"Bankruptcy After College"

Life After Bankruptcy Stories

When I had to file for bankruptcy, it felt like my life was over. I was only 26 and felt like I’d messed up my entire future.



At the time, I was a recent college grad in a small town and couldn’t find employment in my degree field: everyone wanted experience, but no one would hire me so that I could get it!

I was working as a monitor at an alarm company, making a whopping $1000 per month. My studio apartment cost $300 per month, my car payment was $200 per month, and with my other bills I started having to use my credit cards to make ends meet.

Then my student loans came due. I had loans with two different servicers and the payments totaled $400 per month. The companies wouldn’t consolidate my debt and, believe me, I begged.

At this point I got really scared. I still couldn’t find a job in my field, so I started driving farther and farther away to look for work. I also started trying to get secretarial jobs, since I had secretarial experience.

What a frustrating experience! The jobs in my degree field required experience, but people hiring for the secretarial jobs were scared off by my degree.

It finally got to the point where I went to my parents for help figuring out how to pay my bills. My parents racked their brains trying to figure out a way to make it work until they finally said what I’d been afraid of hearing: “Maybe we should call a bankruptcy attorney.”

I scheduled the appointment and my dad went along for moral support. Waiting in the reception area, I felt like a complete and total failure. After introductions with my attorney, he looked over my income and my debts for a few minutes.

Finally, he looked at me and said, “I don’t know how you’ve been making it up to now.” It probably sounds strange, but that made me feel so much better.

He told me I’d benefit from Chapter 7 bankruptcy and that he’d arrange for my car to be repossessed. (Fortunately, my parents had a clunker they didn’t need that they gave me.)

The only debt I couldn’t discharge was my student loans, but it’s amazing how quickly one company agreed to turn my loans over to the other company once they found out I was in bankruptcy!

After I left my attorney’s office I met my then-fiancé to tell him what was going on. That was a terrifying conversation to have, because he was so good with his money that I just didn’t know how he would take it.

He took it like a champ. Of course he wasn’t thrilled that I was going through bankruptcy, but when we went over my bills and my pay stubs he understood.

Next I had to decide if I would tell anyone else. I told my sisters and my best friend, but decided no one else needed to know. I’m pretty sure people at my work had their suspicions, especially after the repo man decided not to give me the benefit of the doubt that I’d turn the car in willingly and showed up at my job with a tow truck. I told the co-workers who asked that I just couldn’t afford the car anymore and left it at that.

Even now, years later, the only people that know about my bankruptcy are my husband and the family and one friend I told at the time.

Filing bankruptcy was not a pleasant experience because I felt like I had failed. But it ended up being a positive experience for me. I learned that a car is just a means of transportation and not a fashion accessory. I learned that credit cards are horrible and to avoid using them at all costs.

And I learned that I can make mistakes without necessarily being a failure. Last year my husband and I bought our first house together. Even with the bankruptcy on my record (it’s expunged this year), we were able to get a mortgage with a 5% interest rate because we both handle our money responsibly.

I’ve definitely come through the other side of the bankruptcy experience wiser and, hopefully, I’ll be able to pass that wisdom on to my children.

Contributed by Kathie from Texas