Several years ago I was faced with a crippling amount of debt and bill collectors calling my friends and family. Some of my debt was the result of just plain bad decisions. I was feeling a lot of post-divorce guilt and spent a lot of money on my kids. Some of it was survival debt. The car needs repairs, but there’s no ready cash, so it goes on a credit card. I reached a point where I decided that bankruptcy was my best option. I learned a few things during the process.
Filing Bankruptcy Is Hard!
Don’t let anyone tell you that you just walk into a lawyer’s office, fill out some papers, go to court and you’re done. There is a whole lot more to it than that. Each type has it’s own requirements, but I had to make a list of everything I owned and its estimated value. Everything I owned. Even my ancient couch that I would have had to pay someone to take off my hands had to be written down. There were also online classes that I had to go through in order to understand the process and learn how to rebuild my credit after it was over. It was not a simple process, and I think that’s a good thing.
It Is Emotionally Draining
Maybe it’s easier for some people, but it was very difficult for me. I believe in paying my bills, and paying them on time. I still feel bad that I ended up in a place where I could not pay my bills. There were a few things that the credit card companies did that I felt really pushed me to file that they didn’t have to do, but overall I was still at fault, and I had an enormous amount of guilt over leaving someone else holding the bag for my choices. During the process I gained a new understanding as to why some people take their own life when faced with financial problems. I wasn’t suicidal, but I was incredibly depressed, and I did see how someone could get to that point.
Everyone Will Want To Give You Credit
You’d think that once you’ve begun the process of filing for bankruptcy that no lender would touch you with a ten foot pole. I found quite the opposite to be true. Everyone wants to extend you a line of credit, or sell you a car. I started getting offers in the mail from car companies I had never heard of and lenders that looked incredibly shady even before my court date. It seems that certain types of lenders actually look through bankruptcy records and target people who are filing. I won’t even begin to tell you how wrong I think this is. I was also under the impression that my credit would be so bad I could never get normal financing for anything. This also proved to be untrue, at least in my case. While credit card interest rates are though the roof after you file, I was able to get a normal car loan through my credit union.
It Doesn’t Fix The Problem
I’d love to say that I have remained debt free, learned my lesson, and all is well. That isn’t the case. I didn’t do enough to fix my income situation after filing to avoid survival debt. I also didn’t do enough emotional work to stop myself from making impulse purchases. I’m not in a position anywhere close to where I was when I filed, nor will I let myself get there again. I do understand a lot more about myself now, and this time there will be a new plan implemented to ensure that my debts are paid and that I stop emotional spending.
How Do I Feel About Bankruptcy?
I wouldn’t say that I am for or against bankruptcy. I feel that there are pros and cons to filing, but I vowed the day I went to court that I would not be in there ever again. It’s a personal choice based on your unique situation but I hope that everyone considering it gives it a lot of thought.
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