So what really happens post-bankruptcy? This past month I asked my former clients to submit stories of what their lives look like after filing bankruptcy. I didn’t ask them to answer specific questions, but it’s interesting to note that their responses answer some of the questions people considering bankruptcy often ask. Note: names/initials/location used per client permission.
What makes one go bankrupt?
We’d had our home for 20 years, and because of the change in the economy, I had lost my job, no one was hiring, and our home was underwater. We’d been living on our credit cards for several months, hoping the economy would turn around, but it just wouldn’t. My husband had health issues and had to be off work for several months, compounding our problems.
(MT & MM – Concord)
We were dealt a devastating blow financially. My wife and I were laid off almost at the same time. With no jobs in sight, we quickly went through our savings and credit accounts. Something happens to a person that has been independent all their lives, to have to accept a handout, but having the great burden (that bankruptcy court provides) taken off our backs was crucial for us to be able to step back, take a deep breath, and plan our next step,(plan B, if You will).
(Richard – Livermore)
Will I ever be able to rebuild credit?
Been building credit and enjoying taking small but intentional steps: by balancing applying and receiving and responsibly using credit cards (each are unsecured debt cards); by applying for and receiving a small car loan (for a limited time since the interest rate is high) to purchase a "dream car" of mine, a 2-seater classic convertible; by saving a little and investing a little and donating a little, have been able to bring my score to 760+ in 18 months. Everything is a constant check and balance now.
(A – Livermore; discharge in 2013)
My finances are great now. I have a great job, stable home life and my credit I have been building since my bk. I pulled my credit and not sure how long it has been but my score is 680.
(Michelle – Livermore; discharge in 2011)
Was fun inventorying the changes over the last year. Since last summer, I now have a job, started a new business, have a boyfriend, and have a credit card (where they just increased my limit)!!
(Holly – Walnut Creek; discharge in 2013)
Will I ever be able to buy a house?
I am very excited to tell you that I bought my very first house a year and a half ago. This year I refinanced my house and was able to pay off my car and do some remodeling. None of this would have been possible if it wasn't for you.
(Katrina – Fremont; discharge in 2010)
Since then I’ve gotten married, bought a new car (yes, my name is on the loan) and am now looking for a house and enjoying a credit score that’s better now than when I filed. Now I have made sure not to put myself in that situation again by saving and using credit cards sparingly.
(Ruthann – Modesto; discharge in 2012)
What else has filing bankruptcy given you that you didn’t have before?
Since filing for bankruptcy, I've been able to focus more on the things that make me happy. Without that weight, it's allowed me to launch a successful full time photography and cinematography studio. I've also gotten married since then and has allowed us to start our lives fresh and we look forward to having children in the very near future.
(Richard – Los Angeles)
I have made enough money to start saving a bit, as well as enjoying a family vacation. It's given me confidence and some job experience under my belt. I feel optimistic about the future and not bogged down by debt, headaches and problems.
(Tina - Hercules)
Also, a huge unforeseen benefit of financial freedom has been the freedom to move from one job company to another when it was needed; huge unexpected freedom! Lastly, an additional ultimate future milestone is to bring to fruition a couple of part-time business ideas.
(A – Livermore)
We are the happiest that We have been in a long, long time. You truly did, give us Financial Peace of Mind.
(Richard – Livermore)
Are the circumstances that lead to bankruptcy devastating? Undoubtedly. Is there life after bankruptcy? Yes, what you make of it. And for these clients I have an immense sense of respect and pride that they have been able to move the past challenges and rebuild. I look forward to providing the same opportunity to any of you out there reading this wondering what might happen after a bankruptcy.