My first year of college was exciting and new, a chance to meet new people and broaden my horizons. It was also a chance for me to get into more debt than I could possibly imagine. By the end of my sophomore year of college I owed over $15,000 in credit card debt and had no idea of how I was ever going to pay it all back. At the time I was employed full time, but the money I earned every week was barely enough to keep me fed, in my apartment, and current on my many charge accounts.
Overwhelmed, I went to my father for advice and, after looking at all of my bills, he recommended I file for bankruptcy. When he mentioned the big ï¿½B’ word to me I felt as though I had fallen into a deep, dark, abyss. To me bankruptcy meant you were a financial failure but when I shared this opinion with my father he laughed at me. As it turned out my father filed for bankruptcy many years earlier when I was to young to understand. This shocked me because my father was, and still is, a very successful businessman.
Once I got comfortable with the idea of filing for bankruptcy my father helped me through the process. The first thing we had to do was find a good attorney. I looked on the Internet and through the yellow pages for local attorney’s that specialized in bankruptcy cases. While there were many attorneys that handled a variety of cases my father insisted we find one that specialized in bankruptcy because they would be more up to date on current laws and filing procedures.
After compiling a list I contacted 10 offices to set up consultations. Since I was young (only 19) at the time two law offices didn’t take me seriously at all, one receptionist hung up in my face. Three more seemed eager to have me agree to use their offices before even meeting me face to face, they were a bit to desperate for business in my opinion at least. So out of the ten offices contacted I ended up going to meet with five attorneys.
All of the attorney’s were very polite and seemed interested in helping me but I waited until I met with all of them before making my decisions. Since the fees associated with the filing were all similar I based my choice based on over all experience and proximity. I chose a law office that was located between my home and my college so stopping in would be convenient and after contacting the attorney I set up my initial meeting.
My attorney and I met one afternoon so that we could discuss what would be involved. I brought a list off all of my debts and copies of my W-2 forms. After a quick discussion my attorney advised me to file Chapter 7 bankruptcy which meant that based on my income and amount of money owed there was no way for me to reasonably repay my creditors. Under normal circumstances I would have been required to liquidate all of my assets to cash so that I could pay my creditor but since I did not own any thing of value I could not do that.
By filing Chapter 7 bankruptcy creditors would no longer be able to contact me regarding my debt. Any communication to me would have to be made through my attorney and I would essentially be given a ï¿½fresh start’. Had I been making more money my attorney might have insisted I file Chapter 13 bankruptcy, which would have given me three to five years to repay my debts to my creditors. Once I was better educated about bankruptcy I paid my attorney an initial deposit of $900.00 and set up another appointment for me to come back in a week with the most recent statements from the various credit card companies.
At the next appointment I arrived with every current copy of my credit card statements along with a recent pay stub. After reviewing everything my attorney advised me that he would begin the filing process and told me to have any creditors who contact me to call his office. He explained to me that once I filed the bankruptcy would stay on my credit report for up to 10 years and while I would be able to get credit again in the future I needed to remember that bankruptcy should be a one-time solution to credit problems.
True to his word my attorney filed my bankruptcy documents and once my creditors were notified (two weeks later) the majority of the collection calls and letters stopped. A date was set for me to have my 341 meeting during which I would have to talk to a trustee of the court and creditors. The idea of talking to my creditors rattled me a little bit but my attorney assured me that if they showed up (they usually don’t) they would just be verifying that my income was low and I had no assets that could be liquidated.
The meeting was held at a courthouse about 45 minutes from my home and my attorney was present representing myself and another client. The court reporter recorded the meeting, which (once I was called) took only three minutes. The trustee was very polite and even friendly to me only verifying that I understood all the paperwork that I signed and that I had accurately reported all of my incomes and debts. From there everything was finished.
Because I had no vehicles or property to sell there was nothing else for me to do. My attorney promised to follow up with me a few days later, which he did, mainly to be sure that my creditors were not trying to contact me. I paid him an additional $900.00 and received paperwork from the court about my bankruptcy being discharged two months later.
Four years later and I am well on the road to credit worthiness again. I have made a point of watching my credit reports and score and refrained from applying for any credit cards or loans. The bankruptcy was removed from my credit report early because I wrote the three major credit bureaus advising that my bankruptcy was discharged and had all debts associated with my bankruptcy removed from my credit report (they were being reported as bad debts not discharged during a bankruptcy).
I know that my case was a lucky one but I am happy I chose to file bankruptcy. At this moment my credit score is much better than my husband who has never filed and most of my friends. While occasionally I worry about any future stigma associated with filing bankruptcy in the past I would rather live with that worry than live with creditors harassing my every step. I truly recommend bankruptcy to anyone who is having extreme financial difficulty even after exhausting all of his or her options.