Last week I was reading the comments section on another personal finance blog and my heart sank. In fact, I started to have the fight or flight response: rapid fire heart beats, shortness of breath, sweaty palms, racing mind. Surely a nerve had been struck.
A very well respected blogger left a comment about bankruptcy. She had overheard someone “joking” about it in passing and she “just kept walking”….making judgmental thoughts the whole time.
It was then followed up with a comment from the original blogger. Something along the lines of “I. Hate. That.” or some other very punctuated comment along the lines of people shirking responsibility.
Back to my racing heart: my ire was drawn and I really wanted to jump in and make some great statement but it wasn’t the place or time. The post wasn’t even about bankruptcy– it was about the sadness and confusion of petty theft. My issue wasn’t so much as their opinions expressed (it’s their right to do so, after all) as it was the fact that it made the issue of bankruptcy seem so black & white, when there lies so much in between.
Bankruptcy: An Abbreviated History
Bankruptcy in some form has been around since civilization began: In ancient Greece, debtors and their families were enslaved until the debts were considered paid. In 16th Century England, Henry VIII created debtor’s prisons and was known to perform executions due to these crimes. Prior to that in The Old Testament (Deut. 15:1), Moses said “At the end of every seven years, you shall grant a remission of debts.”
Thankfully, during the 19th Century, the United States revised, enacted, and repealed bankruptcy laws until they settled on the law that still governs us now: The Bankruptcy Reform Act of 1979, which seeks to rehabilitate or reorganize debtors. This was, of course, amended in 2005 with Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 which requires a few more hoops to jump through.
There are things in life that shape you, give you perspective and make you the person you are. Frequently, we like to think it is, and should only be, the good things in life that make you who you are. The fun, happy moments in life. But we know that isn’t real. Crappy things happen. Sometimes, you’re the one that made them happen. Then those things shape you as well. Many times for the better.
Wanting a Clean Slate
It was January of 2008. Michael had been at work and we had been arguing about money. Pretty much every single night. I was trying to work part-time as a substitute teacher and at Starbucks so that I could stay home with our son. We had arguments about our sons shoes: he had extra wide, chubby baby feet and could only find him shoes at The Expensive Shoe Store because Target doesn’t carry that size. He was growing like a weed and didn’t have the good fortune of hand-me-downs. Plus, I had the most unfortunate case of i want to buy my baby all the cute clothes syndrome that new mama’s succumb to. We had arguments about grocery shopping. We had arguments about childcare: no family members were around to help, and our sitter situation was… sketchy. She’d show up late and it was hard to be on time without timely childcare. We’d argue about our own needs. We’d argue about our car situation as it was constantly breaking down. We thought we were making a sound financial decision in buying a used car! We had deferred our student loans as long as possible. Bills were piled up and many were being paid late regularly– taking the payment from one bill, to use for a different bill. Paying half our mortgage so that we could pay for heat. Our finances were a like a derailed run away train. We tried, but couldn’t get a hold of our financial struggles.
Finally, I did some research and called a local bankruptcy attorney. I arranged a meeting and Michael wasn’t on board. It wasn’t how we were raised, he’d said. It felt like cheating. I agreed, it did. It wasn’t how we planned things would go. There were tears. Many of them. There was more arguing. There was a lot of anger and swearing at our mistakes. There was a lot of reflection. It was a difficult and hard decision. It wasn’t how we planned things would go.
That is my point: Bankruptcy isn’t how people plan for things to go. It isn’t the dream of each and every couple, standing on the altar on their wedding day: hey, by the way, I think it would be absolutely friggin’ amazing if we could declare bankruptcy sometime in our marriage.
It’s an ego-crushing, soul-sucking, bottom of the barrel, scraped off the sidewalk like road-kill (squashed by consumerism) process that also is a salve to all of those things: it provides emotional, and physical healing. A clean financial slate (though we’re still in a form of debtor’s prison) and ended the near constant arguing that had a stranglehold on our marriage and was leading us, inevitably, to a very unhappy place and quite possibly, divorce.
We were pretty secretive about our financial missteps for a while, always trying to uphold the idea that we had it all under control. We joked about it with each other as a coping mechanism trying to bring some brevity to what is a very serious and scary situation. In that scary spot, for months, we only had each other to lean on to get through that tough time; who was talking about bankruptcy? Even the great old internet only had negative things to say. No one wants to admit they’ve gone through it. (For the record: Donald Trump hasn’t, his businesses have.)
Going to Court
A lovely spring day in April we had to go to court. We asked my parents to watch our son. They asked where we were going and I was pretty vague. Our hiding and scheming wasn’t invisible to our closest family: they thought we were in therapy. Their concern for our son and family was so great we ended up sharing with them what we were going through. While having some support was great, it was also difficult because all at once, our family knew about our financial mistakes and we began to be scrutinized and criticized.
Court was terrifying. We were both nervous. The entire drive we chatted about what we’d do differently. How the next 7 years might look until we were released from our “debtor’s prison” (the black mark on our credit report). We daydreamed and told ourselves we’d learn from our mistakes. We would set up a card eventually for emergency’s until we had an emergency savings account. We would never use credit for anything. Honestly, our “court” took place in a conference room of sorts. The judge had the right to ask us questions about our debts. He didn’t. I think he may have asked “How are you doing today?” All I can remember is him doing some stamping something, signing something, and saying, “You’re all set.” And we walked away. It was over… well almost.
Life After Bankruptcy
After we declared, I became the biggest proponent for bankruptcy ever. I still am. There just isn’t enough life to live and doing it with massive debts over your head when you have a choice not to have them over your head seems like the better path to take. 7 years goes by pretty quickly. A lot of living can be done in 7 years!
We’ve come together to figure out how and what we spend our money on. We were able to consider growing our family (and found ourselves expecting our second child, a girl). We were able to buy a car. We’ve been able to save money. We started to rebuild our credit a year later and have been working to restore it to a healthy number.
We learned that “never say never” is also applicable in the post bankruptcy years, not just parenting. We swore we’d never have credit cards again. We do. We are acutely aware of them.
The bankruptcy didn’t remove our student loan debts, of course, so we still have those. And life offers happy and unexpected surprises….sometimes in the form of a little bundle of boy.
Our 7 year mark is coming up soon. I can’t believe how quickly 7 years have passed. I can’t believe how much life we’ve lived and how much happiness we’ve had in spite of being in debtor’s prison.