Yes, there is life after bankruptcy
But only if you're willing to work at it.
This is a site about recovery from bankruptcy. It's a mix of motivational stuff based on my own experiences and highly-opinionated suggestions, also based on my own experience.
I don't claim any particular expertise in things legal or financial. I'm not a lawyer, banker, financial advisor, guru, prophet, or psychic. Everything I say on this site is my own opinion, based on my own experiences and observations and those of other people I know who have gone through bankruptcy -- and nothing more. If you want authoritative information written by experts in the fields of law and finance, there are plenty of sites out there, almost all of them written by people smarter than myself.
This site's different. It's not a site for legal advice. Go find yourself a bankruptcy lawyer if you want legal advice, or visit the Bankruptcy Forum if you want to try to file for bankruptcy on your own (or if you just want to meet other good folks who are going through what you're going through). Or you can buy a book about do-it-yourself bankruptcy. There are plenty of them out there.
I'm also not a financial advisor, so if you want general financial advice, I suggest you visit a credit union. Almost all of them provide free financial education for their members, usually for free or very inexpensively. It's part of why they exist and they're pretty good at it.
The only basis I have for giving advice about recovering from bankruptcy, on the other hand, is that I've done it and continue to do it. I have some very good unsecured credit cards (including AmEx, which many consider the holy grail of recovery from bankruptcy), I just bought a new car at zero percent interest, and I have a credit score above 700 at all three major credit reporting agencies, barely six years post-discharge as of this writing. I'm also in negotiations to buy the house I'm currently renting.
So what I hope to do here something a bit different: I want to motivate people. I want to encourage visitors to get off their butts, stop being depressed, and start working on their recoveries. And the first step in that journey is a simple one:
Get over it
Yes, get over it. Most people who file for bankruptcy go through long, drawn-out periods of depression, self-doubt, and guilt. They wallow in their "failure" and shed many a tear over their financial mistakes. And that's fine -- for a while. Bankruptcy has been described as a "financial death," and a certain amount of grief is both expected and healthy.
The problem is that some people mourn about the silliest things after filing for bankruptcy, such as not being able to get approved for the latest and greatest cell phone because the carrier requires a credit check. Big deal. You can find plenty of perfectly-decent phones that will work on a prepaid cell phone plan that doesn't require a credit check or a contract. In fact, I still use prepaid because the service works just as well and costs about half what postpaid costs. Check out my page on Reclaiming Your Phone from Bill Collectors to learn more.
What it comes down to is that bankruptcy, like any other traumatic life event, comes with its share of sorrow. But there's a time to get over it. There's a time to realize that the whole purpose of bankruptcy laws is to give people a second chance -- a chance to start over and to rebuild their lives -- and that if you spend your life moping around and wallowing in self-pity, you're not taking advantage of that second chance.
In short, recovery from bankruptcy doesn't just happen. You have to make it happen -- and the first step to making it happen is to stop mourning the loss of your past, and reach out and grab the chance that has been given to you to build a new, better future.
I encourage you to reach out and embrace that chance right now. It's right there, it's yours for the asking, and no one can take it away from you except yourself. So please, stop your mourning, grieving, and crying, and begin your new financial life.
To Everything, There is a Season
I'm not a preacher, and this isn't a site about religion. But there's a passage from the Bible that's helped me through my bankruptcy and many other trials. It's from the the third chapter of Ecclesiastes, and it goes like this: "To everything there is a season, and a time for every purpose under heaven." I'm going to suggest that you memorize that verse, anyway.
Incidentally, people of my generation may recall those words from a song popularized by Pete Seeger titled Turn, Turn, Turn, the theme of which was that everything has its time and season. I'll bet many of you didn't know the words were actually came from the Bible! They convey great wisdom for those who have filed for bankruptcy, regardless of our faiths. As I mentioned earlier, bankruptcy has been called a "financial death," which indeed it is. All of your past mistakes are rolled up into a big ball and tossed in the trash. Your entire financial existence, both your successes and your failures, are wiped away.
But bankruptcy is also a new financial birth, and that's really what you need to latch on to. The past is over. Done. Finished. History. It's been put aside by the courts. And now it's a new season and a a time for a new purpose if only you can put your past aside.
A Time to Mourn
Debtors who file for bankruptcy spend a lot of time grieving over things like not being able to buy a new car because their "credit is shot," not being able to take expensive vacations, not being able to buy expensive clothes, and so forth. But when you think about it, most of us really couldn't afford those things in the first place. That's one of the reasons we got into financial trouble: We spent money on things we couldn't afford. So really, what have we lost? In most cases, only things that we never really had, anyway.
Nonetheless, the first few years after going bankrupt are often filled with reminders of the "old lives" that we enjoyed before the weight of debt made those lifestyles unsustainable. These reminders can come in many forms, such as:
- Seeing a car like the one that you used to drive passing you on the highway, while you're driving an old clunker.
- Walking past an expensive restaurant you used to enjoy, but can no longer afford.
- Watching your neighbor's kids being sent off to the same summer camp that your kids used to go to, back before you filed for bankruptcy.
- Not being able to buy all the presents you'd like to give your loved ones at Christmas, Hanukkah, Kwanzaa, Festivus, or whatever other holiday you celebrate because you have neither the cash nor the credit.
- Having to say, "No," to your child when he or she wants to go on the school ski trip, or simply wants a new bicycle or a decent pair of sneakers.
Reminders of the "good times" are everywhere.
And when these reminders happen, it's natural to be sad.
A Time to Dance
When things like this happen and you're reminded of the "old days," I suggest you take do two things:
1. Recite that verse I asked you to memorize: To every thing there is a season, A time for every purpose under heaven.
2. Remind yourself that the season for mourning has passed, and that now is the season to build your future. It's the time to dance because this is a new season in your life. It's your chance to make the right decisions, based on the hard lessons you've learned from the past. This is your chance to do thing right this time around.
By the Way, Enough With the Anger Already
Most people who file for bankruptcy go through a period of intense anger: anger at "the banks," anger at family members, anger at "the system" (whatever that is), anger at clients who never paid them if they're self-employed, anger at CEOs and shareholders who downsized their places of employment or off-shored their jobs, and anger at anyone or anything else that they blame for their financial problems, whether justifiably or not.
Look, friend, if that's what you want to do, then go for it. Enjoy your anger. Bask in your righteous indignation. Punch walls, cuss, swear, bend the ear of your shrink, clergyman, or bartender, rant about it on our anonymous bankruptcy rant page, whatever. Because you know what? You may be right. So rant on. I won't stand in your way. Hell, I'm even giving you a place to do it where your rants will be visible to everyone in the Interweb-connected world.
I spent quite a bit of time ranting myself, in fact, before I realized that it wasn't anyone any good, including myself. In the end, all the ranting and brooding does is delay our recovery and rob us of our second chance. It focuses our energies on the people and things we believe hurt us in the past, rather than on building the new futures that are available to us as a result of having gone through bankruptcy.
Besides, no one really really gives a rat's hindquarters if you're angry, least of all "the banks," who don't know you from Adam and care about you even less.
Long Story Short: You're Bankrupt
That's really what it comes down to: You're bankrupt. The things you used to have and enjoy are gone. But on the bright side, so are your debts. So now you have two choices: You can either wallow in your anger, misery and self-pity, or you can get off your butt and start rebuilding your life.
I hope you're ready to build your new future.