Thursday, December 27, 2012

LIFE LIST: $35,000 Advice

I have a confession...I'm sure you've already guessed what it know...from the title. Seven years ago I filed bankruptcy. I am telling you this because it is one of my LIFE LIST goals to have a perfect credit score one day. My bankruptcy finally reaching the end of its sentence served is a major step towards improving my credit score. Since this is such a depressing, Debbie Downer post I will try to fill it with light hearted quotes and pictures of overweight cats, because obese cats seem to make things seem less serious.  Filing bankruptcy happened a few short months after I got married, I filed single, it had nothing to with my husband and it was all my own personal debt. The amount taken to court was over $30,000. I was so ashamed. I wish I could say that I regret it but at that time I had no other option. I don't  really have the luxury to regret it.

"Bankruptcy stared me in the face, but one thought kept me calm;
 soon I’d be too poor to need an anti-theft alarm"

 I did have a lot of credit card debt...maybe $10,000 but it was not a problem. I made my payments every month, I used my cards a lot but I would make giant payments- regularly sending $1,000 payments to my Citicard. All my payments were always on time. Then I was fired from my job 3 weeks before my wedding. Every penny was going towards the wedding, I already had made commitments and I had to pay these businesses for their services- it was too late to cancel anything. From there it spun out of control and within just a few months my debt rose from around $12,000 to $35,000 due to fees and interest. This was before the U.S. economy really took a nose dive and the creditors were NOT willing to work with me in any way. They wouldn't lower my payments or interest. Now I think credit card companies are willing to be flexible with people and will do what it takes to help them, even if it is purely driven by greed.

I tried to work with debt consolidation companies- BIG MISTAKE, this made things much worse and ended up costing me a TON of money. Filing bankruptcy was not something I wanted to do at 22 years old but I simply had no other options. I was working at two very low paying jobs and was unable to find anything else at that time. The moment I stopped making my regular payments with my attempt to use a 'consolidation' company my credit card balances spiraled out of control. Two thirds of my debt filed in bankruptcy accumulated in less than six months. How is this possible? Well, a 29% interest rate on a $10,000 balance and outrageous fees. Any time I made a payment it literally just went towards a new added fee. It's changed now, I believe the law is that an assessed late fee can be no more than $28 but back then it was triple that - maybe even more.

I knew my credit was going to struggle during the 7 year period until the chapter 11 was lifted from my credit report, BUT 7 years ago I really was so uneducated about my credit score and how SIGNIFICANTLY it effects your life. If you have a crap credit score- you are screwed! This has been a battle for me, it is like trying to walk up an ascending escalator -it is a massive struggle to get to the top. When you have a bad credit score, you obviously cannot expect to get much but also when you have a bad credit score you are charged the absolute highest fees and interest imaginable. Things you could never even imagine....the past 7 years were filled with challenges, obstacles, and stressful moments. Life revolves your credit score-if you don't believe me then you've never had problems with your credit.

"Most people work just hard enough not to get fired and get paid just enough money not to quit."

I knew it would be a LONG time before my credit score would start climbing back up to a respectable range and I have been waiting, waiting, waiting for August 2012. Then one day in October this year it dawned on me- Oh my gosh- IT'S OVER- IT WAS OVER 2 MONTHS AGO AND I DIDN'T EVEN REALIZE IT! What a relief, what a weight off my shoulders, it's done, it's over with, I don't have to think about it anymore or deal with it any longer. To say that I am overjoyed is an understatement, I feel like I have served my prison sentence, learned a lot of lessons and now can start moving UP!

"I made my money the old fashioned way. I was very nice to a wealthy relative right before he died"- Malcolm Forbes

I want to be clear in case this is something you are considering-this is not the easy way out. No I did not have to pay that money back but this caused an avalanche in other financial hardships which NO DOUBT has accumulated at least what I had owed, if not more. If this is something you are thinking about I would strongly urge you to call debtors and beg them ask if there's even a temporary payment program you can get involved in first, and them that you are considering bankruptcy. If they hear that then they'll start coming up with ways to help you. But if you're like me and didn't have a choice due to lack of financial income then just know it's not the worst thing in the world, life goes on, and some times you just have to do what you have to do.

In my opinion the crux of the problem is that people don't talk about money. I am so disgusted by my former ignorance about credit/credit scores/credit reports/savings, but I just didn't know, I didn't even know enough to learn about these things. I wish someone would have talked to me about me about money, I think schools MUST add a realistic credit class to their curriculum. So whenever I think about things I 'wish' I would have known I'm going to pass it along. I hate watching people make similar mistakes with their mo.ney that I made but you'll lose friends real quick the moment you start judging their monetary lifestyle. So there you go, my $35,000 dollars worth of gift to you for free.


  1. You are an amazingly honest person, and so kind to think of others out there struggling. Your 35,000 dollar advice is a great gift to post on your blog, I am sure it will help many.

    1. Wow, thank you! Well I know I certainly learn from others mistakes so I hope someone can learn from mine! I want something good to come from everything, even the really shitty stuff!

  2. Am glad that your bankruptcy is over and don't doubt for one minute that it is not glamorous or an easy way out. I appreciate that people usually take it as a last option and that you do struggle for a long time after.

    Although it was a stressful and awful time, it sounds like it was a great wake up call for you and at least now you have learnt a lot of lessons and can embed these in Zeeva too. Sounds like a lot of it was done to naivety, in that you tried to help yourself, but there were some dodgy companies out there who just made the situation worse.

    I was fortunate in some ways to be brought up very poor, so i learnt a lot about money early on and how to get the best from it. I see people all the time though who don't think of it ever running out or what would happen if they lost their job.

    An inspirational and helpful post.x

    1. Omg yes! There are so many things that we went to ardently Instill in Zeeva and being financially responsible is one of the big ones! We've actually made a decision to postpone our Disney trip a few months do we can pay off some more bills...and my mom said " oh everyone's in debt- I wouldn't worry about it" I thought ' mom that's terrible!!! It's because of her outlook on money that I've had so many problems!!!


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