"Bankruptcy Success Story"

This is our bankruptcy success story. Both my spouse and I were successful career professionals making $150,000 a year between us, plus we had company-paid and maintained cars and bonuses, etc. Unfortunately, we lived up to our income and used credit cards for convenience because we could pay them off at any time.

Then my spouse had a serious depressive crash that disabled him from working for a year. Suddenly we had a $150,000 lifestyle and only my $75,000 coming in.

We also had a rental apartment located in the state in which we previously resided. A line of renters who didn't pay the rent, so we couldn't keep up with the mortgage, and a management company who charged a lot but didn't give us much for our money made matters worse.

When my spouse brought it up, I was adament that I would not file bankruptcy. It felt like a very shameful thing to do based on my upbringing and I would have felt like a cheat to do so.

So we tried working with one of those nonprofits that helps you negotiate your credit card payments and interest down so you can get out of debt in just a few years. We gave these people $1300 a month to pay out accounts with and they just screwed us. They treated us like we were trash and they sent all our credit card payments in late, then charged us for the service?

At the end of 6 months with them the phone was ringing off the hook from creditors (which caused huge mental and emotional stress) and the rental apartment was in foreclosure.

I hand calculated out how long it would take us to pay off these high interest balances and the answer was we couldn't. We could pay the minimum every month and never get paid off.

I was still hesitant, but started to research the two different types of bankruptcy, although this was more than ten years ago so the specifics of the laws may be different now. Everything I read about filing bankruptcy at the time said, "Don't do it! It will ruin your life!" I could find no positive information (and definitely nothing that could be called a bankruptcy success story) about it anywhere.

I know now that my fear of filing bankruptcy was this vague feeling in my mind and gut that if we did it something terrible would happen, like all the neighbors on my street would march over to our house in parade fashion and berate and chastize us for having filed. I don't know why I felt this way, I guess it was just social programming from my family and society.

Eventually, I realized I had no choice. I finally gave up, gave in, and we filed Chapter 13. I initially felt so stupid although the lawyers we used were fabulous and did everything they could to make us feel okay about needing a new start.

The day we went to court I was just mortified. We went into this big crowded court room, took two seats and waited with our lawyer. After a few names of others were called and their cases dispatched our name was called.

I had a huge fear the judge would single us out and ask why we thought we should just get off scott free, but nothing bad happened at all. Our lawyer responded to the judge at the call of our names, we were asked to verify our identities and the validity of all the paperwork and then we were finished.

We walked out in only about 15 minutes and then it was all over - no more telephone ringing off the hook, no more mental and emotional stress, my spouse and I stopped fighting, which we had been doing daily for months.

I suddenly felt the weight of the world lift off my shoulders. We went home and had lunch. Nobody came to our door to chastize us. And we made a plan for our future.

We pledged never to get into credit card debt again. We didn't even get new credit cards for 6 years or so, though we got offers every day in the mail. We used the debit cards our bank issued against the cash in our checking account, so we had the convenience of having a "credit card" and the practicality of paying cash.

We were not put into a position of not being able to get new credit, or not being able to do things without a credit card as the bank debit/Visa card is accepted by everybody as a credit card. AND the best part is that they let us keep my 401K, which had about 25,000 in it.

We also kept our car loan because we could continue to pay on that, but the thing that knocks my socks off is that 1) We kept our credit noses clean for 1 year, 2) Then took the money out of the 401K as a downpayment on our first house.

We didn't think anyone would give us a mortgage, but it was easy. We had 20% to put down and got a slightly elevated interest rate 9.9% which we refinanced lower a year later, and we owned our first home together one year after filing Chapter 13.

I was amazed at all the social and peer pressure out there at the time to discourage folks from doing so, but it was the best thing we ever did and now, 11 years later we have excellent FICO scores 750 and 800 and own our own home.

Why wouldn't anybody tell us the truth about the consequences? It just wasn't fair to put us through that misery and shame when we had done the best we could. So that's why I'm telling you our bankruptcy success story. Cause it's all true.

Contributed by Kathleen from Minnesota