Life Five Years After filing Chapter 7 Bankruptcy (hint: it's MUCH improved!)

[rj376]

Is anyone on this forum curious as to what it's like five years after filing for Chapter 7 bankruptcy? It was one of the wisest (and minimally painful) moves I've ever made in my life...

[laz]

That's exactly the topic going through the minds of millions of people.

How has your life improved?

What advice would you give people thinking about it?

[rj376]

Here are the many ways that my life improved big-time as a result of filing Chapter 7 bankruptcy... First and foremost, the bankruptcy promptly eliminated $53,000.00 in consumer debt that I accumulated over the years. I formerly had a professional photography business for many years that became devastated as a result of the last major recession where the vast majority of my clients stopped doing business.

With the complete elimination of all of my debt, I was then able to proceed without the huge weight of the former debt which psychologically felt amazing (and still does five years later). I have a very close friend who is an attorney who kept telling me to file bankruptcy (his practice does not specialize in bankruptcies), and who recommended an attorney who he told me was excellent at bankruptcies (who I decided to go with). My lawyer friend told me that filing bankruptcy was not nearly as a big deal as most people think it is, and he was 100% correct.

Shortly after filing bankruptcy, I applied for and got a secured credit card from the State Department Federal Credit Union which after doing a fair amount of research I determined that SDFCU was one of the best financial institutions to do this with. After a year of using the secured card, I requested a non-secured credit card from them, which they granted to me (initially with a $1,000. credit line, and then they automatically increased my credit line to $2,500. within approximately two years).

Anyone can become a member of SDFCU, but people without government employer connections need to become a member of the American Consumer Council (which is free). I also closed my photography business, and got a steady job as a transit bus driver which is very secure, pays well, and has great benefits. Since I have no debt, I'm able to save and invest $25,000. to $30,000. of my pay each year which accumulates rapidly.

I always use the SDFCU credit card carefully, and always pay it down to zero so I never need to pay interest on the account (which was much easier to do considering I no longer had any significant debt). Shortly after the bankruptcy, I also was able to get a car loan at 3.9% interest (after shopping around for the best rate). Most banks wanted to offer me a loan at 10%, but I finally found a good credit union (Alternatives Federal Credit Union) who offered me the 3.9% rate. The loan was for $13,000. (for a 2014 Honda Civic with 11,900 miles on it), and I was able to pay the five year loan off in two years, and three months by doubling my payments. Then I dropped the mandatory collision insurance coverage so my monthly car insurance bill is $56.00 per month through USAA.

Doing the bankruptcy mandated that I took a financial literacy course which was helpful. I also took another financial literacy course known as "Money Wise" through a local credit union which was excellent and very helpful. I now document and track every penny I spend and I also have developed a spending plan and budget as a result of the skills I learned from these courses. My credit score improved dramatically, and two days ago I was approved for another credit card via Citibank which I got to increase my credit score further. I hope this is helpful!