Reprint of article from July 2003
I just got off the phone with a friend. She’s decided to file bankruptcy.
This was a very long road for her. Like other friends, she’s a very moral person. In our generation, bankruptcy is not something we take lightly. It’s not just a casual discarding of inconvenient debts and frivolous charges. It’s a measure of failure. Even the thought of it darkens the air around us. There’s a heavy weight pressing down our shoulders, the pit of our stomachs. And it’s not just letting ourselves down. It’s also about letting other people, our creditors, down, too.
I’ve taken many people down this road. Some skipped blithely along, rejoicing in the abdication of all responsibilities. Most, though, resisted, and clung to their principles. With bloody, scraped fingers and toes, they scrabbled futilely, as they were dragged by the hair to the inevitable destination.
Every single one of those people is fully healed. And happy. And totally relieved. Of the burden. And the guilt they carried along with the debt. And the guilt of the bankruptcy.
No, it’s not a pretty thing to have to see. Or to go through. Watching honorable people, people with great dignity, collapse.
The reality is – as this friend said, she had paid $36,000 over the last 4 years – and reduced her debt by $5,000. No, not all of that is interest. Often, much of it results from not being able to earn the money you need during those stressful times, and having to dip into loans to get by.
A great deal of it is the penalties and interest on tax debt. And trying to get an offer in compromise today is more difficult than it has been in five years.
Like many people, she tried CCCS – but some creditors refused to cooperate – and continued to hound her. Regardless, her credit was shot. She had to screen her calls.
I saw one man, many years ago, earn hundreds of thousands of dollars each year, yet kept getting deeper and deeper into debt, paying down old bills. It took him over 5 years to decide to file bankruptcy and start over. His head is clear.
Finally I realized something. What is the point of struggling so hard to keep getting further behind? Your credit is already ruined. If you simply let go, you could start all over. You wouldn’t even need to earn all that much just to meet your current, diminished lifestyles.
You could finally take a breath.
So, today, I am telling you – look over your financial situation. If you are struggling like this, perhaps it’s time to give yourself permission to reclaim your financial independence.
It’s not the answer for everyone. And, still, don’t take it lightly.