Catch 22

[David Freed]

I am 48 years old. I have always paid my bills, doing whatever it took to get the money to do it. Three months ago I hit a brick wall financially. I had borrowed a lot of money to get my wood business started. Over the past year, my income has been getting smaller every month and we are now getting 50 to 75 calls a day from creditors that we don't have money to pay. It has been hard having to deal with this, knowing that if I hadn't started my wood business, we would be debt free, and could have made it through this.
Last week my wife and I went to see a lawyer, and he said it would cost close to $2000 to file bankruptcy, and you have to have pay that before you can file. If I had money laying around, or some way to get some, I would be paying my bills, not talking to a lawyer >:(.

[WildDog]

Hi David

Not a good situation to be in, focus on the positives you have your wife and there are 2 of you to share the load and give each other strength, I see on your website your not taking any orders and 48yrs is still an employable age so hopefully between the both of you there is the opportunity for outside income, prioritise the debts and try to arrange part payments to keep the wolves at bay, don't lose touch with your friends you never know where support can come from......Try anything to avoid bankruptsy.

Just my opinions David and not meant as advice.

Rob

[blaze83]

Hi David,

I feel for you, I have been thru what you are experiencing.  Hang on and try to keep focused.. If you are a man of faith pray, get your friends to pray. I was to the point of not knowing what to do. I needed 1500$ to file my bankruptcy, long story short  after considerable pray and crying out to the Lord for mercy a man called me that i had did work for and was supposed to work for again but he hired some one else. He new a little of my situation and felt to help me so he wrote me a check for 1500$, pretty much a casual aquantance..was the money i needed to file and get the stress level down. I'm not proud of the fact that I had to file....was mostly due to poor decisions on my part and some business partners that i trusted unwisely. be encouraged, and keep fighting. I will add you to my prayer list...I understand the stress and other emotions. I went through mine alone, so be thankful of the support of your wife.

bless you,

Steve

[David Freed]

I have been borrowing money from everyplace I can for the last few months to keep paying my bills, hoping things would turn around. We owe more on our house than it is probably worth, owe $7000 on a $4000 semi truck (it was worth $7000 before the truck market tanked), borrowed everything I can on my life insurance, etc. To cover all the bills for the household and both businesses we need about $4500 per month, and are only bringing in about $2500. Our vehicles are 15 to 30 years old, with 200-270 k miles. I am trying to sell some of the equipment for what I owe on it, but it will probably be repossesed before I can. I have never been in the position of not paying my bills before, but I don't see any choice other than bankruptcy, and now I found out I can't even do that unless some money magically shows up. The lawyer said that even with the new bankruptcy laws that force most people to file chapter 13, you could be in better financial shape than we are and still be able to file chapter 7.

[flip]

David, sorry to hear of your troubles.  How are others faring in your area (cabinet shops)??

[ellmoe]

   A late relative was in the oil business in West Texas. He was a millionaire three times, broke four. The last time the oil downturn caught him, he should have filed for bankrupcy, but didn't. By filing he would have been able to reorganize and had the capital to maintain his wells. He would have caught the rise in oil prices and been wealthy again. As it was the banks would not let him keep enough money to get "ahead of the curve", so equipment was always broken and he never could get production up. He passed away still struggling. He was an honest, hard working man and deserved better. My point is that bankrupcy is there for a reason. Consider taking it before your financial problems bury you or your marriage. When you get healthy again you can always repay your creditors as a man should. Good luck. During these times there will be a line at the courthouse, I'm sure. Safety in numbers! ;D

Mark

[isawlogs]

Well I think one should take a look at all possible options before filling for bankrupcy , I have been in the receiving end twice from those that drop all responsability and not one came to see me prior to filling or after .
It is easy to file , it is as easy to meet with the creditors one at a time a sit and work it out . I am sure that they would rather wait some then get nothing or close to nothing .
  My advise would be to call them and set up a few meetings and see where you can ride . If there is no way of getting an understanding of positions ...  Wich I doubt then find 2000$ ...  But at least try to work things out before and call the ones that where kind enough to either loan or wait for payment .

[tcsmpsi]

David, I do not know your particular situation in detail.  However, generally, it is a similar situation hitting large and small business worldwide.  Circuit City just pulled the plug, after bankruptcy filing.  Bankruptcy is not the 'solve all' for all that it might seem  to be.   In fact, for most businesses who have utilized bankruptcy, it has been a temporary 'fix'.   The newer bankruptcy regulations make it even more difficult to 'restructure'.

I have a pretty good notion where you're at, judging by what you've stated.  Whether the creditors calling you have let on to you, or not, all lending companies KNOW there is a major, unprecedented crisis.   They will work with you, if you have anything at all to work with.  

They KNOW their ultimate alternative.  If it is secured property, they don't want to take posession of it.  What are they going to do with it?  They know the lack of probability of turning it for reasonable compensation.

I know a couple folks in your situation that are working viable, acceptable terms with themselves and all parties involved.  

 Ultimately, it is a matter of doing the very best you can with what you have to do with.  Realistically.

[snowman]

"Neither a borrower nor a lender be". One reason our economy is in this mess is because people were literaly betting the farm. Borrowings like gambeling, dont bet more than you can afford to lose. Heres another one, "If you can't do the time, dont do the crime". In this case the crime is putting youself deep into hock. I may sound like a hardass but you did this to yourself, suck it up.

[WH_Conley]

I feel your pain. I have been there before. Wish I could give some expert advice. Blind luck and bullheadness maybe is all that got me by. Not much help, just letting you know that you are not the only one that has ever been in bad financial shape but survived.

[tcsmpsi]

"Neither a borrower nor a lender be". One reason our economy is in this mess is because people were literaly betting the farm. Borrowings like gambeling, dont bet more than you can afford to lose. Heres another one, "If you can't do the time, dont do the crime". In this case the crime is putting youself deep into hock. I may sound like a hardass but you did this to yourself, suck it up.

What the sam hill does that mean, "suck it up"?  What do you think he should do?  Pull turnips out of the air?  No matter all that speculative mumbo jumbo, reality is reality.

What should he do by, "suck it up"?   No one can forsee the future.  Speculations are how business grows.  Some do, some don't.

I'm certain he went in with a reasonable belief he could 'afford' what he went into. 

[snowman]

"Suck it up" means don't whine. I was raised that the world owes you nothing, you make decisions you live with results of those decisions. Dave rolled the dice, if things went well he'd prosper, if they went bad hed lose it all.Things went bad, suck it up.

[tcsmpsi]

I didn't see any "whining".  I saw a man, a fellow human being, up against the wall with a seemingly insurmountable problem, looking for a viable solution.

In effect, 'sucking it up' in a most realistic and honorable manner.

[Jeff]

I agree tcsmpsi.

Snowman, while some people like David show integrity in the face of adversity, others simply show ignorance and insensitivity when given a key board.

[timber tramp]

  David- In business, as in most cases, communication is the key. Have you tried contacting the A/R departments of the outfits you owe money to? You might find that they're more willing to work with you than you think. After all recieving anything is better than recieving nothing.  TT

[Fla._Deadheader]

First thing I would do is, Contact those that you owe, and have them "Call off the dogs", those scum suckers that hound you, and make your life miserable. Their business may be booming from the ones that are sweating and trying to pay SOMETHING.  >:(

  Offer to meet with the ones you owe, AFTER they call off the hounders. Make an honest effort and you might/should make headway.

  Wadda I know  : ??? ??? ;D

  Gotta agree with tcsmpsi. No need to stomp on a man when he is asking for ADVICE, EH ???

[underdog]

First thing I would do is, Contact those that you owe, and have them "Call off the dogs", those scum suckers that hound you, and make your life miserable. Their business may be booming from the ones that are sweating and trying to pay SOMETHING.  >:(

  Offer to meet with the ones you owe, AFTER they call off the hounders. Make an honest effort and you might/should make headway.

  Wadda I know  : ??? ??? ;D

  Gotta agree with tcsmpsi. No need to stomp on a man when he is asking for ADVICE, EH ???

Many good replies here.

Be very carefull with your next steps as this sort of thing can eat assets you did not realize where at stake.
Friends - Family - Marriages - Etc.

This reply is exactly what i have been reading.
Do not try to hide or pretend things are not as they are.
Get in touch with your creditors and work out a deal.
Get a handle on the problem then move forward............... Good luck and my your God walk with you.

 

[snowman]

I agree tcsmpsi.

Snowman, while some people like David show integrity in the face of adversity, others simply show ignorance and insensitivity when given a key board.

Insensitivity Ill cop too, like I said, I'm kind of a hardass. :D Ignorance though? Ignorance is not being aware of the fact that if you borrow money to finance a business you may lose it. 70% of small businesses fail within 1st year. I lost it all once and know how it feels. A falling accident left me on crurtches for 6 months and walking with a cane another 3 months, All I had was workmens comp. Lost my new pickup,snowmobile etc. I knew the risk of falling timber for a living and didn't whine about my plight. I sucked it up. Also I made no personel attacks on David, didn't call him a whinner,just said don't whine. My advice may seem harsh but it's in reality meant constructively.

[Tom]

Well, your constructiveness is insensitive and non-constructive in the end.  Your attitude is the same as the man who shouts "jump" to the depressed woman on the ledge of the building.

You would have been better not saying anything at all than make comments like "suck it up".  Your bravado is not impressive and I find an attitude like you exhibit atrocious.

If you see yourself as being constructive, you aren't the type of person I wish to associate myself with.

You want to hear a course opinion, you got one.

This isn't meant as an opening for anyone to start a flaming war, so let's get back to showing Mr. Freed that we are capable of empathy and sympathy and possibly something good will come of it.

[David Freed]

David, sorry to hear of your troubles.  How are others faring in your area (cabinet shops)??

I was making cabinet parts for local shops until about a year and a half ago. I went from busy to almost a dead stop in about a months time. That is why tried to switch to flooring, but I only got three orders. There is one cabinet shop that I hear from occasionally, and he has been staying busy, but most have really slowed down.



I used to have really good credit. Because of that we were able to get several credit cards at a very low interest rate, and I used them to help get the business running. We now owe $70,000 to credit cards. Before we started missing payments over $50,000 was locked in at under 5%, with a fair amount of it locked in at 3%. I have had people try to tell me that was just a teaser rate, but as far as I am concerned you have to be pretty dumb to fall for that. When I say locked in,
it was locked until the entire amount was paid no matter how much other rates changed (unless you miss a payment).

My wife or I have talked to everyone involved. We even had a third party that deals with these situations try to negotiate for us, but our income has dropped so much that we have nothing to negotiate with. Our local bank where the truck and house are financed has rearranged our loans so that our payments are a third of what they were. The company where I have some of the equipment financed is also being very patient, but there is no money to give them.

My wife has always done a good job handling our money and paying our bills. She had to take care of things when I would be gone for weeks at a time in the truck. We have been through rough times before. She has always bought our food at cut-rate grocery stores buying whatever is cheapest. She only buys clothes when something is worn out, and then buys things on sale. I just got us into too much of a mess for anyone to get us out as far as I can see so far.

I guess the whole point of my original post was to see if there was any other ideas or possibillities that I didn't know about. I have failed at lots of things before, but nothing near as big as this. This is just another adventure where I have to learn everything I can and then jump in. 24 years ago, I sat down with a drafting book and made my own blueprints for a house. The bank gave me the money to build it, so I sat down with a book on construction and built my house. I am heating 2500 sq ft with a 40,000 btu gas furnace (even in the subzero weather we just had) so I must have done something right. That is how I have done most of the things I have done up till now. Now that we have the internet, I can find information much faster than I used to. I am going into this not knowing how to not pay your bills. I have already made mistakes (Is paying your bills instead of saving money back for bankruptcy a mistake?) and now I just want to know everything I can to try to make this a controlled crash.

I agree with snowman about borrowing to a point. We don't borrow money for pleasure items, but on the other hand I have said for a long time that it takes money to make money. I borrowed a lot to try to start a new business. I just picked a lowsy time to do it. I still believe borrowing money to invest in a business is a good thing to do. If farmers were afraid to borrow money to plant their crops, we would all be pretty skinny right now. Even while this mess is going on, I am still trying to figure out how to get back in business someday. I also agree with snowman in that I got myself into this mess. I have always been a risktaker, financially and otherwise. This is the first time I ever lost big. I will probably borrow money again, and I will still take risks, but I may be a little more cautious financially.

I have been doing other things while typing this response, adding to it as I see others responding. Sorry it is so long. I have to go work outside now.

[Gary_C]

Amen to that Tom.

David after surviving in farming with all the ups and downs, I can say that this will pass. Just keep taking small steps ahead and do what you can and you will be surprised at how far you can get. I can't tell you exactly how to do it as every situation is different, but the first place to start is good communication directly with the creditor and see what you can work out to stop the harassment. In my opinion, it does little good to try to work with those professional bill collectors. If you still have some income, try to apportion some payments equally to each debt for some time till you can get back on your feet. You need to be calm and firm rather than threatening. That is really about all a court ordered reorganization will do.

As they say, a journey of a thousand miles starts with just one step.

edit:  I see you posted while I was writing this. All I can add is you may have no choice but to come up with the $2000 to get rid of that credit card debt. Right or wrong, I have little sympathy for those credit card companies right now, especially Chase after what they did to my wife when she was one day late on one payment. And all at the same time Chase was getting money from the taxpayers and buying JP Morgan.

[Tom]

$70,000 is a lot of money. More than the cost of a new pickup.  But, not as  much as two pickups might be.

There has to be some way out.  The sale of tools is one way, but that leaves you with no means to make money.  Working for someone else is another and one that probably should be considered.  Long hours, on top of another job(s) might be a way out and get the business going again too

If you aren't expecting too much from the  business, perhaps getting it going is the fastest way out.  Perhaps the trucks and tools will serve more than one business.

I'm certainly interested in your plan and watching as you climb out of the hole.

Things will be fine.  I just know they will.  They might not be the same as you expected when you started, but it sounds like you have a good attitude, a willingness to make the best of what you have and a good partner.  It's the good partner part that is the most valuable, I think. Women, like a good dog, just don't seem to know when they are licked.   When things are the darkest, they stand the closest.

[snowman]

David your 2nd post is inspiring, you took responsability for your plight and learned from your mistake, You "sucked it up" Tom sorry I offended you, we come from different worlds,as I recall your retired from IBM. Corporate America, probly even had sensetivety training, :D nice retirement I imagine too. I come from a logging family, do or die, sink or swim. Spent my life on the edge financially and physically, fist fights in the landing even :D.I won't say harsh things about you though, we are just from different worlds,universes even!

[Tom]

You're wrong about my world, my occupations, my retirement and my life in general.  Don't think you are the only one in this world that has seen it as a real place, or has brought himself up by his bootstraps.  I still have no respect for your insensitive attitude, but pride Freed in acknowledging you.  Your responses require no explanation, they stand on their own merit.  It's time to get back to Freed's thread.

[farmerdoug]

David,  I will say one thing,  The credit cards are unsecured debt.  They will call and say nasty things but they cannot bankrupt you.  They will kill your credit rating but so will bankrupcy.  Make sure your house is covered first.  The truck second as I assume you use it for business.

[DanG]

David, I have utmost sympathy for your situation, but I don't want to see you give up.  Not knowing much about your assets, I can't be real specific, but it sounds like you are equipped to make some money if you can find a product you can market successfully.  It sounds like a good chance that product might just be yourself.  It may help to sit down and make a list of all of the marketable assets you have, including any skills you have, and try to identify things that people have to have in hard times.  You mentioned something about a semi, so I assume you have a CDL?  That's an asset.  You know something about wood and about construction.  That's an asset too.  We have a good example of marketing yourself right here.  FF member JamesG, my Son-in-law is cleaning up and maintaining foreclosed houses.  That is a new market that the hard times have opened up.  It isn't a career type thing, but it keeps the wolf from the door while his regular business is in a slump.  Another thing that comes to mind is, people aren't buying much new stuff.  As a result, they have to get their old stuff repaired.  If you know how to fix cars, hang out a shingle.  If you know how to repair a roof or deck, hang out a shingle.  Put ads on Craigslist for anything you can do.  Remember, if you make $100 in a day, that's $100 you didn't have the day before. ;)

[David Freed]

I will try to respond to all of your recent comments in one post.

I haven't sold anything from the woodshop for 7 or 8 months. The loads I was hauling with the truck dwindled down to the point that I was only working 1 or 2 days a week, so 3 1/2 months ago I parked the truck and got a job paying $4/hr less than I was paying my employee before I had to lay him off. I am still trying to find something better, but it's not easy to find jobs when everyplace is downsizing or closing. The bank is rolling the truck and house loan together somehow, so the truck will just stay in the driveway for now. Selling already paid for equipment at fire sale prices doesn't make much sense to me. It won't help anyone very much except the buyer that would be getting a great bargain. Our total assets fall well under the maximum allowed for chapter 7. With that said, selling equipment may be the only way to come up with the money to file bankruptcy. We have nothing else to sell and my trees haven't started to grow money yet.

[cheyenne]

There is a way out but your lawyer didn't get 2 grand so he didn't tell you & 2 grand is dirt cheap for bankruptcey. Can't be much of a lawyer. ***Don't claim bankruptcey*** but if you must you can do it yourself for $160.00 Now don't take this wrong but your biggest mistake was using your house as collateral for a business loan. For 90 bucks you could have incorporated your business & protected your personal assets. Your web page says not taking orders will reopen. Another mistake you need all the work you can get & if you reopen everyone who saw that will have forgotten you. The first thing a lawyer tells a client in these matters is change your phone no and make it unlisted. If you want to stay in this business the worst thing you can do is sell off what you need to make a living. Beat the bushs for work & don't give up. Find ways to advertise that are free. Flyers in markets, lumber yards anywhere you can post them. I will do anything I can to help you all you have to do is ask but if your gonna quit don't bother....Cheyenne

[easymoney]

a few years ago i filed for bankrupsy. i had little choice. i had borrowed against credit cards to get a business going. i am not a good money manager anyway. i owed 60 thousand dollars on credit cards and i was nearing retirement age and my business was slowly going down. i started off with chapter 13 but had to switch to 7 in less than a year.i would have been better off to taken chapter 7 first. the banks got nothing i got to keep all my assets and the banks were told to quit calling. some of thier collection agents can be really nasty. i am not ashamed of taking bankrupsy after looking at what the big banks are doing with the bailout money the government is giving them. so much money going out without any accounting for where it is going. for sure none of it is helping the little people that owe on thier cars and homes. i say the banks can suck it up. they thought they were screwing me with 30 percent interest. they got nothing and i got to keep the toys i bought with thier credit cards. ;D

[cheyenne]

And your proud of that ? Is that why you call yourself easymoney....Gag me....Cheyenne

[easymoney]

are you a banker? did i say i am proud of taking bankrupsy just not ashamed. the ones that should be ashamed are the ones that are begging the government for bailout money while paying themselves large salaries and bonuses how can they expect big preformance bonuses while their banks are supposedly going under? any way everything will be ok as soon as obama is crowned king of the usa.

[Don_Papenburg]

Freed ,  I have seen adds  for owner/operators in the papers .You have too keep the truck moving somehow .  It is a big expense /asset all at the same time .  Go to a grain elevator or several in your area get a job hauling grain . The elevator in our area has 5trucks sometimes six moving grain now.  Normaly there will be two .
  Look into Dave Ramsey   .
   Pay off your debt smallest first then put the money from the first debt into the next larger and so on . Just pay bare minimums on the larger debts till you can get to them .    If you are not heating with wood turn the heat down a bit . (I hate that part) but it does save money .
  Open your website for buisiness . You can't make money if you will not take orders. you are paying to keep the website ,make it pay back.  It is like companies that complain they can't sell enough stuff but when you call for an item they say well we have a minamum order of 50.     you have to sell one item at a time so that you can sell more later.   Never dicount a sale because it is toosmall to bother with.  That is a pain but the person will be a happy customer .Happy customers mutiply.
One other thing  a good credit score is nothing to worry about . It just gets you more credit card applications in the mail.    You are looking for a greenback score If it is high you are in good shape .  If your credit score is high you are in trouble.    Cut up the credit cards now and buy only with greenbacks  . Sound easy ,It is not but that is how you get out of debt. only buy what you have money to pay cash for.  It also makes the buying experiance tougher ,seeing them dollars dwindle in your wallet.
  Make a budget every month . Pay utilities House payment and food budget first .  Then your smallest debt  . If you have any left over it goes to the next highest and so on

[David Freed]

Several people keep saying to pay something on the debt, or negotiate with them. I don't know how else to say it. No money means no money. I quit taking wood orders because most people in this area (including me) charge 50% down to start an order. It takes closer to 70% just to buy the material, not counting everything else. I had not had any orders for several months when I changed the website to say we are closed. I can't take orders if I can't afford to make a product. The machines I am trying to sell for the payoff or they will be reposessed were the ones that made the products I was trying to sell. For me to try to keep making things in the woodshop would require buying new knives for other machines (can't; no money), and spending enormous amounts of time doing the work that my reposessed machines would do in one pass. I am already working 50 to 60 hours a week at the job I took.

The website is costing me $25/mo. I was keeping it up in hopes of somehow being able to start back up on a much smaller scale someday, but we really need the $25 for other necessities so it will probably be gone soon. The part that says "We hope to reopen soon" is really a lie. It will probably be at least a year or more before I can even think about trying to do anything in the shop.

As far as the truck is concerned I came home low on fuel on my last trip. Doing that gave us an extra $1000 that we used to settle some debts locally. I gave my Nyle 200, that was just gathering dust, to someone to settle the debt I had with them. It really didn't cover it, but they said it was good enough because they new we were having hard times. I bought my own truck 16 years ago to make money, not just to drive up and down the road. Freight has slowed to the point now that anything that will make money is already taken, and there are enormous amounts of people that will cut rates to the bone just to keep their truck moving. They are the ones that end up going out of business because they aren't making money. I have my truck sitting in the driveway, hoping rates will recover someday, and that some how, some day I will be able to come up with the $2-3000 it will take to quit whatever job I have, and start hauling again. I have no idea how I will be able to do that, but I am trying to keep any possible options that I can,

The trailer that I almost had paid for broke in half 1 1/2 years ago. I had to sell that one for scrap. I made a deal with my neighbor to buy an old beat up trailer that needed several repairs. I was only able to make six payments in twelve months. he said I could keep using it, but my situation was getting worse, not better, so when I came home the last time, I took it back to him so he could sell it.

Another thing that went into the decision to park the truck was that it has 1,400,000 miles on it with original u-joints, king pins, tie rod ends, rear ends, transmission, etc. I didn't see the freight situation improving any time soon (it is worse now) and I was running on borrowed time. I used lots of money from the truck acount to try to make my wood business to work and it didn't. My biggest mistake was starting the wood business. If I hadn't done that, I could have floated through this rough time in trucking and came out the other side. I can't change that now.

As I said before, I know I am not making all the right decisions now, but I am trying to do the best I can with the situation I have to deal with. I have always been able to pull us through tough times buy sheer stubbornness and hard work, but it isn't working this time. Twenty years ago we were having a tough time and I had people telling me I should declare bankruptcy. I worked 100-120 hour weeks for several months and brought us through. I can't physically do that anymore.  Apparently some of you think what I am doing is quitting. If trying a keep a roof over our head and food to eat is quitting, then I guess I am.

I am looking into trying to file bankruptcy without a lawyer as cheyenne suggested, but everything I have read so far says a small mistake in the thirty some pages you have to fill out could cause serious problems, and I never have been that good with paperwork. It sounds like I could easily get us into a worse situation than we are. If just letting things stay on hold for several months in hopes that I could somehow raise my income and make even partial payments was an option, I would, but none of the creditors like that idea. They want something now, and we don't have something right now unless we quit eating, move into the street, etc.

I apologize for this rambling rant. Some days I am just not in a very good mood. I made my first post, hoping there was some answer that I wasn't seeing because this situation is new to me, and I know I don't have all or even most of the right answers. I didn't expect an answer but I was hoping. I also know I am not good at explaining things, so some of you probably did not get the right picture of my situation, which in turn affected the reply you gave. I thank everyone that is trying to help.

[snowman]

Dave your right, no easy answer to your situation, that's why in my 1st post I just said suck it up. Stay stong, keep putting one foot in front of the other,forge ahead. "This to shall pass" Best of luck to you. This economy is affecting us all to some degree or another. hope for everyones sake it turns around soon.

[old joe]

I can understand your situation well having been where you are.  I made the same mistakes, and agonised over the same feelings.  That being said, the best advise I can give, is to do what you must!!  Bankruptcy will kill your credit score but that's not a bad thing.
You can reaffirm your mtge.  And maybe your truck note.  The collectors will leave you alone.  You and your wife can work out a new plan.  You did not get into this shape intending to bail out on your bills, so don't beat yourself over it.  No one foresaw this economy and wiser men than you, or I, have failed against all odds and regardless of their best efforts.  sell your furniture or whatever it takes .  file,  and start again.

all my best wishes

Joe

[stonebroke]

Have you tried one of the nonprofit credit counseling services? We see ads for them all the time up here.

Stonebroke

[tcsmpsi]

David,

I don't see that you have made wrong decisions. As it is said, 'Hindsight is always 20/20'.   We all have different situations, due to our own individual purpose and nature.   I've eaten many meals from trash cans, and I've eaten $1,500 a plate dinners.

Some people stay away from credit.  Some don't.  Some can.  Some can't.  It was available, and many minds well stabilized, clear, rational and even brilliant have considered how to honorably make it work.  Reasonably so.

The world brings unforseen obstacles.  No matter what some like to envision, No One ever 'plans' for them all.

In the position you're in, I would only venture to say, not to let your unsecured debt push you into anything. 

Frankly, due to the nature of how the world works, seemingly unlimited unsecured credit should never have been available.  Those who made it available didn't/don't have the assets to back it.  They lived off the ludricrous interest and penalties, completed with marketing techniques known to beguile humanity. 

From what I read, I have no doubt that you never attempted to beat anyone out of anything.  That put you way ahead of your unsecured creditors.

[DR Buck]

After reading all the posts in this thread, there is little I can add in advice.  However,  I looked at your web page and see that you are not taking orders.   ???    How can you expect to recover if you've turned off your income source?   Why stop taking orders?    Even a small order should be able to help.  If you operating costs exceed your income, perhaps a pricing structure change is needed to help get through these tough times.   

In my book, any income is better than no income.

[David Freed]

 Sell your furniture or whatever it takes.  file,  and start again.

all my best wishes

Joe

Every piece of our living room furniture we got free from different people that were going to throw it away and buy new. We got our kitchen table and chairs for $25 at an auction. In our three bedrooms we have 2 pieces of 20 year old pressboard stapled together dressers, 2 cardboard 3 drawer things you get at walmart for 5 or 10 dollars, and a few other small odd pieces we salvaged from somewhere.

Have you tried one of the nonprofit credit counseling services? We see ads for them all the time up here.

Stonebroke

We tried 2 of those. they couldn't help.

David,
In the position you're in, I would only venture to say, not to let your unsecured debt push you into anything. 

The lawyer we talked to said we would have at least 1 month from the time we received notice that you are being sued for non payment until we have to do something. We are just sitting and waiting to see if anything will develope. I am not rushing into anything if I can help it, but I am now trying to find out everything I can as quick as I can to try to be ready for whatever comes up.

However,  I looked at your web page and see that you are not taking orders.   ???    How can you expect to recover if you've turned off your income source?   Why stop taking orders? If you operating costs exceed your income, perhaps a pricing structure change is needed to help get through these tough times.   

As I said in my last post, I am losing the machines that I need to make my products and I have no money to try to retool the machines I have left. Even if I could retool, it would be a very inefficient way to try to make something, and I am not able put in endless hours like I used to. My hired hand was running the woodshop while I was driving the truck. He has a family to feed and had to move on. Now anything that gets done, I have to do it. I am already putting in several hours per day at a job. I am trying to find a better job, but no luck yet.

If I couldn't get anyone to buy anything before, I don't think raising my prices will help the situation. Also, as far as I know, my website has only resulted in one sale, and that was over a year ago. Besides my website, I have tried flyers, business cards, a sign on a busy road, letters to hundreds of contractors and even asking other shops for jobs they didn't want to do. Nothing worked.

[ErikC]

  I guess when you've tried your best, there's not much else you can do. We have all made risky decisions at one time or another, and sometimes you get away with it. You didn't, but keep your head up. Everyone's advice has been pretty good in my opinion, all I could do is agree with most of it. Sorry to hear this story though.

[Warbird]

You will make it through this, David.  I cannot offer any better advice than has already been given.  I can, and will, pray for you, though.  Let us know how things work out.

[cheyenne]

If your material cost are 70% & you factor in equipment cost, insurance,labor,taxs,advertising,utilities,professional fees,debt load,repairs and more how on earth did you expect to make money. It's impossible, the first time you turned a machine on you just dug the hole deeper. I give you all the credit in the world for trying but it seems like you jumped into something without understanding whats involved with starting and maintaining a business. Not to be cruel but this just might be a blessing in disguise. The first thing I would do is ask your bank for a moritorium on your note all they can say is no but it will show them your trying and they'll probley work with you. As far as unsecured creditors go, their just foul mouth twits sitting in a phone bank room. I'm not saying they shouldn't be paid but if your ever in a position to pay them you can settle the debt for a lot less. Change your phone no, unlisted, put it in your dogs name. Getting unlisted nos is easy. There is a way out but it's going to be hell. Don't give up that's the easy way out....Cheyenne

[DouginUtah]

David,

It wouldn't hurt to try this:

http://www.legalzoom.com/bankruptcy/bankruptcy-overview.html

Bankruptcy lawyer for $999.00 plus $299.00 to file. Free consultation. You might learn something from it even it you choose not to use them.

From what you have said, there is no question--you need to file.  :(

[Warren]

Mr. Freed,

I have gone the "self employed" route 3 times in my life.  Each time I have "gone backwards" financially.  But each time I learned more about running a small business than I knew before.  I started hobby sawing about 5 years ago.  Had a very steady part time business. Two and a half years ago, quit a comfy corporate job and started sawing full time.  Jumped in with both feet. Bet the family farm, literally.  Ended up selling about 2/3 of the farm last year to square away the debt.

Guess what I am trying to say is no need to beat yourself up about the choice you made to start your wood business.  The only people who do not fail in life are the ones who never try. You and I are not the first nor the last people to get in a tight spot over starting a business.  The question is did we learn from the experience so we can take a better swing at it the next time around ?

Fred Smith, who started Federal Express, went broke 3 times before starting FedEx.  Col. Harlan Sanders was in his 60's and struggling before starting KFC.  Even Donald Trump was about a BILLION dollars in debt not so many years ago...

I am back to working for someone else again.  But, still sawing on the weekend.  Still looking at how to "crack the nut" to make the sawing business profitable enough to be my primary source of income.  

I can't help you with your current financial situation.  But, you gotta keep pitching. Gotta keep looking at "What can I do today to make the situation better ?"  There are no easy fixes.  But you will get thru it.  And like the others here on the Forum, I will be pulling for you as well...

Warren

[wi woodcutter]

        David
                Try to keep your head up and try to look for the best. Everyone makes mistakes just so you learn from them.
               
                I've had some friends that filed chapter 7 and 13, not always the best choice.

[David Freed]

Thanks to everyone for all the help and support. I am not going to file until and unless I am pushed into it. I am just waiting and watching for now. As for all the phone calls, the card companies said that even though we have talked to them, it is their policy to keep calling. We have caller ID and we are getting real good at ignoring the phone.



DouginUtah,
Thanks for the info. I will look into it.



One small good thing has come from this already. I started a thread that actually kept going. I'm a real good thread killer, here and other forums too.

[beenthere]

David
Count the blessings that you have, and hold her tight. The two of you can get through this, and am praying that it will happen soon for you.

[WH_Conley]

As not knowing what machinery you will be letting go and what you are keeping, have you looked at an alternative market to use the machinery you have left? Picnic tables, tomato stakes, mobile home blocking, utility sheds, just as an example, might not be the area of expertiese(sp), but if something you could do an hour here or there. These things are just an example, I think they call it "thinking outside the box", heck I have had to think like that so much I can't even see the box anymore. Just remember, there is a difference in being broke and being broken. Good luck, whatever you have to do.

[Faron]

 Dave, I had hoped maybe things had improved since we talked last fall.  I wish I could help you with some of that equipment, but our workload has shifted away from the shop for a while, and I just can't put any money in equipment now.  Are you familiar with Dave Ramsey and his program?  He makes good sense to me.  You can catch him mornings on 1280 WGBF Evansville mornings or on Jasper's 990 WITZ mornings. (Both AM stations, of course)  Many of you would not know this, but one problem I think Dave has with the woodworking shop is he is near a large Amish community.  You can find about any kind of product up there , and they are hard to match in price.  That isn't a slam on the Amish, just a statement of fact. 
I was thinking seriously about a product I could make and sell through a catalog a year ago.  I put it on hold while I pursued another idea dealing with my cattle herd.  I am glad I did that, though I am still working on getting the other idea going.  The problem with some of those products is while they are unique and desirable when times are good, lots of people are not going to spend on an unnecessary item in tough times.  Even folks who are not hurting are going to be careful what they spend money on for a while.  That said, if you think you have a product that might sell, you might take a look at this Country Sampler magazine.  There are still people with money to spend if you have what they want, and if you can get your product in front of them.  If you want to see a copy let me know.  They are in most supermarkets, or I can talk my wife out of one of her old copies.  Know that we are praying for you.  You will see a better day, Dave.