Three years ago I made one of the most humbling decisions I ever made. I was in debt. I couldn’t keep my electricity or water on. I was getting calls at work, and nothing I did seemed to make even a dent in all the debt I have piled up. My student loan was deferred, my checking account overdrawn, and my life in a pile of chaos. Little did I know things would get worse when I was laid off a few months later.
But that’s in the past.
Today, I have my life back together, I am well-rested, I have money in savings that belongs to me, and I’m able to pay off my education loan. I am wiser and healthier, partly because I decided to file for bankruptcy.
Not everyone has to file for bankruptcy. Sometimes you can work either with your creditors or with a debt-counseling service to relieve a percentage of your debt, lower your interest rates or lower your monthly payments. But if your payments exceed your monthly budget or monthly income, bankruptcy may be the best option. You can go in and consult with an attorney, often without paying a fee, before beginning the process.
Even the process of talking to an attorney, gathering your statements can be stressful and grueling, but after you have your day in court, you are free to rebuild your credit.
Once you do have your day in court, be wary of companies that acquire your name and address from public records once you are discharged. Many of them know your past credit history and will try to get you back into the same debt trap, often by giving you “opportunities” to “rebuild your credit” with high-interest credit cards or automobile loans. There are simpler ways to rebuild your credit. Paying your rent on time, using a low-limit store credit card and paying your balance each month, and paying off your student loans are among these ways.
I know how stressful it can be. I must have talked to a dozen friends who had been through the same things I went through. But it can also be freeing and can put you on the path of responsibility and financial wellness. And you’ll see more friends and loved ones in your caller ID, instead of bill collectors.
Disclosure: I am participating in a blogger campaign for Las Vegas bankruptcy attorneys on behalf of Cary bankruptcy attorneys and was compensated. However, the views and opinions are my own.