"A Bankruptcy Lesson"

Life After Bankruptcy Stories

I was taught at a young age, "When you get a job, open a savings account and start putting money in it every time you get paid." That was great advise.



I was also taught, "Manage your debts carefully. Don't get in over your head." This too is worth passing on to my children.

Then I was taught, "Filing for bankruptcy is the worst thing you could ever do financially." WRONG! Sometimes, bankruptcy is the smartest thing a person could do.

I spent years building a good credit rating so I could buy a house when I was ready to. I once applied for an unsecured loan for $2500 from a local credit union. The loan officer asked if that was all I needed, because I could have all I wanted. That was a great day. I felt like a king with unlimited resources.

Then I mortgaged a house and took on a little more credit card debt than I should have. Things were tight, but I thought I could manage. And I could until gasoline started its rise to $4.00 a gallon (it had been $1.50).

All of a sudden, my credit card payments were going into my gas tank. I started bouncing my credit card balances from one card to another until I had maxed out most of my cards. My credit score then started to drop, which in turn caused the credit card companies to start dropping my available balances.

I started missing payments. Interest went up, balances went up, minimum payments went up, gas went up, nothing was going down. Stress and anxiety was, at this point, starting to manifest itself physically.

A trip to the emergency room with major chest discomfort, finally proved to be an anxiety attack. Arthritis pain got worse, acid reflux got worse, pain from diverticulitis got worse and added doctor bills and prescriptions added to my financial woes.

I was near my breaking point. I was home one afternoon when I got a call from work. There was a meeting the next day to go over the company's plan to slow production to coincide with the lack of work. NO OVERTIME ALLOWED! Seven months, working 36 hours a week (down from an average of 42).

I simply could no longer pay my bills.

I consulted a credit counseling agency and entered a plan to pay back my credit cards all in one monthly payment based on my new income level. It was working fine until the company took another step back. Layoffs and cutbacks across the board.

I didn't lose my job (this time) but I didn't keep my position. I received a 23% cut in pay. Once again the anxiety problems started up. Once again, I couldn't pay my bills. After a year of struggling, I was drowning in debt.

Then it happened... I was laid off from work. That was when I decided to file for Chapter 13 Bankruptcy.

That was the best decision I've made in years. I was able to keep my house, and enter into a plan that freezes interest, and covers all debtors, not just credit cards. I am now able to pay my bills again.

Filing bankruptcy is not the end, it's a second chance. I am now starting over, with a budget I can manage. Stress has been reduced immeasurably. Other health problems seemed to all but disappear. I only wish I had filed sooner.

Soon my credit score will start to improve and I can file this whole experience away and call it a lesson learned. I'm truly thankful that bankruptcy was a legal option.

Contributed by Morris from Virginia