I went bankrupt in 2012. At the time, I had over $30,000 in credit card debt. I am not a compulsive spender, nor do I live lavishly. I had simply spent more than I made, and had done so over many years, until it was out of control. Much of my credit card debt could be attributed to ordinary purchases like groceries, Christmas gifts, trips to the pharmacy, and the occasional restaurant. Although I no longer remember all the specifics, by the time I went bankrupt I believe I was making minimum monthly payments of around $850.

I resisted bankruptcy for a very long time. I would not have made the choice to go bankrupt when I did, but in late 2011, I experienced a sudden, unexpected drop in income. I stopped paying my credit card bills, and once I had missed even just a month of payments, there was no realistic way to recover.

Seeking Help

I started calling organizations that help people set up payment plans with their credit card companies. One of those organizations told me that it was beyond help, that I should go bankrupt. I called a lawyer.

I picked a nation-wide bankruptcy group. Bankruptcy seems to be most of what they do. I remember my first conversation with my lawyer. At one point in the discussion, I told the lawyer that I thought bankruptcy was a worst-case scenario. My lawyer shockingly responded, “No, it’s not.”

And then he told me that the worst-case scenario was not going bankrupt. The worst-case scenario was continuing to live with debt. Collections calls. Paying money to credit cards that would never, ever get paid down fully. Living without a savings. Living forever with a mistake that I had made, without recovery.

Bankruptcy

My greatest fear at the time was losing my house, but the lawyer assured me that I would not lose my house or car in the bankruptcy. I’m not sure if it works this way for everyone. I think if my state laws had been different, or if my house or car had been worth more, I might have been faced with a different scenario.

The process was relatively simple. Perhaps ironically, it was also expensive, but I’m glad I paid for a lawyer. The lawyer answered all my questions, and I had the peace of mind that comes with knowing it was being done right. I could have saved myself some money — maybe as much as about a thousand dollars — if I had tried to do it on my own. But I don’t regret my choice. The bankruptcy group set up a payment plan for me, and I went bankrupt just four or five months after that first phone call.

To get things started I had to send some paperwork to the law office, answer many questions, and sign some documents. The law office did everything else.

The bankruptcy occurred on a weekday in July. I went to an office not far from my home and answered questions in front of other strangers who were also there to declare bankruptcy. I don’t remember what I said; maybe I stated that I was renouncing my debt and I understood the consequences.

Until the day of the bankruptcy, I had never met anyone from the law office. All business was conducted over the phone, by mail, and with fax. A lawyer — not the one I had been working with — met me at the meeting. He coached me on what would be asked of me and how I should respond.

I had the impression that most of the people filing for bankruptcy that day were without lawyers. They had done it on their own.

What I Learned

The following year at tax time, I told my accountant that I had gone bankrupt. He smiled and told me he had once gone bankrupt. He said it was like “being financially reborn.” And it is. My life is vastly improved, just knowing that my credit card debt is gone.

And yet, not much changed. I still have a student loan, which I pay regularly. I kept the house and car, as the lawyer promised. My credit score was on a long decline at the time of my bankruptcy. The lowest it ever reached was 666. It’s up to 695 now. I now have a savings. I have a brighter future.

Looking back on the bankruptcy process, there’s not much I would do differently. I might have declared bankruptcy sooner to have gotten it out of the way earlier.

The greatest lesson I learned during the process came from that first conversation with the lawyer. Bankruptcy is not what I always imagined. It is not an excuse to incur colossal amounts of credit card debt. It is not meant to be an easy way out. Nor is it a worst-case scenario. It is simply a solution to a problem.