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I still remember the day as if it were yesterday. Sitting at the kitchen table, reading the newspaper, and sipping my coffee while trying to ignore the stack of unopened envelopes shoved aside on the counter. I used to love getting the mail, but now, it had become a daily dread to me. Once in awhile there was a note from a friend, but mostly it was the relentless pursuit of my creditors. Did they think I didn’t know that we were terribly behind on our payments? Or that we simply forgot to mail in a check? My husband Bill was out of work due to an injury, and the combination of his medical bills combined with the loss of wages formed a perfect storm when he was laid off due to company downsize. These were our golden years, at least, they were supposed to be. What happened, and how did we end up in this mess? It was all so blurry now, and probably why I made one of the worst decisions of my life just five minutes later.

I got up from the table to let our dog in the patio door when I overheard a soothing voice on the radio. It was a commercial advertising bankruptcy. I guess I had heard many advertisements that entire year, and while some gained my attention momentarily, I was never clear about what Bill and I should do. I mostly ignored them. This time, I finally had enough and wrote down the phone number. After all, this was “our” mess as a couple, but I was the one who paid the bills. These days, I wasn’t paying any of them. I felt the weight of our mounting credit card debts morning, noon, and night. That day I had finally had enough, and desperately wanted a way out. I wish I had lost their phone number, but unfortunately I called it before I did. This entry is about the four things I wish they had told me that I only understood when it was too late. I hope that if you’re in a similar situation you will take these to heart.

  1. Filing Bankruptcy Isn’t an Instant “Clean Slate”

When I spoke to the kind person at the bankruptcy firm that day, they spoke of “wiping the slate clean” financially. This obviously appealed to me, and was exactly what I needed to hear. I glanced over at the pile of bills on the counter and envisioned pushing them right into the garbage can once I paid the filing fee. Could they all go away that fast? When I said, “yes” to bankruptcy that day, I envisioned a magic button on the other end of the phone. And while the woman did enter our information into her database, this was not the end of our financial stress but just another starting point. I learned that bankruptcy takes time, and due to stricter laws today you must first get approval. While I was told approval was merely “a formality,” this is what happened once we went down the path.

  1. Not All Debts Are Approved, and Not All Bankruptcies are Finalized

Declaring bankruptcy is humiliating enough, but we didn’t learn that we had to appear before the court appointed trustee and answer questions in front of a crowd of others until the week before it was scheduled. I was so nervous. Since we couldn’t afford much, we chose a bankruptcy firm that was mostly run by paralegals. We first met “our attorney” at the courthouse just before going before the trustee. (The trustee is like a judge that presides over your case.)  He asked us questions like, “what kind of car do you drive?” Because he saw we had a Lexus as listed on our asset paperwork, he looked at us as suspiciously as if we had overspent on a luxury vehicle, and asked us the current value. I explained our daughter had given it to us when she purchased a new car years ago, and that it had plenty of problems. This answer seemed to satisfy him, but it was very uncomfortable. He looked down at his papers, and moved on.

He then asked, “What was this money transfer out of your account last year?” We learned transferring money, even to a family member, could be considered fraud if someone does so prior to filing bankruptcy. The court can require the whole amount to be paid back, and given to your creditors.) Bill spoke up on this point, and explained that we had set up a savings account for one of our children years ago, and only recently came across the statement when sending papers to our bankruptcy attorney. He explained that even though the savings account was in our name, it was our son’s money. We simply gave it to him. The trustee didn’t seem fully satisfied with this answer, and told our attorney he wanted a more in depth answer in writing. It was things like this I wish I had known prior to calling the attorney that day at the breakfast table. Even after our bankruptcy was later discharged, the emotional trauma still hung on.

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  1. You Answer “Yes” Forever

Our bankruptcy ended up going through, eventually, and yes, our debts were mostly dealt with. We learned the student loans we had signed for our children were not forgivable, so these payments remain with us today. Another thing I wish we had been told was this. Every time we fill out an application, for a car or mortgage or furniture set, we have to answer “yes”  to the bankruptcy question. Time has passed and we have mostly regained our footing, but this will never go away. While creditors are forced to forgive the debt, they make us bound to never forget it. Sure, bankruptcy will come off our credit report after 10 years, but creditors still ask us if we have ever filed. I have a hard time looking people in the eye when filling out those applications. I want to offer an explanation about Bill’s health and job layoff, but I know the person doesn’t really care. After all, they’re only doing their job. However, I wish I had known the stigma that would follow us all the way to our graves. That soothing radio commercial never mentioned the pain or sense of embarrassment that would follow us for years after the fact.

  1. There Are Better Solutions Available

It was really pancakes I had wanted for breakfast that day, but in my need to mentally escape into the newspaper I was reading, I settled for burnt toast. I feel I also settled for less when it came to finding a solution for our credit card debt problem. Calling that radio ad was quick, and it was easy. I didn’t have to investigate my other options because they told me it was my only one. A month later, I came across an article online explaining debt settlement, and I wondered why I had never heard of it before. It seemed like a much better way of handling our past due credit cards, and instead of going before a trustee and having a black mark for the rest of our lives, a debt settlement company would instead negotiate and settle our bills. I learned that many Americans have sought credit card relief through debt settlement over the years, but that it was still a widely unknown option. I understand that it was my responsibility to do research before making that decision to file bankruptcy, but I still wish I could go back for a redo. I would have felt much better paying back part of what we owed rather than nothing, and having someone help us find a resolution with our creditors outside of bankruptcy. This was how we were raised, and how we trained our children. Debt settlement a much better option than bankruptcy, and it is one reason I’m writing this article for others to discover.

If you are facing mounting debts, especially credit cards, don’t be afraid. Don’t run to bankruptcy as your only safe haven. It’s not an instant clean slate or new lease on life. Consider other options. Talk to someone about debt settlement.

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Required Legal Disclaimer: This is an attorney advertisement. This article has been reviewed and approved by Thomas A. Moore, managing attorney Brownstone Law Group, PC. California Bar # 148698. This article is for informational purposes only, does not provide legal or tax advice of any kind or form any type of attorney/client relationship. This article was published on June 13th, 2016.