Why I Filed Bankruptcy

I filed bankruptcy in 2009 after a rather difficult and ugly divorce. It was not something that I ever would have imagined doing if you'd asked me a year before it happened, but after a pretty serious injury and divorce, my finances spiralled out of control very quickly.

In 2005 I was employed by a pretty large construction firm managing projects for large government contracts. I was making very good money and had just got married. At this time, we were thinking about kids, and a house and began shopping around. We bought a house in Texas in 2006 and I was able to put away a lot of money, even after the mortgage, into our savings account. But after a few months we started having our difficulties and I began to realize that this marriage was not going to work out.

In late 2007 I was involved in a car accident on my way home from work. I just wasn't paying attention and ran through a red light. As a result, I wound up in the hospital with numerous broken bones, the worst of which was a shattered femur and hip. I was in treatment for almost six months before I was able to move around without too much pain or assistance, and at this point my old job had evaporated. To make things worse, my wife filed for divorce and got her attorney to get as much out of me as possible.

To make a long story short, by early 2009, the divorce and the medical problems had wiped me out. I was looking at over $80,000 in credit card debt (mostly from medical bills), a mortgage that was now upside down and I was working a desk job that paid less than half of what I was making before. I spent about 6 months struggling with the bills before I finally decided that I couldn't continue like this, and I started contacting some bankruptcy attorneys. There was no way I was going to keep paying thousands of dollars a month in interest payments to credit card companies.

I talked to two attorneys before I decided to hire a third, one who was nearby and sounded very helpful and reassuring on the phone. I went to his office to meet with him and discuss my situation. I thought for sure I would have to give up the house and move into an apartment, but it turned out that since I had no equity in the home, I could file a chapter 7, keep the house, my car and get rid of 100 percent of the credit card debt.

The court hearing was a little awkward at first, and not at all what I had expected. There were at least another 25 people in the room waiting for their hearing, and the only "official" people in there were the trustee and a few other people up at the front of the room sitting at a table. I guess I was expecting a courtroom. The whole thing took literally five minutes, and my lawyer told me I was done. A month later I got my notice of discharge. I couldn't believe how good it felt to unload that burden of debt. It was like I got my life back all of a sudden.

The funny thing is, I started getting credit card offers from the exact same companies that just got their claims against me discharged after only two months. I wasn't getting into the same situation again though, so I've been sticking to the debit card now.

All in all, the bankruptcy was not pleasant, but it really was the right move for me. If I had just continued as I was, I'd still be paying a bunch of credit card interest today, and I don't imagine I would have even made a dent yet.