If you're thinking about Bankruptcy...

[Lear70]

I'm not an advocate of the Bankruptcy process but recognize that in some cases, it's a necessary evil to protect yourself and your family during hard times - post 9/11 was hard on many of us and continues to be difficult as more carriers lay off pilots and or close the doors. Faced with the decision to keep a roof over your family's head or file bankruptcy, many people have chosen to take care of their families - it's definitely a difficult moral choice.

That said, a friend of mine is going through the B.R. process and knew that I had filed 13 after I took a 50% pay cut leaving EOI to come to PCL then was laid off after 9/11 and he was told yesterday by his BR attorney that a new law was going into effect within the next 30-45 days that will SEVERELY LIMIT what an individual may file bankruptcy on and have wiped out.

Traditionally, Ch. 7 and 13 bankruptcy wipes out most unsecured creditors except for certain "priority" creditors such as Student Loans, IRS, etc. Congress signed a bill yesterday that expands the list of "priority creditors" to include certain asset-based debts (such as houses, cars, boats, and semi-secured debts like a Wells Fargo signature loan where you list household goods like computers and entertainment systems as partial-security).

The bill will go to the Senate where it is expected to pass relatively quickly and then to the White House where Bush is expected to sign is just as quickly, making it effective within 30-45 days. CNN and Fox News have been running stories on it and Bankruptcy attorneys are very upset about it, recognizing that there is going to be a "run" on bankruptcies until the bill is signed, then their business will decrease to a trickle.

The reason I post this here is that many regional pilots have gotten "stuck" in the right seat far longer than they planned and are having trouble meeting their debts, not to mention the possibility of many losing their jobs if US or UAL go Ch. 7. Many of us may have house payments that are LOWER than renting (my condo payment is only $485 a month but the unit across from me rents for $800) and forcing us to spend more money on rent would also force us to give up our cars too, and then STILL make payments on BOTH the lost house and car!!!

If you're seriously considering filing, TALK TO A BANKRUPTCY ATTORNEY NOW! To wait may make it impossible to retain your house or car that you've paid on for years and force you to still make payments on something you no longer own!

 

[kingaira90]

another option

Another option, if you don't want to do bankruptcy or miss the dead line. Consumer Credit Counseling Service at www.cccs.net. We went through a similar situation a couple of years ago, income dropped right after Christmas. Bills piled up with no way of being able to catch up. CCCS was able to negotiate lower rates on all of our cards. We had w/ late payments and fees, close to $1500 owed up front on $11,000 in debt, what would have been $500 a month normally. CCCS got that knocked down to $247 a month, and just a regular $247 payment up front.

You have to cancel all of the cards you are putting on the program, and you can only put unsecured debt on the program (ie credit cards etc). You pay them each month and they distribute the money to your creditors. IT IS NOT A CONSOLIDATION LOAN. They are a nonprofit company that just seems to want to help people out.

It does affect you credit while you are in the program, though not nearly to the extent that a bankruptcy does.


This is the one program that Clark Howard (www.clarkhoward.com), a really great consumer advocate radio talk show host, recommends.



It gave us the breathing room we needed to get things straightened out. If anyone has questions feel free to PM me. -kingaira90

 

[captain caveman]

I'm not an advocate of the Bankruptcy process but recognize that in some cases, it's a necessary evil to protect yourself and your family during hard times - post 9/11 was hard on many of us and continues to be difficult as more carriers lay off pilots and or close the doors. Faced with the decision to keep a roof over your family's head or file bankruptcy, many people have chosen to take care of their families - it's definitely a difficult moral choice.

That said, a friend of mine is going through the B.R. process and knew that I had filed 13 after I took a 50% pay cut leaving EOI to come to PCL then was laid off after 9/11 and he was told yesterday by his BR attorney that a new law was going into effect within the next 30-45 days that will SEVERELY LIMIT what an individual may file bankruptcy on and have wiped out.

Traditionally, Ch. 7 and 13 bankruptcy wipes out most unsecured creditors except for certain "priority" creditors such as Student Loans, IRS, etc. Congress signed a bill yesterday that expands the list of "priority creditors" to include certain asset-based debts (such as houses, cars, boats, and semi-secured debts like a Wells Fargo signature loan where you list household goods like computers and entertainment systems as partial-security).

The bill will go to the Senate where it is expected to pass relatively quickly and then to the White House where Bush is expected to sign is just as quickly, making it effective within 30-45 days. CNN and Fox News have been running stories on it and Bankruptcy attorneys are very upset about it, recognizing that there is going to be a "run" on bankruptcies until the bill is signed, then their business will decrease to a trickle.

The reason I post this here is that many regional pilots have gotten "stuck" in the right seat far longer than they planned and are having trouble meeting their debts, not to mention the possibility of many losing their jobs if US or UAL go Ch. 7. Many of us may have house payments that are LOWER than renting (my condo payment is only $485 a month but the unit across from me rents for $800) and forcing us to spend more money on rent would also force us to give up our cars too, and then STILL make payments on BOTH the lost house and car!!!

If you're seriously considering filing, TALK TO A BANKRUPTCY ATTORNEY NOW! To wait may make it impossible to retain your house or car that you've paid on for years and force you to still make payments on something you no longer own!

There will be stipulations to this new law. One important one is that this law may not apply to those who make less than the average state income. So there's a good chance that this law will not apply to regional F/Os. Be aware of what the consequences of a bankrupcy on your credit report will do for your future.

 

[rightrudder]

Another option, if you don't want to do bankruptcy or miss the dead line. Consumer Credit Counseling Service at www.cccs.net. We went through a similar situation a couple of years ago, income dropped right after Christmas. Bills piled up with no way of being able to catch up. CCCS was able to negotiate lower rates on all of our cards. We had w/ late payments and fees, close to $1500 owed up front on $11,000 in debt, what would have been $500 a month normally. CCCS got that knocked down to $247 a month, and just a regular $247 payment up front.

You have to cancel all of the cards you are putting on the program, and you can only put unsecured debt on the program (ie credit cards etc). You pay them each month and they distribute the money to your creditors. IT IS NOT A CONSOLIDATION LOAN. They are a nonprofit company that just seems to want to help people out.

It does affect you credit while you are in the program, though not nearly to the extent that a bankruptcy does.


This is the one program that Clark Howard (www.clarkhoward.com), a really great consumer advocate radio talk show host, recommends.



It gave us the breathing room we needed to get things straightened out. If anyone has questions feel free to PM me. -kingaira90

The only reason that creditors participate in this program is that it is better than getting nothing in return if the consumer files bankruptcy. Now that these creditors are going to get paid, no matter what, there will be less incentive for them to try to work with the consumer.

 

[DetoXJ]

Its about time they pass a law like this. Perhaps this will teach people to become more responsible consumers. MOST bankruptcy filings are the result of stupid money management practices and people not living within their means. Bankruptcy is just another form of welfare that allows people to walk away from financial obligations and it's about time they overhaul this abuse. Hopefully, they will overhaul the abuse in the welfare system next.

 

[neflier]

I'm all for this law. Boo freakin' hoo if some bankruptcy attorneys will see their business decline. These guys make money by ensuring that people who have debt are enable to walk away from their obligations. We all pay for it in terms of higher interest rates. As for the people who will not be able to file bankruptcy in the future, good. It's about time the American population starts to take responsibility for their actions. You should not be able to rack up $30K in credit card debt and then be able to walk away from it. If you can't afford it, then don't buy it. If your salary is too low, then get a second job or find a new line of work. I'm sick and tired of these personal bankruptcies that effectively result in their debt being passed on to you and me.

 

[Marquis de Saab]

" MOST bankruptcy filings are the result of stupid money management practices and people not living within their means."

The statistics I've seen show that MOST bk filings are the result of catastrophic medical debt. So, if your kid gets cancer and his hospital bill exceeds your health insurance cap (if you are lucky enough to have insurance), you can rest easy in the knowledge that poor, impoverished, victimized MBNA will still get their money. At 29% interest. That will help them pay that $1 billion lobby bill they ran up.

This federal bill also usurps your state bankruptcy laws. More big government from those tax-and-spend Republicans.

No one for a conservative to vote for anymore.

 

[ATRCA]

I do have some problems with this law and BK is the only option for some.

Nothin for nothin but yeah your right, "W" is the biggest spending president in US history according to the OMB.

 

[Peleton]

For the uneducated people out in the world who like this law read this article on the real reason people file for bankruptcy

http://content.healthaffairs.org/cgi/content/full/hlthaff.w5.63/DC1

 

[Lear70]

As for the people who will not be able to file bankruptcy in the future, good. It's about time the American population starts to take responsibility for their actions. You should not be able to rack up $30K in credit card debt and then be able to walk away from it. If you can't afford it, then don't buy it. If your salary is too low, then get a second job or find a new line of work. I'm sick and tired of these personal bankruptcies that effectively result in their debt being passed on to you and me.

That's one of the more assinine things I've read in a few weeks on here...

So let me ask you this: a 727 freighter Captain who has been working the U.S. Postal Service routes for a few years and considers his job fairly stable makes about $80k a year (4,600 a month after taxes) so he buys a $200,000 home - not exactly a mansion, just a 3 bedroom place to raise the kids far enough from the projects not to see crack whores on the corner. Year 2000 interest rates payment = $1,500 a month. Then he buys a $30,000 truck so he can get around - not a Porsche, just a Ford F150 truck: $400 a month. He still has student loans at about $200 a month, all total about $2,100 a month in debt - he's living on less than HALF of his income.

Then the contract is illegally single-sourced to FedEx - income GONE. Find a job at half the pay, about $2,300 a month. But he still has $2,100 a month in debt payments BEFORE he buys food for the wife and kids. Wife has a job that pays HER bills but not much more... Then September 11th happens and the guy gets furloughed and doesn't know when he gets to go back to work, so he finds a job on the side that only pays about $30k a year ($1,750 per month after taxes).

The above happened to me. NO CREDIT CARD DEBT, and I mean ZERO, ZILCH, so explain to me how irresponsible spending is a problem? Thank God for Chapter 13 BR that kept me from losing my house and my car and allowed me to drop the payments enough to survive, or should I just have let my family go without shelter, food, or clothing?

Guys like you always come out of the wood work on your high horse, but don't consider that not everyone fits into your neat little definition of "circumstance". Sometimes life deals you cards that you don't deserve; should you then get screwed even harder?

May you live to someday realize, FIRST HAND, what it's like to be on the receiving end of this equation.

 

[DetoXJ]

Hey Lear, you are the exception and not the norm. Bankruptcy is for people like you. I could question why you spent 200K + on a house and 30K + on a truck without having a year of emergency $$ saved up?? Those are big purchases when you have empty bank accounts. Had you planned better you could have avoided BK. I would suggest developing an emergency fund so you can afford to maintain bill payment in the event of a job loss, demotion ect. ect. Anyway, I know several people who filed for BK and they were simply just people living outside of their means and took the easy way out. Sadly, they are the majority of BK filings.

 

[DetoXJ]

....d

 

[fam62c]

What about corporations?

Where is the balance in this law? Corporations are allowed to file BK and get away with murder. Look at UAL and USAirways. Don't like union contracts, throw them out. Pensions obligations? Dump them on the Govt. and give guys 30 cents on the dollar. Airplane leases? throw them out. etc, etc etc. The shareholders that owned the company? F@$k them, you never have to pay them back a red cent. You come out clean with debts erased and good deals for everything that you crammed down the creditors throats by force. I guess the old saying is true: if you owe the bank $50,000 you have a problem, if you owe the bank 50 million the bank has a problem.

Now the little guy is screwed, he can't do what corporations can do. People will get stuck in bad circumstances and never be able to start over because they will spend their whole lives paying off debt. I don't advocate BK and it's true that some people get in trouble through irresponsible money management but what about the responsible people who just had a lot of bad luck? How would you like to look at life knowing that you will never accumulate anything because everything you will earn in the future gets handed over as soon as you make it? It will be interesting to see how many people end up committing suicide because of this law because they are backed into a corner and see no other option. This is just another law to make sure that corporations are protected at the expense of individuals.

 

[flighter]

DETOXJ, you are a moron! The U.S. has the lowest savings rate of any industrial country, Credit card companies send out some 29 billion mailings a year, credit is dangled before us and when we bite, we get pinched in the new BK law

 

[DetoXJ]

Flighter, your the moron for taking the bait these credit card companies are throwing at you. I have no debt, lots of savings, emergency fund, 401K maxed with 6 figures in it to borrow against, ect. ect. It's called living within your means. I highly recommend you try it!

 

[ShyFlyGuy]

Where is the balance in this law? Corporations are allowed to file BK and get away with murder. Look at UAL and USAirways.

Great frigging point, Fam. I can see both sides on this, and I doubt it would do any good to shout one way or the other, but if they're going to stick it to us, stick it to the Corporations too! Wouldn't that be the day that somethingg in politics were fair? Just dreaming.

Shy

 

[neflier]

That's one of the more assinine things I've read in a few weeks on here...

So let me ask you this: a 727 freighter Captain who has been working the U.S. Postal Service routes for a few years and considers his job fairly stable makes about $80k a year (4,600 a month after taxes) so he buys a $200,000 home - not exactly a mansion, just a 3 bedroom place to raise the kids far enough from the projects not to see crack whores on the corner. Year 2000 interest rates payment = $1,500 a month. Then he buys a $30,000 truck so he can get around - not a Porsche, just a Ford F150 truck: $400 a month. He still has student loans at about $200 a month, all total about $2,100 a month in debt - he's living on less than HALF of his income.

Then the contract is illegally single-sourced to FedEx - income GONE. Find a job at half the pay, about $2,300 a month. But he still has $2,100 a month in debt payments BEFORE he buys food for the wife and kids. Wife has a job that pays HER bills but not much more... Then September 11th happens and the guy gets furloughed and doesn't know when he gets to go back to work, so he finds a job on the side that only pays about $30k a year ($1,750 per month after taxes).

The above happened to me. NO CREDIT CARD DEBT, and I mean ZERO, ZILCH, so explain to me how irresponsible spending is a problem? Thank God for Chapter 13 BR that kept me from losing my house and my car and allowed me to drop the payments enough to survive, or should I just have let my family go without shelter, food, or clothing?

Guys like you always come out of the wood work on your high horse, but don't consider that not everyone fits into your neat little definition of "circumstance". Sometimes life deals you cards that you don't deserve; should you then get screwed even harder?

May you live to someday realize, FIRST HAND, what it's like to be on the receiving end of this equation.

Let me start by saying that I'm sorry for your experiences. It sounds like you were working for Express 1. I have many buddies who flew there.

Sooooo, you lost your job and had a shiny new $30K truck, costing $400/month? Why didn't you sell it immediately after losing your job and purchase something used and much more economical? You said that you had a job on the side making $30K. Why didn't you get second job to support your family? Do you think that you are above it? How does your wife's income factor into this? Where were you emergency fund and backup plans? How can you possibly work in aviation without one?

It's called living within your means and planning on the unexpected. The loss of a job should not spin you off into Ch 13. Instead of taking responsibility for yourself, getting a second job, selling the truck, etc, you decided to take the easy way out and stick me, and the rest of the population, with YOUR debt and piss poor decisions.

As far as being on the receiving end of this equation, I am currently furloughed from Indy. As a result of planning, emergency funds, etc, Ch 13 isn't even an option for me. I kept my skills up in another line of work and start next week at 2X my regional income. It burns me when guys are living paycheck to paycheck, lose their jobs and start screaming, "Poor me, I can't pay my bills. Let me have my neighbors cover my debt."

 

[flighter]

Neflier, how are your neighbors covering your debt if you go BK. Don't give me that crap about interest rate rising for everyone. Banks take it into account there will be loses and they have reserves to cover that. Consumers in the U.S. Have always lived beyond their means. Guess who drives the economy, the consumer that's who. How does that come about? with easy availability of credit that is. I wish consumers would truly live within their means, only one problem the freaking economy with come to a standstill. BTW, I have not ever declared BK. I use to be a manager at Citibank and saw first hand how easy credit was given out to kid's in college and I got the call on the day of rekoning when they went beyond their means with ne banks help.

 

[Lear70]

Let me start by saying that I'm sorry for your experiences. It sounds like you were working for Express 1. I have many buddies who flew there.

Yup... it sucked for a lot of us. I was one of the lucky ones that was able to stay in aviation, a lot of others weren't as fortunate.

Sooooo, you lost your job and had a shiny new $30K truck, costing $400/month? Why didn't you sell it immediately after losing your job and purchase something used and much more economical?

Have you ever purchased a new car? What happens after you drive it off the lot? That's riiiight, it depreciates several thousand dollars. If you tried to sell it six months later, you'd find that you couldn't get enough money to pay it off, it's called being "upside down" in your loan and happens until you've paid on a car for about 12 to 18 months in most cases.

You said that you had a job on the side making $30K. Why didn't you get second job to support your family? Do you think that you are above it? How does your wife's income factor into this? Where were you emergency fund and backup plans? How can you possibly work in aviation without one?

That job on the side was food service working double shifts as a sous chef doing 14-16 hour days; it was the best I could find, no time for 2nd job. Wife's income, as I already stated, was just enough to cover her own car payment, insurance, and child care plus $200 a month for food and gas - no college degree. I had just upgraded from F/O to Capt and had 6 months of emergency funds saved up, 4 months were used going through training at Pinnacle with no pay during training (3 months of training then another month working before we saw a paycheck), the other 2 were used when I was furloughed from Pinnacle.

It's called living within your means and planning on the unexpected. The loss of a job should not spin you off into Ch 13. Instead of taking responsibility for yourself, getting a second job, selling the truck, etc, you decided to take the easy way out and stick me, and the rest of the population, with YOUR debt and piss poor decisions.

YOU HAVE NO BUSINESS TELLING ME THAT. I believe I made VERY sound decisions all the way through. I COULD have filed Chapter 7 and owed NOT A SINGLE, SOLITARY DIME and started over again MUCH more quickly. Instead I filed a 13 which DOES pay back the debts, just at a much slower rate. In case you haven't heard, the only dischargable debt in a 13 is unsecured (credit cards, etc), which I didn't have any of. Educate yourself and we'll talk more.

As far as being on the receiving end of this equation, I am currently furloughed from Indy. As a result of planning, emergency funds, etc, Ch 13 isn't even an option for me. I kept my skills up in another line of work and start next week at 2X my regional income. It burns me when guys are living paycheck to paycheck, lose their jobs and start screaming, "Poor me, I can't pay my bills. Let me have my neighbors cover my debt."

You know what's most amusing about this? I received about 4 PM's from people furloughed from Indy thanking me for the information and warning me that the self-righteous pr*cks would be out in force soon enough. Boy, were they right.

Did I have a contingency fund? Yup. Did I have another skill set to use? Yup. Was it enough to replace an $80,000 a year job? Nope. Glad you have that skill set, not everyone can be quite as "fortunate" as you, even with good planning, so point that self-righteous finger somewhere else buddy.

 

[neflier]

Lear,

My main point is that if you have positioned yourself financially where the loss of a job results in filing bankruptcy, then you are doing something very, very wrong. Too many people overextend themselves and then look at bankruptcy as a way out. We ALL then have to collectively pick up the tab.



As far as being upside down on your truck payment, how about putting a large enough down payment to preclude that possibility? That's how I purchase vehicles. Again, money management 101.

I hope everything works out for you as you get your life back together.