The process of going bankrupt…

This is the type of post when I wonder should I write it or not? While I am a fairly open book on my blog and in real life as I have said before even I have my limits to what I will share, but in the past few days as I prepared for the Spousal Unit and I to meet with an attorney about our financial situation, I realized a few things that I suspect could be useful to someone else out there.

In the United States generally speaking when someone hears the word bankruptcy it strikes fear in their hearts, and some underlying assumptions that if someone files bankruptcy clearly they were a poor money manager. After all if one files bankruptcy clearly they were using credit cards to fund a lavish lifestyle! Turns out though that statistically what really brings folks to the brink of bankruptcy is job loss, illness, and the type of shit that frankly is hard to avoid.

A few weeks ago, I had started calculating out debts, but this weekend I had to finish in preparation for our meeting with attorney #1 yesterday. While the end number scared me, it was when I broke down the amounts I realized oh! Drum roll, our total debt load is….a whopping $243,560.52! Almost half of that are my student loans, ponder that for second. Needless to say like many I do think the education bubble is coming and coming soon. The other parts of our debt broke down to back taxes from the early years of the Spousal Unit’s self employment when to be honest we didn’t have a handle on managing the ebbs and flow of self employment. The remaining debt broke down to credit cards and medical bills. Honestly, I was surprised at the number of medical bills I had, a few larger ones but a great deal of smaller ones, things that weren’t covered by our paltry insurance plan. Yet they start adding up and once again I am reminded of why ultimately we need true health insurance reform in this country.

I was also surprised to learn that I haven’t used a credit card since 2007; I had not realized it had been that long as was the attorney that we met with since most people who end up in her office are still struggling to wean themselves off the demon cards. In my case when I lost my teaching job in 2007, I stopped in an attempt to try and pay them off but it never quite happened though I simply cut the cards up and never looked back. Currently the man keeps one card for his business and my employer does provide me with one for work stuff, other than that we are cash and carry or shall I say debit and carry folks. That said, looking at our files we realized there were a fair number of debts we had made substantial progress on but sadly life happens.

While the process of meeting with a bankruptcy attorney is up there as far as nerve wracking shit, I will say that going in prepared with everything helps. It also seems to help that I can clearly identify what happens that keeps us from getting ahead. In the past decade as we uprooted ourselves to move 1100 miles away we lost our ability to create a nest egg and inevitably when shit happens, such as job loss, client loss in the case of the hubby or even the illness and death of my mother when I helped my folks out we had no true reserves. I am mentioning this because I know some of the modern day zealots of simple living downplay the need for a rainy day fund of even insurance and let me tell you having lived this way for the past decade, I say no. In almost every instance my financial crises could have been avoided if I had had a stash of money to tap into and replenish when times got better.

I must admit that in recent years my decision to work part time rather than full time has not helped since a full time job almost certainly would have come with some type of health insurance but I can only look ahead at this point. So off I go to prepare to meet with attorney #2 today and figure out which chapter of the bankruptcy code would best work for us. Right now we are meeting with attorneys and weighing our options as how to best to deal with this debt and get to the point we can move on and start saving for the future.

  1. May 18, 2011
  2. May 18, 2011
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