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Tuesday, January 10, 2012

When You Have No Choice But To Claim Bankruptcy

When my children were younger, I sometimes worked three jobs while I attended school full time, but the money I made from my jobs came nowhere close to matching my expenses. If my income and my debt had been running a race, debt would have won by a hundred laps. At one point I had to speak with a financial counselor because the hole I was digging for myself by running in place for so long was so deep I couldn't find a way out. I was using my Discover card to make payments on my Sears card, my other credit cards, food, and other household expenses. 

I was not one to purchase clothing, shoes, and jewelry for myself (I hate shopping) – I spent money on clothing and shoes for the kids only at the beginning of each school year. But the challenge of trying to pay the mortgage, heat, electricity, water, sewer, insurance, food, gas for the car, and clothing for the kids – month by month – caused the mountain of debt before me to loom so large, it practically devoured me.

After looking at my income to debt ratio, a financial counselor told me that I had two choices – I could either find three full-time jobs or I could claim bankruptcy. The thought of having to claim bankruptcy depressed me. I felt that I had incurred the debt; therefore, I should be responsible for the debt.

I went home and called all of my creditors to see if they would work with me to lower my payments. Discover and Sears both refused, but I was able to lower the interest rate on one other credit card. My debt still exceeded my income by so much that I couldn't afford to pay my electric and gas bills. The bank that held my school loans offered to consolidate my loans into one bill, but overall, I was still so deeply in debt, the realization that if I kept paying the bills only when I could afford to pay them would result in me eventually losing my car and my home. It was only a matter of time before the stress of knowing I could never catch up would bury me.

Having lunch with a friend one afternoon, I related to my friend the stress I was feeling about my financial woes and I explained the horror of not being able to pay my creditors. She pointed to my refrigerator. "How much money do you think you've paid for that refrigerator so far?" 

She had made her point. Over the years, all of the interest alone had pushed the cost of the refrigerator to more than quadruple its original price. "Believe me," she went on, "you've paid for that refrigerator and the kids' clothes many times over." 

I explained to her that I was embarrassed to claim bankruptcy, but I could see no other way out of my dilemma. She related to me that she had claimed bankruptcy a couple of years before. I didn't want to admit that I was running out of options, but I knew that I was. She reminded me that I still had two choices, and that if I wanted to find three jobs and leave three teenagers home alone 24 hours each day, I'd have to learn how stay awake without ever sleeping. The decision not to claim bankruptcy had become impossible.

Working 24 hours a day just to pay the bills would mean that I would spend no time at all with my children. Working 24 hours a day also meant that I could never sleep; nobody can stay awake 24 hours a day 5 days a week. So I did what I had to do – I used my Discover card to pay a bankruptcy attorney the fees to file my bankruptcy claim. 

Claiming bankruptcy didn't wipe out all of my debt though. In fact, I still retained the mortgage payment and both school loans. Yes, I felt the repercussions for claiming bankruptcy – an immediate sense of failure and a crazy fear that I would never be in a position to save money. But I also felt relieved because I would receive no more credit card bills. 

The hardest part about claiming bankruptcy was the guilt I felt over not paying my bills, and I honestly believe that if credit card companies didn't charge so much interest, a lot of hardworking people wouldn't have to claim bankruptcy so often. 

If you are one of those people who find yourself in the same position, if you're not abusing your credit cards by purchasing frivolous items, and if you live in Nebraska, click Nebraska Bankruptcy Lawyer to talk to a lawyer about claiming bankruptcy. 

Don't be embarrassed about contacting a bankruptcy attorney, but don't allow yourself to get into the same situation once your bankruptcy is over. Several months after my bankruptcy hearing, I started receiving offers to open more credit cards. Though I waited several years to accept one of those offers, I never again used a credit card if I couldn't pay it off the following day (I used it just to help my credit rating). 

One bankruptcy per life is enough!

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