Not too long ago I found myself in the deepest, darkest place I have ever been. The market had just crashed, I was unemployed and I had over $50k of debt. In September of 2009 I found myself sitting in the waiting room of a bankruptcy office ready to sign the papers to wipe out all my debt. Ah if life was only that easy.
As a financial planner I knew the long lasting effects of declaring bankruptcy, but at 29 years old and more debt than income I didn’t see another option. I was prepared to wipe everything clean and start over, but bankruptcy doesn’t exactly work like that.
After talking with the bankruptcy councilor I decided that declaring bankruptcy was not the right option for me. I wasn’t ready to have such a long lasting mark on my credit report and decided that I got myself into this financial mess so I was going to get myself out of it.
Four reasons why bankruptcy was the best thing that ever happened to me:
Bankruptcy gave me options
If I didn’t hit rock bottom that sunny September day (oh yes I remember it like it happened yesterday) I wouldn’t have learned about the options I had to help get out of this financial distress. I thought I had to go about it alone, but the truth is there are a lot of resources out there for people who are having financial troubles.
You can talk to your bank about interest relief programs, call credit card companies to explore debt forgiveness options and talk to a councillor about how filing bankruptcy will affect your financial life for years to come. When you have all the information you can make an informed decision about what’s best for you.
I’m not sad about what happened
The day I visited the bankruptcy councillor was the day the tears stopped. Even though I was still $50k in debt and in the exact same situation that I was in the morning before my appointment I felt relived. It was nice to know that with a plan I could pay off my debt.
I thought I had no options, so to learn that today was the day I start making changes and the fact that I finally got help were a big relief.
Helped me get my financial life in order
I knew the next few years wouldn’t be easy. I had to cut expenses, get rid of credit cards, find both full time and part time jobs (extra income equals more payments) and start being disciplined with money (something I had never done in the past), but it was all going to be O.K. because I was on my way.
Taking that first step towards becoming debt free helped me learn how to properly manage money. I’ve learned how to say no because in life we can’t always get what we want, I’ve learned how savings can help you feel financially strong and I’ve learned that having multiple credit cards doesn’t make you responsible.
All this to say I learned my lesson – a $50,000 lesson – but nevertheless lesson learned.