Bankruptcy

Back from New York, that’s another post though. I noticed a bit of an alarming trend. One person I know filed for bankruptcy, another is in the process of filing.

Situation 1: Guy now in his 40s lived a life beyond his means for years, buying furniture, going on vacations to tropical places, leased 3 cars, was upside down in one of the car he owned at one point by close to $10k. He was engaged for a while then things went south. He incurred some ~$6k legal fees because his ex-fiancee made some false statements about him, requiring legal counsel. Out of nowhere he dropped a bomb on me that he has $25k in credit card debt and plans to file before he moves to California. He never really asked for my advice about money, instead doing his own thing, was spending money on a pack a day of cigarettes. I don’t think he has a retirement account either, seems to have a bleak viewpoint on the future.

Situation 2: Guy never met a debt he didn’t like. Used to brag about putting everything on his credit cards to earn points. Leased a Hyundai Genesis for $900/mo, was negligent with his previous car, got in multiple accidents, ended up cracking the transmission. He left Texas to move to a place where the rent for a 1br is almost 3x what it was in the Dallas area. Goes to restaurants and orders expensive bottles of wine. Bought a digital camera that was over $3k in the middle of this. Went on cruises, got unlimited drink packages, best seats on the ship. Paid for an expensive trip to Alaska. 10s of $1000s in medical debt over the years. Credit was in poor shape. Had to borrow money from friends to be able to pay his rent each month. Unwilling to take any of my financial advice to heart. I don’t know all the details but do know it was a Chapter 13. The way he phrased it to me, he still owes the money but just isn’t paying interest. He sorta looked down on my for depriving myself of certain things in order to accelerate the debt payoff efforts.

It’s not my place to judge others but still think it could’ve been handled differently. Their debt / life, not mine…

Onto a current snapshot since it’s been a while….
401k – $35,557 – the market has been very volatile the past few months.
Roth IRA – $148
Total Retirement: $35,705
Emergency  Fund: $1,000 – it did take me over a year to even put that money aside.life..

Credit Cards = Still $0.00
NMAC 1.9% Auto Loan: $17,695 – 2 1/2 months ago it was $20,605. Still shooting for double payments each month ($1082/mo).

My car will be needing new tires in the next 3 months or so. I probably could push it until the Fall, but the current Continental ProContact TX set is getting noisy. On a rainy day coming around a corner, they definitely lost their grip. Getting close to 30k miles, which is hard to believe.

My lease is coming up for renewal, the amount is $844/month, $26 more per month than what I currently pay. Some folks would do anything to have rent that cheap. I would like to upgrade to a nicer place, maybe buy a house at some point. However… $500/mo of additional rent is not appealing to me at all. Why rent for $1300/mo unless it’s a really fancy house. Most of these places are 1br or studio apartments.

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