Our Story

So this will be my first real post on this blog. I really wanted to elaborate more on the current situation we are in and later I'll dive in to our goals and current financial situation.

My wife and I live in Fremont, California with our 3 year old son. I'm currently working as a Technical Support Engineer for a security company based out of Mountain View and make, what I consider, to be a fairly decent salary. I've been with this company for close to 10 years, which means I made quite a large chunk of change back in the peak of the DotCom years. At one point I had several thousand options priced below $30 when the stock itself was trading at $230+. While I know that last sentence will have most people in the valley salivating thinking of all the money to be made, I had to learn a lesson the hard way about Uncle Sam and how he always expects his cut.

Before I moved to California I had never made more than 8.50 an hour in any kind of job, thats including the Sys Admin role I had an ISP in my hometown of Lufkin, Tx. When I got out here at 19, I was told how much salary I'd be receiving and I nearly flipped. I'd never made that much in my life and I was happy to work my tail off to earn it. I found out later that I was grosely under paid, but thats a seperate post.

So after a year with my company I start getting notices that I'm able to vest my options, I had never looked into them before so I started doing some research and came to find out that I was sitting on about $900,000 (fully vested) worth of paper. I'm pretty sure it was at this point that I fainted, or at least had a mild coronary. Over the next year and a half, before the bubble burst, I made closed to $400,000 in income. To say I was not living comfortably would be naieve, but I can honestly say that I never did anything smart with the wealth of money I was given. Instead of putting into investments, I put it into cars, and vacations, and computers and other forms of entertainment that meant a lot to me then and that I want to slap myself daily for now.

Well, as they say all good things must end and at the end of the year 2001 my girlfriend at the time told me I should probably hire an accountant to help me deal with the money I had made. I gathered together all of my tax info and took to see an accountant. It took them a few weeks to get all of the information sorted out, but I finally got the news and almost had another heart attack. All told, I owed about $108,000 to the IRS and another $25,000 to the Franchise Tax Board (California IRS).

When I received this information, I had a little over $27,000 in my brokerage account so I immediately sent off a check to the FTB to make sure at least I wouldnt have two agencies gunning for me. The rest of the money had been...wasted. I hate to say it knowing how much I could have done with it, but really at the end of the day I didnt even have a good credit score to show for it.

I tried (unsuccessfully) in 2005 to file an offer-in-compromise, unfortunately I was rejected for a missing tax return from 1997 (when I worked at a grocery store making minimum wage). I had no way of getting the w2 for a job I worked at 10 years ago so I waited for them to contact me. I was finally contacted by the IRS in January of 2007. My balance had balooned $154,000 because of penalties and interest) and I was asked if I would be able to pay it. I informed them that I did not have the money and wouldnt be able to pay it off anytime in the next 10 years, but that I really wanted to work out a payment plan and get this debt payed off. After telling the IRS I could not pay, they promptly filed a tax lein on any and all property I had (which happened to be nothing). I found over the next several months that dealing with the IRS is a lot like trying to fit a square block through a round hole. I made several payment plan offers to them over a four month period, even going as far as offering over $1000 a month for the next 8 years to help pay off the taxes I owed. Each time I was told that according to their numbers, I made enough to pay nearly double that and they wouldnt accept less.

I finally settled on filing for chapter 7 bankruptcy in Sept. 07 after I was told that they would soon be filing a garnishment of my paycheck. While I made enough money to force me into chapter 11 if i was filing for consumer debt, I had never carried over 2k in debt on credit cards and a car note, that was the extent of my credit. Because of that I was able to apply and was finally approved for chapter 7, which was discharged the last week of November, 2007.

I guess now, I'm back at square one. I have a single credit card in my name and a car loan and now I dont have Uncle Sam leaning over my shoulder waiting to pounce. I've started using banks and savings accounts to store my money and I've even started looking for some deals online that can help give me a larger return on my savings investments.

This blog's main purpose is to help me get back on track to being financially free from my debt. I'm willing to work as hard as I can to save every cent possible until my family is secure enough to buy a house, pay off our car, and plan for our son's college education.

Because of my tax debt, I've been in the red for over 7 years. Now that the bankruptcy has completed and the debt discharged its time to start work on getting back in the black.