Bankruptcy is a new chance at life. In many ways it is a complete and total financial death, but it is also the opportunity for financial rebirth! No matter what the circumstances that led to the bankruptcy were, it becomes very, very important to manage things correctly from that point on.
I was one of those people who waited far too long to declare bankruptcy. I struggled with my debt for two years before I even considered that bankruptcy could be the right option for me. Because of that I have nearly two years of late, and non-payment marks on my credit report in addition to my bankruptcy. I allowed my debt to be sold from bank to bank during that time. Each time someone new bought my debt, it created another open account and black mark on my credit report.
Once my bankruptcy was discharged I knew that I wanted to take full advantage of it, and create a truly “fresh start” for myself and my family. Except it wasn’t really a fresh start. I no longer owe the money but my entire history is still there, in black and white on my credit report. And it will be for the next seven years.
Poor me right? Not really. I’m strong enough to deal with it, and fix what I broke. I’m also strong enough to deal with the consequences. If you’re considering bankruptcy as an option, make sure you’re strong enough too. Now matter how desperate the situation is right now, it will be even more desperate if you handle your life the same way after bankruptcy as you did before.
I think that’s what people who haven’t declared bankruptcy don’t understand. Yes, I got away with not paying what I owed several collection agencies at that point in my life. But I sacrificed the next ten years of my life as far as my credit is concerned. I stopped the collection calls, and the sleepless nights, but I bought myself a load stress-of-a-different type.
There is a price to be paid when you declare bankruptcy – it’s both emotional and financial. It is emotional in the sense that I feel guilty – I did something wrong, I didn’t pay my bills. I couldn’t pay my bills because I couldn’t even put food on the table. The fact that bankruptcy was the right option for my family at the time does not make it any less painful to know that it was something I should have been able to avoid.
The financial price of bankruptcy comes with the high interest rates that I will pay (if I can get a loan at all) for the next ten years. The price also comes when legitimate lenders refuse to deal with me because I have a previous bankruptcy – no matter how well I’ve handled my finances and my credit since that time.
Bankruptcy is not a free ride, at least that was not my experience. It was a desperately needed life preserver offered when I was drowning. But it is still going to be a long, long swim back to shore!
I think for most of us (those who have declared bankruptcy) the bankruptcy itself is just the tip of the iceberg. Underneath the waters is a long list of troubles, pain and misery – all of which we caused ourselves. Every bankruptcy has a sob story, a list of hard knocks. But what do we take away from that?
Well, speaking for myself I can tell you without a doubt that I took away quite a few lessons from my own bankruptcy:
- I had to accept that I was the problem – Even though a large amount of my bankruptcy debt was medical, it does not mean that I get to sit back and blame the health care system in this country. I chose to go without insurance. And so I had to understand that there were consequences for that.
- I had to learn to manage my own money – After bankruptcy lenders aren’t exactly falling all over you to offer you credit. So the money that I had was all that I had, and that was such a wonderful lesson for me.
- I had to learn to pay my bills on time – Since I didn’t want another series of charge offs, late payments, and black marks on my credit report, I made paying those new bills a priority. Most people out there already get this concept. I’ll openly admit I was stupid abut my finances! It just wasn’t something I ever thought about. There was no money, so I couldn’t pay the bills. After the bankruptcy, I had to pay the bills – which meant that I had to take on a second job to raise my income.
- I learned that my credit report is a lot like owning a very nice car – I had the equivalent of a brand new BMW and I chose to drive it off a bridge with my bankruptcy. Now, it is up to me to salvage what is left. No one is going to hand me another Beemer, it’s up to me to fix the one I destroyed. It requires making repairs, active maintenance and regular tune-ups. I learned that my credit report isn’t something that Is just “out there”. It’s my report, and I am responsible for what is included there.
So, in a lot of respects, my bankruptcy is the best that ever happened to me financially. Not because I no longer owe all of my medical debt, but because It forced me to put every single area of my financial life in order. I am a better person because of it today. It’s definitely the most major learning experience I’ve ever had.
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