Bankruptcy Stories: Here’s Mine

Buried under what feels like an insurmountable pile of debt; it’s all you can think about. You’re anxious, losing sleep at night, and constantly wondering how you’re going to dig yourself out of the hole you now find yourself in.

You feel embarrassed and ashamed you’ve gotten yourself into this position, and those feelings only grow more intense when you actually contemplate what used to be unthinkable: filing for bankruptcy.

I imagine this is how most bankruptcy stories start. I filed for bankruptcy in October 2006 and it just recently fell off my credit report, ten years later.

Read: Here’s what happened to my credit when my bankruptcy fell off.

This isn’t a shame post, a lecture, or even an argument to sway you to one position or another. It’s simply my personal bankruptcy story.

Bankruptcy lawyers will tell you that it’s not a big deal. Family and friends will likely encourage you to work through your debt without filing bankruptcy.

I’m simply going to give you my bankruptcy story as an average person that filed bankruptcy, lived through the ten year period of waiting for it to fall off my credit report, and later I’ll be writing about the pros and cons of filing bankruptcy.

Bankruptcy stories aren’t talked about

Nobody enjoys the story of how they went bankrupt. I know I don’t. And let’s be honest, the risk of telling it generally outweighs the reward. Many people may not understand what you went through. They may not agree with the principal of filing bankruptcy. Or they may simply think less of you… forever.

I’ve told very few my bankruptcy story because I was so embarrassed about it. Now I’m far more comfortable with it because it was so long ago; I don’t even feel like the same person.

I was 24-years old, living in Chicago in 2006. I didn’t know a soul, having moved a few hundred miles from my small hometown in Northern Michigan to take my first, real job out of college. Yes, a 24-year old should probably have started working a bit earlier than that, but I was a a vagabond for a few years after graduation.

For whatever reason, I quickly developed an online gambling problem. It was addicting. I would win a bunch of money, but then lose it all.

The sites I frequented accepted credit cards. And while they all stated they had maximum deposit limits, none of them adhered to it.

Before long I found myself with approximately $25,000 worth of credit card debt. Having grown up with parents that always taught me to spend less than I earned, save, and invest (among other valuable lessons about money), I felt incredibly embarrassed about my predicament.

This feeling of embarrassment was so strong that, ironically, in hindsight, it was one of the reasons I decided to file for bankruptcy.

Recognizing and trying to fix the problem

But filing for bankruptcy was not the first solution that crossed my mind. Once I recognized I had a problem I got help. I joined a support group and immediately started trying to work my way out of debt.

I had to. The idea of the debt was literally suffocating. I remember having a hard time breathing sometimes. Sleep alluded me.

I aggressively started trying to pay off the debt, and I stopped spending beyond core necessities. I was making about a $50,000 salary with some small quarterly bonuses. But the more I pushed and worked to pay down my credit card debt, the more anxious I felt.

I was forgoing a lot of things I needed to stay mentally healthy, including a social life. I obsessed about my debt, and I didn’t talk to anyone about it. It felt like I wasn’t making any progress, and I was becoming increasingly stressed. That’s the point I decided to seriously consider filing for bankruptcy.

The decision maker

At the time I had a long-time on again, off again girlfriend. We were currently trying to do the whole long distance relationship thing. It wasn’t a healthy relationship. But I didn’t realize that at the time, and I decided to finally confide in my girlfriend about my situation.

It was an ugly conversation. She didn’t believe me when I told her how it happened. In the end, she accused me of having found someone else and spending lavishly on this other woman.

I was baffled; it couldn’t be further from the truth. The one person I thought I could trust and confide in turned against me. In hindsight, this was probably the worst thing that could happen at the time.

Instead of support and understanding, I found hostility. I now felt like anyone else I might confide in would react the same way.

So I didn’t.

Instead, I immediately began Googling bankruptcy attorneys in the Chicago area.

Working with a bankruptcy attorney

The biggest thing you should be aware of when it comes to a bankruptcy attorney is that your interests are not aligned. A bankruptcy attorney makes money when she files bankruptcies.

That means they aren’t in the business of talking you out of filing for bankruptcy. In fact, it’s just the opposite. And that’s exactly what my bankruptcy attorney did with me.

I was 24. According to my bankruptcy attorney that was a huge benefit. I’m young! I have plenty of time to rebuild my credit! These were all great things my bankruptcy attorney touted.

And I ate it up.

Because I chose not to talk through my debt issues with anyone else after speaking with my girlfriend (to her credit she told me not to go through with it), I never heard counter arguments to my bankruptcy attorney’s claimed benefits. Instead, I was feeling pretty good. Heck, I was even starting to feel like filing for bankruptcy was the wise thing to do.

And it was only going to cost me $1,500.

I didn’t have $1,500.

Sadly, and quite ironically, I had to save for a few months to get the money together to file bankruptcy.

The actual day I filed for bankruptcy

The whole scene is pretty hazy by now, some ten years later. But I remember going to a courthouse, waiting my turn to enter a small room. I sat on a chair, my bankruptcy attorney next to me.

Across a small table was a man with a recording device. He said he would ask me some questions. I remember having been prepped for these questions. They all had to do with assets I might have, accounts I was including in the bankruptcy filing, and things like that.

It was intimidating, uncomfortable, and embarrassing. But it didn’t take long. I signed some papers, and walked out with my attorney. It was done; I remember feeling incredibly relieved.

Life after bankruptcy

The first thing I remember feeling after filing bankruptcy was emotional relief. I could sleep again, and I was no longer worried about my debts. But that feeling didn’t last long. It was replaced by feeling “dirty”, like a societal black sheep. I didn’t feel proud that I’d played the system to my advantage. I felt guilty for welching on my debts and ashamed for getting myself in such a place to begin with.

And that feeling seeing your credit score plummet that first time you check it, realizing you have a long road ahead… it’s quite sobering. I had to get a new bank account and start really focusing on how I was going to rebuild my credit.

I’ve had four really “rock bottom” type lows in my life. And filing bankruptcy is definitely at the top of that short list. Filing bankruptcy is not a decision that should be made lightly, and that’s exactly what I did.

Unfortunately, it’s a relatively taboo topic, and not many people share their bankruptcy stories. There are the typical pros and cons lists, but I haven’t found a good first-hand account of someone’s experience.

I hope to change that with my posts reflecting on my personal bankruptcy story and maybe it will help provide the information to others before they make their decision.