Why I Created This Blog...

One of the things I've noticed when I've searched the Internet for post-bankruptcy information is that there's basically nothing out there for people who are more than just recently bankrupt. There are quite a few books, discussion groups, chat rooms, etc. for folks who are considering, or just recently filed bankruptcy. I haven't seen any stories about people who filed five, seven or even ten years ago.

I've always wondered, once people get past the initial trauma of the filing and some of the early phases of credit rebuilding, do they just forget the bankruptcy ever happened? Do people just bury the whole event and move on, or does filing bankruptcy forever change people? Do most filers get back on track, or do they continue to have financial problems that continue past their discharge date?

It seems that a common public sentiment is that many bankrupt families are somehow taking advantage of the system. People believe that individuals who file for bankruptcy were behaving irresponsibly. They were spending wastefully, running up huge credit card debt for expensive vacations, toys and fun. When they get in over their heads, they buck the system, file Chapter 7 and walk away from their responsibilities.

That's the common perception.

Although I am sure that there are a few people who used bankruptcy as an avenue to live a lifestyle beyond their means, I don't believe that to be true of most filers. Of the people I personally know who filed bankruptcy, each of them had an event that was out of their control that pushed their finances over the brink. In some cases it was enormous medical bills. In others, it was extended job loss. In each case, these families weren't living fancy, extravagant lifestyles. They were middle-class wage earners who had a financial crisis larger than their savings and their ability to earn.

One couple I know declared bankruptcy after they were hit by an uninsured motorist. Their medical bills topped $100,000 and they had no way to pay. Their own medical insurance refused to pay, claiming the responsible driver would have to cover the expenses. When the bills came due, the hospital and doctors looked to the injured couple, since the uninsured motorist had no job and no assets. Although my friends did their best to pay as much as they could, and tried to make payment arrangements, the medical bill collectors had no sympathy. They wanted all their money now. My friends couldn't pay the amount demanded, so they filed bankruptcy.

I don't know anyone who is proud they declared bankruptcy. When I went to my own hearing, the room was filled with many discouraged people. There wasn't a smile in the room. Everyone looked downcast, depressed, and ashamed that their lives had taken such a terrible turn. Many of the women were crying, and most of the men looked like they were holding in their emotions as best they could.

In my own case, although I was relieved that the collection calls and the stress of trying to pay bills each month was gone, I felt very ashamed. I felt a certain amount of peace, yes, but also a huge amount of grief. Even now, some eight years after filing, I still feel bad. I feel that there's this invisible letter "L" (loser) tattooed on my forehead. Most people can't see it, but it's still there. Although my credit reports show no late payments since my bankruptcy was filed, and all my credit scores are all above 720, I am still a deadbeat in many people's eyes. My best efforts weren't good enough and I'm forever damaged goods.

Even with very good credit scores, I am reluctant to apply for new credit for fear of being turned down. Last summer, our aging refrigerator died rather suddenly and we needed a replacement. We went to Sears, and I decided to apply for a Sears card. I thought I had a good chance of getting a card, since my bankruptcy was more than seven years old. I was turned down, and the clerk was rather gleeful about the entire thing, making enough of a show to attract the attention of nearby customers. Fortunately, my partner was able to get a card, so we were able to save ourselves 10% on the purchase and receive no-interest financing for a year.

Things seem to have improved recently. It seems that the seven-year mark might be some kind of magic number. I applied for a music store credit card recently, and was given the advertised terms, including a 12-month, no-interest account. Maybe it was luck, or maybe this company just has looser credit terms than Sears. In any case, I applied because I could do so over the Internet, and I didn't have to worry about other customers staring and saying, "Oh look, that poor slob just got turned down for instant credit!"

Although my financial situation certainly was improved by filing, I can't honestly say it was like a magic wand curing all my problems. It got rid of the overwhelming debt, but it didn't cure the problem of under-earning, and it didn't solve the problem that it's just damn expensive to live where I live. It didn't solve the problem that in order to make it, you really need to have inherited money or be a dink (dual income, no kids) so that you can spend thousands of dollars on housing. It definitely didn't make me feel better about myself or my situation. It was a solution for an untenable situation, but it had huge cost, too. I traded my debts for living in a tiny travel trailer for four years. I traded a cessation of collection calls for my self-esteem.

For those who have filed bankruptcy and are struggling with the aftermath, all I can offer is to take one day at a time. There are no miracle cures, and no magic bullets that will solve your problems. To those out there who call us deadbeats, all I can say is that I hope you never find yourself in the same situation.