I have never shared this on my blog or in a public forum or anywhere ever before. For a long time, my husband was not comfortable telling people about the bad choice we had made. Then, when he finally told me I could confess it to you, I was uncertain.
I was afraid you would feel like I have been lying to you. Like I was no longer trustworthy. And you still might feel that way, but I feel prompted in my spirit to come clean and tell you about the biggest mistake we ever made… filing bankruptcy.
Reaching the decision to file bankruptcy
You know my financial story… how we were so poor and had no room in the budget for groceries and gasoline. How we were told that with our budget as it was, no judge would allow us to file for bankruptcy.
But what you don’t know, what I have never said, was that we rewrote our budget so that the judge would let the bankruptcy pass. And so, we applied for a Chapter 13 Bankruptcy.
While we were waiting for the judge to decide, we had to hide our van behind our home, locking the gate, from fear that it would be repossessed. We had to ignore phone calls from bill collectors. We cried… sobbed over the mess we had made for ourselves. I have never felt so completely broken and abandoned by God.
Our day in court
On the day of our hearing, we put our young son in his car seat, leaving our oldest child with my parents, and headed downtown. I can still feel the knot in my stomach.
Upon seeing us with a baby, a court assistant had us move to the from of the courtroom, which was filled with at least a hundred others unfortunate souls, and placed us in the seat where… criminals await their trial. She spoke with the judge and had our file put on top.
When he called our names, my husband and I stood shakily and told him that we understood and agreed to the terms of the bankruptcy, we agreed to submit monthly payments to a trustee, and it was done. We committed the next portion of our life to working for a trustee. To being a slave to our debt.
Realizing our mistake
During the first three years of our bankruptcy, we struggled to make payments to the trustee. At the same time, we carried tremendous guilt and shame. Most of our family had no idea what we had done, and we wanted to keep it that way.
While under the bankruptcy, we were not allowed to have a savings account or to make charitable contributions. We could not even tithe to our church. But we are givers and struggled with the pain of not being able to give when asked. That is why we started carrying the homeless bags in our van and why I would grow my hair to donate to Locks of Love. We started giving to others from what we had in our closets because we wanted to meet their needs. We could not give to God any other way, so we gave from what we had available.
Bankruptcy did not give us the freedom from debt that we craved. If anything, we were imprisoned by our debt more than ever.
A way out of bankruptcy
Income tax time rolled around and one benefit of being poor was the healthy tax refund we received. With a large sum of money coming into our possession, we looked over the bankruptcy agreement. The time had come to be honest with ourselves, admit our mistake, and pay penance.
We contacted our trustee and asked to be removed from bankruptcy. Our attorney thought we were crazy and even went to the courts without our permission to have the bankruptcy reinstated. So, we ended up calling the trustee again to sever the agreement.
Our debt was still there. The trustee had only made small payments to each account. Only our van had been cleared with us having possession of the title. So we used our income tax refund to negotiate with the creditors, and after one year had paid everything off.
But for grace
The past twelve years have included such painful moments, and I am not proud of anything we have faced. Only by God’s grace are we here today with full bellies and a roof over our family and paid-for cars (even though they are falling to pieces)… but we caused all of those problems as a result of our sin… trying to live beyond our means.
Our goal in life now is simple… to bring glory to God our Father and to share our story with you so that you might avoid the mistakes we have made.
But the grace of God… how amazing He is… how forgiving! We learned so much through the struggle, and just as a butterfly must struggle against the cocoon in order to fly, we have now found our wings and strive to live a life that is honoring to God.
Resources you might helpful on the journey:
Personal Bankruptcy Laws For Dummies
The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness
Thank you for bravely sharing your story. You are so right, bankruptcy makes us slaves to our debt. I appreciated your comment that you “committed the next portion of [your] life to working for the trustee.” May God continue to bless your family!
It was definitely a difficult time in our lives but we learned so much and can now share our journey with others. God always has a plan. 🙂
Thank you for sharing your story! Not only was that very brave but you show us that no one is perfect and it’s through trials like yours that we tend to grow closer to God. We were in a similar situation some years back, and God guided us through. You also shared other ways we can give. Not everyone has the funds to donate to charity. Thanks for your words of encouragement!
God bless you!
Yes, we had to get very creative when trying to find ways to still give to others, but I learned that giving doesn’t have to mean money. I love what I learned… just not necessarily how I learned it. 😉
My husband and I were in debt before we were saved. About $10,000. We contacted a credit consolidation company and through that we ended up being victims of identity theft and it put us in debt about $80,000. We went to credit counselors and they all recommended bankruptcy. They were secular of course. We filed and it will be four years this october since we got out of that debt. It was so hard to admit defeat legally. The good thing that came out of it is that we made an effort to learn the ins and outs of finances. I know what the Bible says about repaying your loans and how the borrower is a slave to the lender now as well. We also buy EVERYTHING with cash, and we live VERY simply. We are considered poor, but we have a roof over our heads, clothes on our bodies, and food to eat, so I consider us rich compared to the rest of the world. I know it must have been hard to admit this dark spot in your lives to the world. I also know that His grace is sufficient for our mistakes and I applaud your honesty! If we are not real in our blogging, what is the point? God has forgiven you, so no one else has the right to judge that. Way to go!!
Thank you for the kind words and encouragement, Laurie. So true that we must be honest and transparent as bloggers. Plus, this is so closely related to WHY I am a blogger. I can’t believe it took me this long to share it.
I am sorry that this did not end up working out for you. We also went through bankruptcy. However, for us it was a very different outcome. It was more than just a financial relief but a physical one as well – quite literally. Our home was damaged and in need of repairs far greater than any we could ever think to procure. While the appeals continued through insurance company, our home continued to deteriorate to non-inhabitable conditions and aggravating my husband’s asthma, my children’s allergies and causing causing headaches to multiple family members. We had no place to go having no family in the area. Work and church helped with food and money but there was nothing that they could do about the home. The mortgage company was not interested in “working anything out”. Chapter 7 bankruptcy was the best thing that happened. It enabled us to walk away from a very unhealthy situation. Don’t get me wrong, Chapter 7 is indeed an extreme step. However, bankruptcy is supposed to be there to help those who are indeed in the most dire of circumstances and should be a shameful thing if it is done for the right reasons. Our home was flooded and we had indeed lost everything. Insurance claims were pennies on the dollar for the damage that was inflicted. We needed a place to live and creditors would not have cared – nor were they caring about the dire situation our family was facing (medical injuries were also suffered.) When you are talking a sudden event with bills totally in tens of thousands of dollars and mounting daily through no fault of your own, one should not view bankruptcy laws as a shameful. We felt guilt-ridden making the phone call and our lawyer was stunned and stated that we had nothing to feel guilty over. The problem is that too often, bankruptcy has such bad connotations that we forget what it is actually there for and who it was meant to protect. Just like any law, they can be taken advantage of, but if anyone is in “no-way-out” circumstance, they should not feel embarrassed or ashamed to pursue this route. I am very sorry you had such a bad experience with yours, but for us it really gave us the fresh start we needed and got us out from under an impossible situation that no amount of budgeting could have solved.
I am so sorry for all you experienced and I am glad that Chapter 7 was an option for you. We had to file Chapter 13 and still had our mortgage and student loans debt. The combination of the trustee payment along with our other debt and monthly expenses was just too much.
thank you for sharing your story. Sometimes we have to go thru things in order to learn a lesson. I went thru bankruptcy, a divorce, with a 6month old son and fighting cancer all at the same time. But I survived and came out stronger for it. Yes, by the Grace of God. That was 25 years ago… now I’m very happily remarried, healthy and have 4 wonderful sons and 6 grandchildren. I am so blessed. Things happen for a reason and sometimes we don’t know why……. perhaps to receive a blessing at the end.
Such a beautiful story, JoAnn, and a wonderful example of how God can work all things together for our good!
Thank you for sharing your story! Inspirational!
Thank you, Penny, for the encouragement. 🙂
Thank you for sharing! I most appreciate your honesty, painful as it had to be to share with your readers! Sometimes we just have to admit our own culpability – as I too have recently experienced.
Thank you for your kindness, Constance. I just pray that God can encourage those who are in the midst of this through our struggles and successes.
So glad to see we are not alone & that we can do it too. Your story resonates with us because it is our story also. Very inspired to kick this debt to the curb!!