box by the interstate.

**Matt In Oklahoma** · 02-19-2012, 11:43 AM

My used to be buddy has filed twice and has ran up platnum credit cards to the max just before doing it because he knew he was going under with just the house and car payments. It's one of the issues that caused us to part ways

Bankruptcy is the lead fix for everything now. I work in a job that requires us to pay our bills or we can lose our job. When i lost my house after my wife being unemployed for almost 2yrs the first thing my head boss told me to do was to file bankruptcy because that was more acceptable and easier for him to justify. I was stunned and had to explain that I had no other debt I had managed to pay off everything over the years and had no high end toys like boats, RVs, sea doos etc. At that point he was stunned. Even a lawyer told me to do it until he reviewed our stuff and said oh that wont help you will it. I'm like this is crazy I just wanna pay the debt off and cant do it everyone is telling me to jump ship like an italian cruse liner captain. Kept my job but still being punished, made my bed so I gotta lie in it, dang sure aint no elses fault
The house was my stupid decision to go above our one income to get it because of what it offered in our lifestyle. I made it, I messed up not someone else and no else should pay for it and we are still trying to do that. Wife went from managing to a janitor so it wasnt a matter of what type of job, just wanted a job. That is something i've seen alot of with folks being too good to work here or there.

This SB dudes still trying to get credit cards on here, why, cause he learned that he isnt responsible for his own debt, same with my former friend who now with 2 bankrupcies has 3 credit cards all maxed out at over $15K, one 5K from a cruise and has lost the new truck he bought within 6mths of buying it and his smart cell phone cause he didnt pay the bills, makes 26 an hr, lives with his grilfriend who pays for the place and the groceries. To say the least we didnt agree on what needed to happen with him and we parted company

**EX121** · 02-19-2012, 12:03 PM

I saw this earlier this morning and gave up reading, made me ill. The overall impression is not I learned a lesson & don't do this but see what I got away with, at least as far as I read. Ifeel that filing for bankruptcy has become normal not something to avoid. I do feel sorry for those folks who where taken advantage of with predatory loans and find themselves in extremis. But even with those folks the old adage if something seems to good of a deal, then there is something wrong applies.

**Patriotic Sheepdog** · 02-19-2012, 04:09 PM

I'm with others here, saw it and had to stop reading as it made me sick. I think sometimes JWR will put articles up just to make/show a point. I'm waiting for some reply articles in the next few days. I bet most will blast this guy.

**Klayton** · 02-19-2012, 05:59 PM

OK This was the first WTH: "I found a house for $70,000 in a Tacoma, Washington hill top area. I put $2,000 into the house, carpet, paint, flooring, bath fixtures, and a cheap fridge and oven." OK, $2,000, unless he bought clearance flooring and fixtures, fridge and oven from "scratch and ding" not sure how in the world he got it all for $2K.

Next in 1988 he was in a bad way for money, so he refinanced (2nd mortgage) his house and tried a hand at flipping houses? Who the hell goes further in debt and "tries" a new "all or nothing" financial plan? OMG

As for the bankruptcy, way too many people think the way he does, screw the companies, file bankruptcy and keep all my little stuff AND my house. I scream foul everytime I hear that. You cant afford your bills? FINE, forced sell off of ALL your property and welcome to section 8 affordable housing complex, go live with the other irresponsible people!!

**Patriotic Sheepdog** · 02-19-2012, 08:43 PM

Just saw this on Monday's edition of SurvivalBlog.

Five Letters Re: Living Through the Real Estate Crash and Bankruptcy

Here is the link to those five articles.

Page not found - SurvivalBlog.com

http://survivalblog.com/2012/02/five-letters-re-living-through-the-real-estate-crash-and-bankruptcy.html

**WiseOwl** · 02-19-2012, 08:58 PM

This dudes story describes how a majority live life everyday. Cant wait to see the rebuttals thrashing this fella.

I for one, am not cool with folks that do this. I have friends that live off of credit and loans. I tell em all the time and they just laugh but I am just a poor boy from the country that wears wal mart shoes, drives 10 year old vehicles and has NOT ONE CREDIT CARD!

The American Dream sure has changed...............

**Patriotic Sheepdog** · 02-19-2012, 09:34 PM

Originally posted by WiseOwl View Post

This dudes story describes how a majority live life everyday. Cant wait to see the rebuttals thrashing this fella.

I for one, am not cool with folks that do this. I have friends that live off of credit and loans. I tell em all the time and they just laugh but I am just a poor boy from the country that wears wal mart shoes, drives 10 year old vehicles and has NOT ONE CREDIT CARD!

The American Dream sure has changed...............

Wiseowl, the rebuttals are already on SurvivalBlog. I have the link in my last post. You were right, the five JWR posted trashed the guy.

**WiseOwl** · 02-19-2012, 09:36 PM

Yeah I just read them. And I know he got more than 9 emails responding to this guy.

Wow, just wow.

I am glad that he posted Brad's story, it was a great example of what most are doing and have been doing for years. This is what we are up against if something bad ever happens.

**1Admin** · 02-19-2012, 09:43 PM

These are the kind of people these "I'll organize my subdivision" pollyanna idiots are going to be trying to survive with.

And they will end up falling on a knife 18 times backwards for a can of vienna snasausages from people like this scumdog.

A better example would be- THIS IS THE TYPE OF DIRTBAG WE HAVE COMING IN AND SPAMMING THE SITE ;) Can't get much lower than that LOL

**WiseOwl** · 02-19-2012, 09:45 PM

Originally posted by 1Admin View Post

A better example would be- THIS IS THE TYPE OF DIRTBAG WE HAVE COMING IN AND SPAMMING THE SITE ;) Can't get much lower than that LOL

AHAHAHHAHAHAHAHHAHAHAHAHA

**brokedownbiker** · 02-20-2012, 07:53 PM

I just got a chance to get online for a few minutes and read the OP. I had to stop, it was making me ill. Unforuntaely, I can tell you from knowing some.... people like the letter writer, this is the new normal. There is ZERO thought given to the ethical issues involved with their behavior; if they can get away with something, they will, all in the name of keeping up their lifestyle.

I've begun to believe that they just do not care about their actions and their effects on others. They just don't care.

Yep, folks, these are your neighbors and co workers; and they ARE listening when you mention your preps and plans.

OPSEC.

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This is $%#$% HORRIBLE! 2 parts cause it's long

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