We knew we needed to declare bankruptcy two years before we officially did it. We were struggling financially, and we barely had enough money to cover the bills and the gas at the end of the day – which didn’t count the nearly $30,000 in debt and medical bills that we owed.
But still, we struggled. We had been raise to pay our debts, plain and simple. My husband and I took odd jobs in the evening to earn as much extra as we could, and he started back to school through a plan at his work where they paid for it.
I think what finally did it for us wasn’t the vicious collection calls (which followed us everywhere) or the constant stream of overdue bills in the mailbox. It was the realization that at our current rate, it would take us nearly 15 years to pay down our debts in full.
The last straw was when one of the medical companies put another garnishment on my husband’s check. The money that they would be taking out meant that we couldn’t afford our rent, or food for the next 6 weeks.
So, we gathered all of our bills and paperwork together, and went to see a lawyer. The lawyer we used was human enough to take payment arrangements (It cost us just over $1000 to declare bankruptcy). I think he allowed us to make an arrangement with him as much because we were organized, as anything else. We only had $200 to offer him when we first walked into his office.
But, he did take our case, and he did stop the garnishment. Within two months we had received our bankruptcy discharge papers. The collection calls mostly stopped, (We still had to give some of them our bankruptcy information) the bills stopped coming, and we slept easier at night.
Now, several years later, I know that there were good and bad things about choosing to declare bankruptcy. For one thing, our credit is ruined. However, it was ruined before, and it would have been close to 15 years before we could have met our obligations and fixed our credit anyway. Truthfully, bankruptcy put us on the fast track to recovery. What little we had, we were able to save instead of giving to a bill collector.
We were able to go out and get secured credit cards immediately, which are helping to raise our credit score. After the bankruptcy was finalized, we began challenging accounts on our credit reports, and this also helped to raise our score.
I think there is a huge myth that declaring bankruptcy will ruin your life forever. It would be more appropriate to say that it will not ruin your life at all, just your credit, and only for about 4-5 years.
I do personally have some guilt that will probably always stay with me. I feel like we cheated. We shortchanged companies that we did owe money to, and did not pay them. We imploded financially. Because we did not carry any insurance, and because we were afraid to ask for help. We waited until things were so bad, that there really was no other way out.
It was a lot like what I imagine living in hell to be, and I know that there are others out there that have it far worse than I did, believe me. But for me it was a worst case scenario and not only I did live through it but I am better off for the experience.
The truth is, we started getting car loan offers before our bankruptcy was even discharged. Less than a year after bankruptcy I could get an unsecured credit card. Five years our of bankruptcy I expect that our credit will have rebounded enough for us to a house. The bankruptcy will remain on our credit report for the next ten years, but the effects of it so far are negligible.
The truth is, my bankruptcy hurt my credit far less than all of the revolving medical accounts did. When one company sold the debt to another, it opened up a new revolving account on my credit report. I had as many as forty revolving medical accounts listed as open on my credit report when we declared bankruptcy.
You know, the real truth is, our bankruptcy didn’t hurt us – it set us free. Free from a life of garnishments, collection calls to my job, friends and relatives, free from the prospect of overwhelming debt for the rest of my life. I would do it again tomorrow if I had to, and happily live with the guilt. Our bankruptcy gave me and my family the chance to have a normal life again.
We took that chance, and today we are far batter off than many of the people we know and work with every day. Because we have been very careful not to go into debt since our bankruptcy, our money is our own.
Do understand that bankruptcy is not for everyone. It takes a long serious look at your finances to decided whether or not it would be the best course of action. I can simply say that for us it was, and I will always be glad that we did it. No matter what the damage to our credit score was, the benefits of being debt free in one fell swoop (instead of 15 years!) were well worth it to me.
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