Bankruptcy can be more than just a chance for you to get your debts under control. If you make the most of the experience, it can teach you lessons that will improve your financial stability for the rest of your life.
I had a really nice conversation with Carol yesterday. Carol is a Chapter 13 client of mine who is close to successfully completing her Chapter 13 bankruptcy. She and her husband came to me five years ago overwhelmed by their debt. The monthly minimums on their credit cards were $1,250.00 and they could only realistically afford paying around $500.00 toward credit card debt. That made a Chapter 13 bankruptcy a perfect solution for them. The Chapter 13 allowed them to pay what they could afford toward the credit card debt for the five years of the bankruptcy and have the rest of the credit card debt forgiven upon successful completion of the case.
Carol and her husband faithfully made the Chapter 13 payments for five years and will be done with their bankruptcy, and their credit card debt, in a few short weeks. While this is a great enough story on its own, it’s the changes that Carol and her husband have made over these five years that is really the best part of their story.
Carol and her husband decided to make the most of their bankruptcy experience and make some simple changes that will go a long way to help prevent them from ever getting into debt again. Their first step was to sit down and take a look at their finances. Where was all of their money really going? This enabled them to create a budget, which deterred them from spending more than they had and encouraged saving for extraordinary expenses such as car repairs and home repairs. They put their budget into a spreadsheet and enter their spending each month in order to make sure that they are staying on track. They got used to living with the budget and not relying on credit to buy things.
Carol reports that she and her husband still use the spreadsheet to keep a close eye on their finances and that they have been able to pay bills a little bit ahead, whereas before the bankruptcy, they were consistently paying things late. They are excited to start rebuilding their credit after the bankruptcy is over and continuing to handle their finances responsibly.
Instead of looking at the bankruptcy as something negative, or not taking the process seriously, Carol and her husband used the bankruptcy as a chance to learn important lessons and empower themselves for the future. Even though they could experience financial hardships in the future due to things outside of their control like job loss or illness, they have put themselves in the best position possible moving forward.
If you are struggling to make ends meet and have accumulated debt, give Steidl & Steinberg a call. Not only can we explain how a bankruptcy can get your debt under control, but if you make the most of the situation, you could possibly learn some techniques that will change your financial life forever.