Money isn’t a measure of character, but society acts like it is. And that couldn’t be further from the truth. It’s important to hear that at a time when financial anxieties are at an all-time high.
Jobs are vanishing, the stock market is fluctuating, medical bills are piling up, and government budget cuts are putting Social Security and other public services at risk. For some, the economic situation we’re currently facing mirrors previous recessions.
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Bankruptcy and financial loss aren’t personal failures in any capacity. More often than not, it’s a case of someone in a system that’s already working against them.
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Last week, I asked members of the BuzzFeed Community to open up about experiencing bankruptcy or losing it all, and these submissions shared some honest insight into how they handled or are currently handling debt and stress.
Note: Some submissions have been edited and condensed for clarity. Some responses are from this Reddit thread.
1.“So, I was a stay-at-home mom at the time, because my old job hadn’t paid enough to cover daycare. My ex-husband made enough for us to live on, but nothing more, really. My parents helped put him through grad school. Then he committed crimes and was fired (of course), and I was unemployed with two kids and no daycare openings. I scrambled to find a job and a place to live, and am eternally grateful for my parents’ support. That said, my job paid about a quarter of what his did, so there was no choice. I’m a little more than halfway through.”
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“That’s the backstory, but here’s the truth: it’s MORTIFYING. The bank I’d been using since I was 15 closed my account unceremoniously. Didn’t matter that I hadn’t had any loans through them that were discharged. Just cut me off and mailed me a check weeks later. I can’t get a cellphone plan or any reasonable insurance, I had to pay cash for a car, and thank heavens, my parents were willing to have their names on my utilities because the WATER company refused to give me an account.
Before this, I’d never missed payments or fallen behind, and had good credit. It was so good that most of the debt was in my name, which probably worked out great for my crap bag ex. So that’s it, I pay for someone else’s mistakes every day. And if it weren’t for my parents, it would have been catastrophically worse.”
—shannonmiz
2.“I’m a bankruptcy paralegal, and honestly, people think it will be so much worse, but it’s a fairly simple process. Even the 341 meeting of creditors isn’t that bad. Bankruptcy forms are free online, and if you want to file, my biggest advice is to fill out forms A/B (personal property), I (income), and J (expenses) because a lot of the holdup is just trying to get that info. So many people will call crying after their discharge, thanking us because they feel the weight off their chest.”
—monikap6
3.“American here. My husband and I filed after I got sick and couldn’t work for two years, racking up medical debt without the income to pay it, and using credit cards to buy groceries and basic needs. We had to move back in with my family because we couldn’t afford rent. We filed a Chapter 13, which meant we still owed a large portion of the money, but a fraction of the total. We’ve just paid it off after five years of payments.”
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“We’re wiser about our budget now, we’ve completed credit counseling, and our income has now increased to where we rent and our only debt is student loans. We’ll have to get secured credit cards and build credit back up slowly. It’s a long process, but I’m so thankful we did it. The payments were tough, but manageable, and we now have a sense of accomplishment, as well as a sense of how to build a nest in savings that can be there if one of us is out of work due to illness. It sucked, but I’m forever thankful.”
—carak4a8cd43e8
4.“21 years ago, I’d just had a child. He turned 1, my spouse came home, and decided he wanted a divorce! I didn’t even know we were having issues! I mean, we just had a kid! I was always a happy-go-lucky type! Came out of nowhere! Discovered we were $100,000 in debt!”
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I had to hire two attorneys. One for divorce, the other for bankruptcy. I took on the entire bankruptcy, as I told my attorney he can’t touch my 401k because I wasn’t setting him up for the next 30 years! I was in bankruptcy for five years because I had to pay back, since I made too much money. According to the state requirements, I did not have a penny to my name. Single mom, new baby, bankruptcy. NOT a penny to my name! The attorney at the time said it was the worst bankruptcy he had seen. Regardless, I did it. Rebuilt my life, put my son through private school, paid off my house, have money in the bank, savings, 401k, and will retire in two years with $1 million in retirement! Looking back, as horrific as it was at the time, it was the best thing to ever happen to me.”
–65, Akron, OH
5.“Now, I’m doing very well. It took a while to get back to where I was and beyond. I’ve lost everything: my house, car, savings, liquidated my 401(k), and filed for bankruptcy. I had to live in a motel for a little while. Started back at a minimum wage job when I was making over six figures before. Now, I’m back to making over six figures. It took time, perseverance, not giving up, and knowing that sometimes, we have to pay our dues more than once.”
–57, Florida
6.“I filed Chapter 7 bankruptcy TWICE by the time I was 28. I definitely understand things happen and how it can all go south quickly. I was making under $30k a year and HIGHLY irresponsible.”
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“I went to college and turned it all around, and I am now much more responsible, and I went through the process of building my credit back up. Around 12 years ago, I had my second bankruptcy fall off my credit report and had some years of building credit.
I went from a credit score of 385 to a FICO 8 score of 843. I know things could easily change for me again, so I thank my lucky stars I’m doing well right now.”
–u/pharmucist
7.“I declared bankruptcy before I turned 30 due to bad health and credit card debt. After nine months of minimal payments, it was a weight off my shoulders and a fresh start for my credit history. Bankruptcy isn’t a moral failing; it’s a societal one.”
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–30, Canada
8.“Life changes at the drop of a dime. I went from a nice-paying job to going through my first job loss during a company restructure in COVID to being unable to find work and having to resort to serving at a restaurant and doing delivery apps. The restaurant went bankrupt.”
“I got a temp job, but they cut hours to nothing after the hurricane in my area. With the lack of hours at the temp job and my car having an issue that caused it to be down for over two weeks, trying to troubleshoot, and after spending money on parts and Uber to job interviews, I’m so far behind. I’m doing 14-hour days in a hot car and will still be $200 short on rent, and will end up homeless now. I defaulted on my credit years ago and have to sort that out once I can afford to even file for bankruptcy. I’m not ashamed to need it. I know it doesn’t matter in the end. I am just in utter survival mode until then. Maybe one day life won’t be so cruel to me.”
–u/Patient_Ad_2357
9.“I left my cheating husband of a decade a couple of years ago. I quit my career so I could raise our babies and he could excel at his career and go to school.”
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“10 years into our marriage, I decided to return to university. The plan was to finish a degree and return to work, so my spouse could take time off. I took out student loans for the first time ever in my 40s. I started a small business and sold art at markets to bridge the financial gap while attending college.
Shit hit the fan, and I found out he had a secret life for our entire marriage. I was married to a stranger.
I had to move with zero money and took out a line of credit with my bank. I had great credit and looked at buying a house for the kids with a loan because my small business was doing well.
Then, divorce. My credit dropped 400 points. My business is done, I had to drop out of school, I owe tens of thousands in loans, and I never finished my degree. I am now looking at bankruptcy, a complete 180 from when I left my spouse. I’m on government assistance and am ruined.”
–46, Austin, TX
10.“My parents filed for bankruptcy when I was 15. It was a very tense few months around the house as we adjusted to no longer using credit cards; we did some heavy couponing at that time, and a lot of the luxuries my parents treated us to (vacations, certain foods, etc.) were non-existent.”
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“I had either just entered the workforce or was about to (don’t recall the exact dates), and my parents’ financial woes shaped me at a very impressionable time as I was earning my own money for once. I learned the value of a dollar, hard work, and financial discipline. I clearly remember talking to my family about getting my first credit card; they were adamant at first that I should not get it, but after I explained to them that the sole purpose of the card was to develop my credit, they enthusiastically approved as I clearly understood how to use credit cards to my advantage.
25 years later, my family is mostly recovered (I had to loan my parents some money off and on for about seven years, which they fully paid back eventually). My parents are retired and live modestly. I developed a philosophy of living below my means and have maintained an 800+ credit score for my entire adult life. While I have run into financial problems from time to time, I’ve never gotten close to filing for bankruptcy myself. If you are facing bankruptcy or financial hardships or just want to avoid getting to that point, I have a few pointers: make sure you teach your kids about responsible usage of credit cards, don’t hide financial issues from your spouse, and learn to live below your means, if possible. It may not be as extravagant a life as you dreamed of, but it definitely has its perks in the long run.”
–31, Iowa
11.“I’m doing well. I bought a house two years ago, eight years after filing bankruptcy. I had lost my job in 2008, was out for almost three years doing freelance, selling things on eBay, and taking in alterations sewing. I wasn’t wild with credit cards, and could have maxed them out, but I ended up $14,000 in the hole with my mortgage. I was back to work full time with a great salary but was too far underwater. I found a buyer for a short sale, but the bank wouldn’t accept it, so I went into Chapter 11, gave up my $350,000 house that had decreased in value to $300,000, and paid $900 a month to pay off some of the debt through the courts.”
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“Now, I have a credit card ONLY for emergencies or something I need to buy online that won’t take a debit card (like car rentals). I save every penny I can as I know what it is like to have nothing. That’s quite a motivator to stop buying coffee out every day!”
–64, New Hampshire
12.“Two bankruptcies and life has never been better. I have excellent credit, and it’s only been six years since my last one. If I get hit hard in the wallet again, I’ll do number three. Easy process.”
–44, California
13.“I filed at 35 mainly because my medical bills got out of hand, but I was nervous about bankruptcy because of the stigma that the term carries with it. I was able to pay the monthly notes for three years, and it was discharged. I’m 44 now, and although it shows up on my credit report still, I can purchase things without any problems. The bankruptcy sucked, but the outcome has been nothing but positive.”
–u/srich127
14.“I stole my parents’ car at 15 and crashed it with my friend in the car. She was hurt pretty badly, and her parents’ health insurance covered her bills. The insurance company then sued me and my parents individually. We all had to file for bankruptcy.”
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“I did not learn a thing at all, except I could escape all financial responsibility by filing, so at 22, my situation was worse than before, so I filed for bankruptcy again. I had to go through my 20s with no credit at all.
Finally, at 27, I got a secured credit card that required to hold a $200 savings account, which I could charge $100 out of. Then I met my ex-wife. It was with her help that I was finally able to establish myself with banks. We have since divorced, but I took the lessons she taught me.
Don’t spend more than you have. Don’t dream of spending more than you have. Break your life down into ‘wants and needs’ and address all the needs while containing all the wants. Oh, and don’t have kids. Doing this, I could retire at 50 and move to the beach in Mexico and do nothing forever. “
–53, Mexico
15.“Bankruptcy was, honestly, one of the best financial decisions I made in adulthood. Five years ago, I was drowning in credit card debt, and there was absolutely no end in sight. Then COVID hit the world, and things got even worse. I lost my job during that time and was able to find a new one about five months later, but I was making significantly less, adding more stress to the already huge mountain I was facing. When we got the $1,400 stimulus checks, I used mine to pay for an attorney and filed Chapter 7.”
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“I was able to reaffirm on my car, which meant paying what the vehicle was worth versus what I actually owed on it. It took a little adjusting not having credit cards to fall back on, but I was saving hundreds a month on not having to make the payments. Within a year, I got a credit card through my credit union with a $500 limit, and then later on was able to get a personal loan for $2,000 for moving expenses. My credit score shot back up to 700, and here I am, five years later, with a couple more cards (in case of emergency), a new vehicle, and I qualify for a mortgage. The first year was rough, but I have absolutely no regrets about filing. It truly saved me. I think we are conditioned to believe it’s rock bottom when really, it’s a chance to start fresh. It’s harder to get approved for things the first year or so, and interest rates will be higher, but it also gives you more of a reason to be conscious of what you’re spending anyway.”
