Hello – I’m Markee Dragon, also known as Marcus Eikenberry in real life and today I’m again out in Noxon, Montana – out in the
wilderness, no cell phone connection there is internet. Satellite-based up at at the ranch house. Not in my sleeping
quarters, though above the barn. so I want to tell you about – this is more
entrepreneurial stuff about you know kind of the the rise and fall
rise and fall rise and fall rise of an entrepreneur that resembles me going like this. Hopefully the last one is WOO! Off the chart and then it go back down. So in the last episode I talked a little
about bankruptcy and about what that is so I want to tell you exactly what it means
to go bankrupt how it’s affected me personally
you know and so you can relate to this about how it may affect you if you’re
considering doing bankruptcy so Let’s title this “How to Successfully go
Bankrupt” I can just see the ads coming up now. On all kinds lawyers looking to help you
go bankrupt, So anyway – after my first big business which was a
computer store and I went completely broke on that. I had one hundred eighty thousand dollars in debt after that. And I had a lot of people that I was supposed to pay off immediately and couldn’t so I had no choice but to do bankruptcy. I had
no income either because I had thought that from my sale of my company I was going to get forty-thousand dollars after they had paid all the debt, when
instead a check for three hundred and eighty six dollars because I didn’t read the contract and I
kept all of the debt. So it left me with no choice I had people wanting thousands of
dollars immediately and they were not willing to
accept any less So I you look at this and I’m like, well they’re gonna sue me, they’re gonna
win in court, because I’m guilty I owe them the money and they’re going to..they’re going to win and then they’re going to take all my stuff and I will be destitute They’re going to garnish my wages – they’re going to do all this stuff..you know if I’m working for someone else I’d been self-employed for quite a while did not want to work for someone else
but I did end up taking a job at Micron I have another video somewhere where I talked about it was the worst job I ever had. Worst. But..let’s talk about bankruptcy. So there are two types a bankruptcy that are
generally available to people like you and me. My bankruptcy was caused by bad business decisions it wasn’t that I just ran up a bunch of credit cards buying all kinds of crap and then decided I couldn’t pay them off And so there’s two types There’s chapter 7 which allows you to get
rid of all of the debt all at once including your house but you also have to give up your
house and then there’s chapter 13. Chapter 13 allows you to keep a certain
amount of assets including your house. There is a
certain equity amounts I believe that you can
have in the house before you might have to be forced to do some sort of refinance to
help pay back the money And, so… Chapter 13 is where you make payments
for three and a half to five years after the bankruptcy to the trustee of
the court and then the trustee turned around and makes those payment out to people who made claims against your bankruptcy. So this is very common I did this back in 1999 and…actually, was it ’99? Yeah I guess it was. It took me several
years to get this done And we did we chose chapter 13 because we wanted to
keep our house and so in the state of Oregon it was
something like it keep three thousand dollars worth of assets and we were able to keep our
vehicle and I don’t remember how much the vehicle
allotment was. I know that right now when I last looked it was like fifteen hundred
dollars You know if you have a ten
thousand dollar car and it’s all paid off they would force you to turn it in and then you’d buy a fifteen hundred dollar car and so that you can at least have some
wheels – that’s all you’re going to have for fifteen hundred bucks – but… You know? So, of course…of course the best way to go about this is just
pay your damn bills But, bankruptcy is there for – if someone
like you or I gets into trouble, gets over our head – makes
mistakes or has other circumstances, The most
common reason for bankruptcy is medical bills and you know that happens to all of
us So…we chose Chapter 13 Because we had to save the house and had to save the car. I needed a car to get work to my awesome job that I hate it so much! I didn’t stay there very long. So, some of the things that we went
through: One is that we had to prove all the money we had. We had to prove all of our assets, we had to show how much they were worth. So our couch for instance, we had to know about how much that would sell for like goodwill or something like that so
that you can place a value on it. We had to know everything in all of our bank accounts. We had to know everything about everyone we owed money
to you. I even had to claim family that I owed money to because in a bankruptcy, you are not allowed pay
anyone back even your family. They even ask you this stuff. And if you lie on this stuff then you could end up with…I don’t know, a criminal record and a denied bankruptcy? So you be doubly screwed. There’s no
screwing around that – just be honest there’s another video I did about just being
honest and about how much better that worked out even though I wanted to lie so bad sometimes. But it always works out better. Anyway, so, we put all this information
together. It was very very difficult because we had
to find all of this different stuff. We had to request documents from different
places I did not keep good record keeping and so when we knew that we owed
money to some place but we didn’t know how
much well we had the contact them, get them to send us documentation and those very hard especially when
talking with mortgage companies because mortgage companies are like going to the DMV and getting your
driver’s license renewed and there being some problem. Because when there’s a problem Oh, God, it’s a big problem. So, that is You know keep good records too Even if you’re going bankrupt, start putting all your records together. You’ll be so appreciative of that. So here’s how the theory goes with Chapter
13…Well, Chapter 7 first let’s just talk about that. That’s not what I did on this I
did Chapter 13 but Chapter 7 wipes everything clean and you lose everything but a certain dollar amount of assets. You get to keep your wedding ring which isn’t counted in the value, unless it’s a value that is way outside the scope of
things so don’t go and buy that million dollar wedding ring before you
claim on 1.2 million dollars in debt. They will call you on that. Everything else goes. Except for the basics. they will even…depending on the
state you’re in, they’ll even look at your clothing – how much it’s worth. And you may even have to give up some of your clothing and other items that you wouldn’t even think that they would even
be interested in and it’s not that they’re interested in it it’s that it has value. So, that’s Chapter 7. Its a little harder to go through
Chapter 7 than it is a Chapter 13 There’s a a greater test of documentation and proof to meet. So Chapter 13 says I’m going to pay this
stuff back to people I owe it to, and I’m gonna make
my best effort and I’m going to tell you how to do this
successfully. I had a trick – where we paid it off early. The government
doesn’t allow these be payed off early but I’m going to clue you in on how I did it. Three and a half to five years is the payments that you make. They’ll make payments based upon what you can afford on your income that you are currently making. So I think that my income was was pretty low. I seem to remember that my payments were like five hundred
dollars a month or something like that and you know…So,
if you think about the math five years is how many months? 60 months. So sixty payments 500 is thirty thousand dollars. Is that right? I think so. Okay, so. Thirty thousand
dollars paid back of about one hundred and twenty thousand dollars in debt, one hundred and eighty thousand dollars in debt the debt stuff work out funny depending
on your mortgage and everything because you don’t charge off your mortgage in
Chapter 13 you still have that but I did have a lot
of other debt. So… this other debt is then – they try to get you to make the maximum amount of payments. So if I was only paying thirty thousand dollars in five years then…and I owed like a hundred thousand
dollars they would definitely have me at the maximum
payment they could do and the maximum length. So they decreed that we’re going to pay like
this five hundred dollar amount over five years. So the next month you
start making a payment. Better not lose your job! If you don’t
complete payments then the bankruptcy can reverse
itself and you’ll owe everybody money again except for the money that was paid to the people so far. I think we’re about to have a car go by. I hear it coming. So, it is, that’s what we chose. We chose to do the bankruptcy Chapter 13…Wave at them while they go by! [laughing] Shout out to Aunt Sharon! So, anyway! We started making the payments and…but I started making a lot of
money after we started making payments So here’s the deal: I said to them, “I
want to finish this early I’m want this off my back and I want it
done with.” So I went to the trustee and I said can we up the payments so that I can pay this
off early. Or can I just pay extra they told me no. What do you mean no? Have you ever heard of that? This is how dumb government is sometimes. They said, “No you’re not allowed to pay extra. You cannot pay this off early, it
is not possible.” And so I’m just thinking here…I want to do
the right thing by all the people, still at this point, that got screwed out of their
money. Do you hear that eagle? Is he behind us? There he is, right up there! That is a bald eagle! I wonder if…Let me see if I can zoom in on him. Let’s see, where did he go? There he is. That right there is…where did he go? Oh there he is. Oh, it’s a different bird. Oh there he is. Oh my. Well. We lost him. Okay. So back to what we were doing here. You know. You need a diversion anyway, didn’t you? This is a dry subject! Okay, so. The trustees said no, I cannot pay it off early. I’m just dumbfounded by that. But there is something that they do. I’m going to tell you this trick that we used where I paid everyone back – they all got
paid in full and it was paid off early. It was paid off at three years. Three and half years was
the minimum and I paid it off in three years and the way I did that was – I started
making a lot of money. And I was, you know, having great success with the internet dot com, and you know, back in…So I did the bankruptcy in ’99 and in 2000 my website went KABOOM! and the next thing I knew we had two and
a half million page views a month and I was getting paid…how much was it? It was like, some insane number like three
dollars per thousand views or something like that. I remember clearing checks a thirteen thousand dollars per month for a long time. It was really great! Until it all went bust and then it went down to like thirteen dollars a month and I said I ain’t putting up ads for nobody no more, it ain’t worth it. So, I had all this money coming in and I wanted to pay people off because I wanted to do the right thing. Even though legally at that point I
didn’t have to. And.. These flies out here, I tell you! What I did was, I had a day job while this was still going on. I had a pretty good day job and I was making forty or fifty thousand a year at the day job which was obvious when
I’m bring home checks thirteen thousand dollars a month you know clear after, you know, and working my job that pays me forty
or fifty thousand a month. What was that though that I was taking home? I was taking home five thousand… No. Four thousand? Three thousand and something a month off my day job? I hadn’t quit yet because I needed the security of that because I knew this other stuff was very volatile. So. What I did was I told them to withhold an enormous amount extra out of my check on my taxes. Because the government takes any refunds that you get while
you’re in Chapter 13 bankruptcy, while you’re making the payments, and so
they will apply your refund back to the money owed. On the flip side if you’re really smart
about it you always leave so that owe a little bit of money while you’re in bankruptcy and not getting
anything back because they’re gonna take it anyway, If you’re looking to stiff everybody.
Up to you. So it worked out that I had them pulling out, like, forty thousand dollars a year for a couple of years while making the
other payments and I paid it off in three years. So, the
trustee at that point, when it was paid off said that is the first time that has
ever happened. And I thought Okay! Well, I, just for myself… it is so important to me to make things
right with people and you know even if it’s my bad
decision or someone else’s decision affects me
and it causes someone else to have a negative
interaction with me need to the pocketbook or however. I
always seek to make that right and just because of who I am. But you know, like I said You know, with those taxes thing. This is
a way that you could do it if you come into a lot of money. You know.
Why not? You know those other people are just
like you that you owe the money to. They are hard
working people they are just like you and me. Maybe
they’re more successful because they have a company or something like that…but they still
work hard for their money and they still deserve it. But they don’t
deserve to have it taken away from them. In fact I wish… I don’t think that any of them were paid
interest on top of it. But if there was that, they would deserve it. The only other thought I have is that in doing a bankruptcy like this… It stays with you for a long time. and…I had no choice. So I did it. And I did it because I
realized that it was going to help me get on my feet again. Because even after that…so I didn’t have
all this dot com stuff happening right when I filed. You know, all this mad success. That came up actually right around the same time…but
I had no clue that that was going to happen and if I had known that that was going
to happen, then I would have been talking to everybody saying, ‘Hey I’m gonna have an
extra ten thousand dollars a month” I would have left a few thousand for myself for play money. You know I’m a ten thousand dollars a
month to dole out everybody. And you know it’s one hundred and twenty thousand that was owed, or whatever. So in a year everyone will be paid off. But I didn’t have that ability, because I didn’t know. And, so… It stays with you a very long time. Now,
you hear that the bankruptcy will fall off the
record seven to ten years? Something like that. The fact
though is that on your credit it will stay with you for the rest of your life and here’s why: it won’t appear on
your credit report but on loan applications and different
applications even work applications it asks you have you ever filed for
bankruptcy or have you ever gone bankrupt. And if you’re going to be honest you have to
answer yes, and when you answer yes that has a negative impact on what they
think of you and their evaluation of whether to give you a loan or to hire you or what not. At this point…so I have to answer yes. Now people will still loan you stuff. I know this because afterwards I
got loans! But I didn’t get them right away. In the first year afterwards, plan on paying cash only for everything
and if you have to do something like get a car? You are going to pay
probably the maximum interest rate your state law allows. And you’re going to be kinda screwed on that. You won’t have any choice. And so you are not only…you know
maybe you should have just paid the money back because you’re going to be paying it later anyway. I don’t know. Just a way of looking at it. I hope this helps you, if you’re doing bankruptcy yourself. I can’t really advise you on where to go. I’m sure that there’s plenty of ads showing
up on the video here of places to start, and you can, you know, or just Google “bankruptcy” Or there are free services in every city for helping people with bankruptcy now. You’ve got to know there’s a difference. Ask if they’re non-profit. Because if they’re non-profit then they are there to help you. If they are for profit, then they may very well be there to make money off of you. And…you know, your lawyer should make money off of you when you hire them to help you through the bankruptcy, but at
the same time there’s a lot of other companies out
there that’ll play on your needs and get you to pay out money, and I’ve heard of other horror stories with that so make sure that you You know, get referrals of places that you’re thinking of working with. Ask your friends – don’t be embarrassed,
bankruptcy happens Ask your friends, you know, who do you
recommend for you know that…Have any of you ever done bankruptcy? And then ask them who they went through and their experience. Because if they had a good experience and they
live in the same town as you then maybe you should use the same people as them. Just saying. I’m Markee Dragon, take care.