I am not sure when my trek to the “dark side” of credit started. It wasn’t a single insidious event. The road to debt was slow and exceedingly painful. Thankfully, I am journeying back to credit health. There is life after bankruptcy, and I live to tell about it.
About 24 years ago, I was newly married, and our family business was in its financial heyday. Work was stressful though. Only one thing helped me unwind- shopping. I bought comfort in the way of clothing, more clothing and enough shoes for the entire Jonas Brothers Fan club.
28K of debt later and a second child on the way, credit catastrophic conditions began in earnest. I had to quit work due to the pregnancy. Credit card bills were killing us financially. A home equity loan vanquished the evil credit cards. It took us five long years to pay off the loan. I cut the cards up and swore the 12 step “pledge” to never abuse the system again. I thought I was done with credit issues.
A few years later, the family business took a sudden disastrous tumble, causing our main breadwinner (my husband) to lose income. Unfortunately, this coincided with health problems I was having. ( I had a stage 3 cancer). We lost the company, couldn’t afford health insurance, and my medical bills racked up into the hundreds of thousands of dollars in a nanosecond.
Thankfully, the cancer wasn’t terminal. However, my marriage and business were. We had used the equity in our home to “aid” a sick business, creditors attached our rental property and we owed the IRS 100K in business taxes. Oops.
With five kids, no credit, no home, no job and no husband, I began to brave the new world of life at rock bottom. That was a decade ago.
In addition to crying hysterically, I tried a number of debt desperation techniques:
· Paying random token amounts to select screaming creditors.
· Avoidance- (“If I don’t open the bills I don’t have to pay them, right?”).
· Telling creditors I had died was useful; however I wasn’t able to produce a believable death certificate.
· Answering the phone in another language proved helpful, but when Spanish speaking debt collectors became the norm, this plan too foiled. I was too old to learn Swahili.
Alas, poor credit cost me a lot in the way of interest. “Buy Here, Pay Here” cars and Pay Day Loans, gobbled money in massive gulps . I cleaned offices at night to get through college and raise my kids, but that was not enough to pay anything of consequence.
In 2005, I threw myself on the mercy of Consumer Credit Counseling. They informed me I had 144 creditors and was a candidate not for their help, but bankruptcy. I filed a Chapter 7 total liquidation. My attorney stopped counting dollar amounts at 350K and only listed creditors so he didn’t die of old age while processing my bankruptcy.
I was a professional with a career by then. I felt like the definition of “failure” in court that day.
However, bankruptcy wasn’t the credit end for me. It was a beginning.
I have since obtained a “real” car loan and a “for emergencies only” credit card, but am still struggling with re-current medical bills.( I have acquired 12k since bankruptcy). At present, I am down scaling my living conditions in an attempt to pay off medical bills, with a goal of improving my credit score and saving enough to buy a home within two years.
This is what, I suppose makes me “Mrs. Bankrupt”. I have been in the trenches of ugly debt, horrific credit scores (300 is a great bowling score, but not a favorable credit rating, in case you wonder). I have learned much about communicating with creditors, budgeting, and living within my means while raising a family. I hope to move on this path toward credit health with you and to provide some encouragement as well.
Let’s grow credit smarter together!
Leanne AKA “Mrs. Bankrupt”