Bankruptcy Doesn't Mean "The End"

Oh the places you’ll (still) go......even though you had a bankruptcy.

I guess I just have a knack for addressing stigmas when I decide to write.

And we have so many women out there writing a blog

Addressing the stigmas that involve childbearing,

Like miscarriages

And we have men and women both addressing cancer

And divorce

But I don’t often stumble across a blog that addresses

Something like bankruptcy.

So here it is.

In 2007, when I was a junior in college,

I was reading a magazine directed at young women like myself.

Specifically, I was reading an article about

Ways to be better at finances as a college student.

And I remember it clear as day-

A mini side-note on the page that suggested

Applying for a credit card that paid cash back

on ordinary purchases.

Directly across the street from my dorm was Bank of America.

Just a few days after reading the article,

I walked in and sat down with a banker

And went over my options.

I opened a checking account so that

If I used my debit card correctly and

kept it in good standing for a few months,

I would receive a bonus.

I can’t remember how much it was.

It may have been $25.

I also applied for a credit card.

I never had one before this,

And I was 20 years old.

But I was able to qualify because

My father had done so many things jointly in my name

That I already had some credit built up.

The card’s limit was $1000.

Most college girls who loved shopping as much as I do

Would have gone nuts

Bought out half of Forever 21 and maxed out the card.

I was actually terrified of it.

Because my mom and dad both stressed that

It was better to use real money

And not something I’d have to pay back.

So three years later,

After a few years of gas being $4 a gallon

And taking care of a cat for a little while

the balance finally reached a revolving $500.

And even then I still panicked.

In 2009, I met my husband.

He had just come out of the military

Honorably discharged and to be paid disability.

I had just graduated from college.

Neither of us knew what we were doing.

He had a savings and that summer we spent it

First on going out on many dates

Then on getting his apartment set up

Because he wanted to move out of his parents’ house.

Guess what happened?

He ran out of savings.

He too had credit cards,

And since the cost of having an apartment

Even with pre-owned furniture

Was bigger than the disability pay,

He charged some things.

And so it began.

From 2009 to 2017,

We would always live our best life.

It was not by any means our most glamorous

Nor was it our most lavish

But it was a good life.

I did not believe in living in a dumpy house

With five other people,

Only eating ramen

Or wearing 90’s duds from GoodWill.

He would fluctuate between living with his parents

And trying to live out on his own off and on

For five years

Up until we were married

And at times,

He would live the ramen life

But these things would come and go in seasons.

Sometimes, he was sitting at home eating for cheap

And paying bills with his money.

Other times, he was indulging himself video games

and memberships to various dojos.

When we married in 2014,

We both kept our lifestyle but jointly.

The problem was,

He was still on disability

(Though it went up when he took classes)

and I was working as a bank teller.

It was steady hours and a set rate of pay,

But it was not enough to actually live comfortably

After rent and utilities were paid.

So when I wanted a wardrobe change

Or he wanted to get braces on his teeth

Or we wanted to celebrate our anniversary,

It went on cards.

At this point, as our credit had built up,

More cards were presented to us and with higher limits.

The problem was

These things had payments.

By 2016, I was tired of the payments.

And so was he.

So we took out consolidation loans.

Now we were each making one large fixed payment

And the cards were clean again

And more of our money was ours each month.

But the wanting didn’t stop.

Never did we want anything too extravagant.

I’ve never driven a Mercedes

Or worn Guicci shoes

Or been to Las Vegas.

But even keeping my closet

full of Forever XXI

and my livingroom decorated with Marshall’s

And my stomach full of fresh organic salad instead of frozen pizza

And my husband getting to have a pet for awhile

And braces to straighten his teeth so he could feel professional

And computer parts when it was time for an upgrade

Kept us carrying revolving balances that were slowly growing higher.

It all came to a head in 2017.

After a turbulent season of marriage “storms”,

We looked at our numbers and realized that

We needed ANOTHER consolidation loan.

But this time,

The regular banks weren’t being so kind.

So we tried a credit union.

Credit unions were known for offering good loans at low rates

When other banks either said “no go” or “high APR”.

The credit union denied us too.

And that was when we knew we were in trouble.

2017 wasn’t just tough in the beginning.

It was a trial all year.

Just a few months after realizing we were stuck

Paying too much for our credit card and loan bills

I lost my job.

Two more months after that,

The second hurricane hit in less than a year

And he sat down and realized his stress levels were through the roof.

There had been so many literal and figurative storms in just one year

And though none of them had physically torn the roof off

Of our condo

They had torn the roof off of his sanity.

So he withdrew from school for medical reasons.

He needed time to think and regroup.

This meant less income for him too,

Since school is his “job” as a veteran.

He consulted a lawyer.

The advice was to stop paying credit lines.

Stop borrowing, stop paying.

Complete standstill.

In January 2018 we began the paperwork

To file for a chapter 7 bankruptcy.

But we didn’t just get there at that lawyer’s desk

That cold, rainy morning in January

Without a huge meltdown from me.

All my adult life, I’d been told that bankruptcy

Was like the worst thing that could happen to you

Second only to cancer.

I had received many talks from my parents

And from a few other people

And my takeaways from them were:

1)   If you go bankrupt, you can never afford anything again

2)   For seven years, you’re like some type of criminal bearing some type of scarlet mark on your forehead that will make every bank run the other way

3)   You can’t buy a house

4)   You can’t buy a car

5)   You can’t have a wide range of jobs

6)   You can’t even have a little credit card for emergencies

7)   And if you get married, your lack of credit will ruin your spouse too

8)   You will be doomed to live in a motel and drive a 1988 Honda Accord with a missing bumper and no air conditioner and after it breaks down, you will thumb a ride everywhere you need to go.

No, my parents never said any of that word for word.

That’s just the impression I got.

To make matters worse,

My husband’s father had quite a colorful story.

It was a chilling tale of

Owning a business, having something go awry,

Followed by two bankruptcies,

Owing restitution when my husband and his siblings were babies

And because he was a salesman of his own entrepreneurial design

He had to move them all over creation and live in hotels

For 20 years.

I was never going to live in a motel.

That was simply out of the question.

So the weeks leading up to the beginning of the end

I was having emotional breakdowns

Not unlike those of someone who has had a miscarriage.

Except my “miscarriage” was my credit...

(So in short I was probably blowing it out of proportion)

Here’s how it all really went down.

September: follow the lawyer’s advice and stop paying all loans and cards.

January: Fill out initial paperwork to file.

Go home and print out statements from every bank

And every credit card from the past several months,

Turn in a small novel made entirely of statements.

Pay over $2500 to retain this lawyer.

February: Go back and talk to the same lawyer,

go over all the numbers and answer questions.

When collectors call, refer them to lawyer.

February to May: let them work their magic.

In the meantime, live as simply and humbly as possible.

Don’t buy anything new or  large.

May: Go to downtown Jacksonville to a court hearing

that includes at least a dozen other people also doing the same thing,

go sit in front of the trustee when called, answer his four or five questions

in complete honesty.

May-July: wait for them to work it out.

Continue not buying large things or selling them.

July: receive letter in the mail that says it has been discharged.   

In just under a year,

Which went by fast,

It was all said and done.

But hey, there’s another part to the story:

How it affected us.

First, the bad news.

We had to stop using credit cards and loans in the fall,

In the midst of our loss of income

And right as the holidays are coming down the line.

We truly had to live within our means,

And the only job I could pick up on short notice

Was Target.

I had to spend the little retirement I had

To retain the lawyer and cover the gaps

From working part time.

I was trying for a job at a bank,

And most banks don’t like when a job applicant

Has bad credit,

Just like they don’t like when a potential customer

has bad credit.

My husband’s car was totaled and we only had

The money from the insurance

To buy a new one,

No hope for a car loan

With this whole thing pending

So he had to settle for a clunker.

Now the good news.

We couldn’t use our cards anymore

But we also didn’t have to pay them.

It freed up a few hundred dollars every month.

In April, I was hired as a teller

By the one bank in the area

That did not worry itself with applicant credit checks.

It has proved to be a much better job

Than the one I had before.

In May, when we got tired

Of my husband’s temporary clunker

Giving us trouble

We made a few calls and found out

You can get special financing for a new car.

Within reason.

It costs us nearly twice what a car payment

Should be with good credit

But we have a brand-new Corolla

That is ours

And I have never owned a brand-new car

Before now.

Having low incomes and

no other means to get extra cash flow

means I qualified for free health insurance,

which made having a pregnancy and a baby

a breeze.

I only owe a minimal amount for everything now.

But probably the biggest positive affect it had

Was teaching me to stop wanting so much.

Like I said before,

I never expected the Guicci and Mercedes life.

I wasn’t born with a silver spoon in my mouth

I don’t know what it’s like to have real diamonds

Anywhere other than the wedding rings

Or to fly first class.

I came from a middle class situation.

But I still came to expect more comforts

Than I really needed.

I had one year of wearing older clothes

And buying second-hand everything

And eating well but shopping based on

Religiously studying a weekly ad

And accepting freebies from the government

That I had always thought I was too good for

And learning to say no to going out for an unbudgeted meal

Not going out for a beer

Not having a summer vacation but

Making the most of getting sent out of town

For work training

And being down to my last few dollars by payday...

It all taught me a new frugality

I didn’t know I could manage.

But I did it.

We did it.

So now to debunk the myths

That I taught myself about bankruptcy.

1)   If you go bankrupt, you can never afford anything again

Once you stop paying your loans, you have freed funds to afford food and gas. Being able to afford more beyond that is entirely up to your perserverance with your career and then your savvy to not overspend.

2)    For seven years, you’re like some type of criminal bearing some type of scarlet mark on your forehead that will make every bank run the other way

It is true that many institutions will tell you to come back later, but it is not necessarily seven years. A Second-chance secured credit can be acquired while this is going down. The bank I work for would be able to consider me for a loan when it’s been one full year since the discharge. If you can work these second-chance financing opportunities and pay them on time, you can get a regular lower-interest one within a year or two.

3)    You can’t buy a house

My husband gets a VA home loan. He was told that when the bankruptcy has been discharged for two years, he can use it.

4)    You can’t buy a car

We special-financed a Corolla while the bankruptcy was still going through.

Its rate is high and so its payment is high, but it is ours to keep. It won’t be repossessed unless we stop paying for it.

5)    You can’t have a wide range of jobs

There are some occupations that won’t hire someone with a bankruptcy because it is a liability. Many banks avoid that person because of the concern that this individual will steal to pay for their needs since their credit is gone. But there are just as many companies that don’t check or don’t care. And they are good companies not just some retail stores or fast food. The key is perserverance.

6)    You can’t even have a little credit card for emergencies

If you can put down $250-$700 on a special savings account, most banks will turn around and give you a credit card for that same limit. If you can manage it well and pay it on time for a year, you can get a standard card that doesn’t require a secured savings account.

7)    And if you get married, your lack of credit will ruin your spouse too

Well, I was already married and we filed together, but for individuals who do have bad credit, there’s good news. Some property management companies will not rent to anyone with a bankruptcy, but some will if there’s another person co-signing with good credit. The same thing can happen with getting a home loan or other types of loans. If one person has good credit, it offsets the one with the low score. The trick is perserverance. Don’t get defeated when the first two places turn you down.

8)   You will be doomed to live in a motel and drive a 1988 Honda Accord with a missing bumper and no air conditioner and after it breaks down, you will thumb a ride everywhere you need to go. This was just some crazy scenario conjured up by a person with a wild imagination. Me.

Case and point: You can still live a good life and be totally normal.