Is bankruptcy an option?

bankruptcy

Speaking with some authority on this subject as a discharged bankrupt from years past, I can say that it wasn’t all that it was cracked up to be. Sure, the instant pressure of debt was lifted from my weary shoulders but the sudden restrictions over the next seven years and beyond were painfully etched into my life and recorded for all to see. And without learning the consequences of spending it didn’t take me long to position myself back on the edge of the abyss of debt and the stress of juggling my finances.

Why did I go bankrupt?

I ended a failing relationship at the time and gave little thought to my finances and the painful realisation that all the credit cards, loans and store card were in my name. I was suddenly thrust into the madness of debt shuffling where I would use the credit card to buy food because the only cash I had went to the loan and store card. Before the bubble burst I made an appointment with a financial advisor who quickly encouraged me to reset my debt by declaring bankruptcy without me fully understanding the consequences I was about to endure.

Stripped of my cards, loan account and dignity I spent the next seven years joining the rent race as I lost all access to any credit and therefore no ability to secure a home loan. But it didn’t stop there. I was told that the magic number was seven. After seven years I would be discharged from bankruptcy and then able to re-join the home owner ranks. Little did I know that all bankrupts famously get their names added to a national data base for ninety nine years and available to anyone willing to pay a small fee. Despite the fact that I had good savings no bank would approve a home loan. By then I was in another relationship where only my partner could secure a suitable loan.

Almost a second time!

Fast forward a number of years and another failed relationship followed by court action to recover my lost finances into a house I didn’t own and I walked away with a small sum to at least apply to a home loan of my own, still under great difficulty might I add.. Two years later I fell for (and eventually married) a terrific woman from abroad. The trips back and forth and the five interest rate hikes over eight months began taking its toll and by the time my wife arrived in this country I was dangerously on that familiar path to disaster. By then I had a car loan which I topped up to cover two weddings here and abroad and a credit card skirting around the maximum limits.

What changed?

My wife is Filipino and over the course of time we have been together I have learned some life changing lessons about frugality and survival. In my wife’s culture there is only survival: Survival in the form of food and shelter. Anything else is a luxury and unnecessary. I then started reading books and blogs on debt reduction, budgeting, frugality and wealth. I made some big changes to my life and set myself on the road to financial freedom.

Looking back I would not have chosen the path of bankruptcy again. Knowing what I know now I would have made the changes necessary and fast forwarding to today, I would be comfortable with my financial freedom and so much farther ahead teaching others how to destroy their debt.