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"Lisa and Stephen Furry have hit financial rock bottom, even though they're not acting like it. The couple filed for bankruptcy a little more than a year ago, wiping out $50,000 in credit card debt, yet their household spending outstrips their income. They shop at Whole Foods, spend freely on beauty products and splurged on a wedding anniversary getaway to Santa Barbara — at a four-star hotel.....'
".....Even without the house payments, Hartman figured the Furrys were spending as much as $1,000 more a month than was coming in...."
"....Lisa spent about $275 a month on beauty products and services.....'
".....The couple's pets, which include a rabbit, cost about $200 a month....."
I didn't read the article but from what I know of bankruptcy, the judge can opt to not discharge your debts if you prove that you are still spending unwisely. If they did reorganization (forgot which chapter is which), their trustee can dismiss the case as a whole. You can only file like once very 7 or 10 years so they are only screwing themselves if their case has already been closed.
This is part of the reason we have seen a "bounce" in the economy, we have millions of people not paying rent or a mortgage, yet they are out spending. Some studies put this figure at a positive $12 billion a month to the economy.
I didn't read the article but from what I know of bankruptcy, the judge can opt to not discharge your debts if you prove that you are still spending unwisely. If they did reorganization (forgot which chapter is which), their trustee can dismiss the case as a whole. You can only file like once very 7 or 10 years so they are only screwing themselves if their case has already been closed.
Chapter 13 is a repayment plan, chapter 7 is discharge of debt.. But the problem with your scenario is that often times the spending wont begin back up until after the bk is discharged. Creditors will re-open credit for most people at a high interest rate after you file bk because they know you cant file it again for another 7-10 years..
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