You’re buried under what feels like an insurmountable pile of debt; it’s all you can think about. You’re anxious, losing sleep at night, and constantly wondering how you’re going to dig yourself out of the hole you now find yourself in. You feel embarrassed and ashamed you’ve gotten yourself in this position, and those feelings only grow more intense when you actually contemplate what used to be unthinkable: filing for bankruptcy.
I know how you feel because I’ve been there. I filed for bankruptcy in October 2006 and it just recently fell off my credit report, ten years later.
This isn’t a shame post, a lecture, or even an argument to sway you to one position or another. You’ll get enough of that. Bankruptcy lawyers will tell you that it’s not a big deal. Family and friends will likely encourage you to work through your debt without filing bankruptcy. I’m simply going to give you my story as an average person that filed bankruptcy, lived through the ten year period of waiting for it to fall off my credit report, and later I’ll be writing about the pros and cons of filing bankruptcy.
Filing for bankruptcy: How it all began
I was 24-years old, living in Chicago. I didn’t know a soul, having moved a few hundred miles from my small hometown in Northern Michigan to take my first, real job out of college. Yes, a 24-year old should probably have started working a bit earlier than that, but I was a a vagabond for a few years after graduation.
I won’t get into the details, not now at least, but about nine months after living in the Windy City I found myself with approximately $25,000 worth of credit card debt. Having grown up with parents that always taught me to spend less than I earned, save, and invest (among other valuable lessons about money), I felt incredibly embarrassed about my predicament. This feeling of embarrassment was so strong that, ironically, in hindsight, it was one of the reasons I decided to file for bankruptcy.
Trying to pay down the debt
But filing for bankruptcy was not the first solution that crossed my mind. I aggressively started trying to pay off the debt, and I was no longer spending beyond core necessities. I was making about a $50,000 salary with some small quarterly bonuses. But the more I pushed and worked to pay down my credit card debt, the more anxious I felt. I was forgoing a lot of things I needed to stay mentally healthy, including a social life. I obsessed about my debt, and I didn’t talk to anyone about it. It felt like I wasn’t making any progress, and I was becoming increasingly stressed. That’s the point I decided to seriously consider filing for bankruptcy.
The decision maker
At the time I had a long-time on again, off again girlfriend. We were currently trying to do the whole long distance relationship thing. It wasn’t a health relationship. But I didn’t realize that at the time, and I decided to finally confide in my girlfriend about my situation. It was an ugly conversation. She didn’t believe that I could have accumulated so much debt. In the end, she accused me of having found someone else and spending lavishly on this other woman.
I was baffled; it couldn’t be further from the truth. The one person I thought I could trust and confide in turned against me. In hindsight, this was probably the worst thing that could happen at the time. Instead of support and understanding, I found hostility. I now felt like anyone else I might confide in would react the same way. So I didn’t. Instead, I immediately began Googling bankruptcy attorneys in the Chicago area.
Working with a bankruptcy attorney
The biggest thing you should be aware of when it comes to a bankruptcy attorney is that your interests are not aligned. A bankruptcy attorney makes money when she files bankruptcies. That means they aren’t in the business of talking you out of filing for bankruptcy. In fact, it’s just the opposite. And that’s exactly what my bankruptcy attorney did with me.
I was 24. According to my bankruptcy attorney that was a huge benefit. I’m young! I have plenty of time to rebuild my credit! These were all great things my bankruptcy attorney touted.
And I ate it up.
Because I chose not to talk through my debt issues with anyone else after speaking with my girlfriend (to her credit she told me not to go through with it), I never heard counter arguments to my bankruptcy attorney’s positives. Instead, I was feeling pretty good. Heck, I was even starting to feel like filing for bankruptcy was the wise thing to do.
And it was only going to cost me $1,500.
I didn’t have $1,500.
Sadly, and quite ironically, I had to save for a few months to get the money together to file bankruptcy.
The actual day I filed for bankruptcy
The whole scene is pretty hazy by now, some ten years later. But I remember going to a courthouse, waiting my turn to enter a small room. I sat on a chair, my bankruptcy attorney next to me. Across a small table was a man with a recording device. He said he would ask me some questions. I remember having been prepped for these questions. They all had to do with assets I might have, accounts I was including in the bankruptcy filing, and things like that.
It was intimidating, uncomfortable, and embarrassing. But it didn’t take long. I signed some papers, and walked out with my attorney. It was done; I remember feeling incredibly relieved.
Life after bankruptcy
The first thing I remember feeling after filing bankruptcy was emotional relief. I could sleep again, and I was no longer worried about my debts. But that feeling didn’t last long. It was replaced by feeling “dirty”, like a societal black sheep. I didn’t feel proud that I’d played the system to my advantage. I felt guilty for welching on my debts and ashamed for getting myself in such a place to begin with.
And that feeling seeing your credit score plummet that first time you check it, realizing you have a long road ahead… it’s quite sobering. I had to get a new bank account and start really focusing on how I was going to rebuild my credit. This deserves a post in itself, and I plan to write one.
I’ve had four really “rock bottom” type lows in my life. And filing bankruptcy is definitely at the top of that short list. Filing bankruptcy is not a decision that should be made lightly, and that’s exactly what I did.
Unfortunately, it’s a relatively taboo topic, and not many people talk about it. There are the typical pros and cons lists, but I haven’t found a good first-hand account of someone’s experience. I hope to change that with my posts reflecting on my personal bankruptcy experience and maybe it will help provide the information to others before they make their decision.