"Learning Our Lesson from Bankruptcy"

Last year my wife and I declared Chapter 7 bankruptcy. We had accumulated over $70,000 in credit card debt.

We were married in 2005 and bought our first house the same year. After the wedding we were debt free, but we had an entire house to furnish.

Because of my excellent credit I had several cards with high available balance. We began to use the credit cards for larger purchases for our house, such as: new deck, fence, couches, and bedroom furniture.

We thought that with a low percentage rate we would be able to pay off debt in no time. Well, my wife lost her job. She quickly found a new job, but for less pay. We started to struggle to make our minimum payments.

Our thinking had been that if we really wanted something and a card balance was at $5k then another $500 or so wouldn't change the minimum payment too much. We were at the point where we were just making minimum payments but still charging minor purchases like groceries and fast food. How quickly that adds up.

The debt caused much stress in our marriage. We finally got to a point where bankruptcy was our only option. It took us a long time to admit we failed, but we finally spoke with a lawyer.

Our lawyer made us feel that we were not alone. My wife and I no longer blamed each other for this issue. After our final court date (just last year in 2009), we were relieved. We walked away with just our mortgage payment and car payment.

It has been 7 months and we have developed a budget and have stuck to it. There are no more frequent trips to the mall to go shopping just for the heck of it. We now pay for everything with cash or debit card.

My credit score which was once around 700 is now barely over 500. My wife's credit score decreased slightly because most credit cards were in my name only. Since the bankruptcy we were able to purchase a car and I now have a credit card with a low available balance. We needed a newer car and we thought that having payments could help rebuild my credit.

I now have a credit card that will be used once in a while and is also going to help rebuild my credit score. We were told 2 years after our final court date we could refi on our house. So we may be able to move, which we had been wanting to.

My wife is now pregnant with our third child. We feel that we now have control of our finances and if we still had the debt, there was no way we could refi, buy a new house, or add another baby to our family.

I feel that we have learned our lesson. If we don't have the cash for it, then we don't buy it. We are happy that we declared bankruptcy and we promised each other that we would never allow ourselves to be in this situation again.

Contributed by Anonymous from Illinois