"Divorce and Bankruptcy"

Getting Out of Debt Stories

My story began with my marriage to my then wife in 2003. I had managed to save about $100,000 at that point through dollar-cost averaging into a mutual fund. I had a steady job, and did my best to progress at work, eventually taking a management position in 2005.

In the meantime, my wife was dabbling in online businesses and at her insistence I invested in some of those, in addition to other ongoing expenses (house and car, among others) that were startlingly large relative to our sole income (mine).

I made a strategic error in allowing my wife to use my mutual fund savings for many of her business ideas...ahem...schemes. In 2007 I invested, via a signature loan and a personal credit card, into a business with my wife's dad and uncle. That amount was in excess of $50,000. I had ownership in the business and it eventually provided a small income for me.

However, my partners and I had a falling out for a number of reasons and that relationship ended, and they refused to pay the debt owed to me.

I was laid off in May 2009 from my main job with no notice, no severance pay, no pay due, three kids, a mortgage and a wife that did not earn any income.

I cashed out what I had in my 401K but that only lasted a few months and we immediately got behind in our mortgage and vehicle payments. I voluntarily repo'd the car, let the house go to the bank after the bank refused to refinance me, yet still had $125,000 in personal debt due to the signature loan and several credit cards I had used to cover expenses due to lack of income. The job market was horrible at that time, as many people know.

I divorced and filed for chapter 7 bankruptcy virtually simultaneously in late 2009. Was this the American nightmare?

Well, things have gotten a lot better in the past 3-plus years. I live in an apartment with my fiance and am self-employed, though I do earn a part-time income working for a local retail store, my time is largely my own, and I actually have a couple of credit cards for emergencies.

I have used them sparingly and paid them off quickly when I did. We shop at savings clubs, use coupons, eat at home and use gasoline sparingly, and don't travel or indulge in any luxuries. I drive an 18-year old car with 325,000 miles on it, but there's no 400-dollar-plus payment going out the door!

The truth is, I don't miss any of the suburban lifestyle or its crazy expenses that create so much stress and leave one vulnerable to the whims or misfortunes of employers who may or may not care about me or my children in any way that matters.

The cookie cutter life that so many enjoy is just not for me, and though the lesson seems hard, I have found that my relationship with my kids and God and the freedom to do what I want with my time are more than a fair trade for the big living in the burbs.

Contributed by Dan from Texas