Starting Over – A Bankruptcy Story

Just a brief background:

In August it will be six years since my husband and I bought our first Domino’s Pizza franchise.  We were doing well – lots of money in savings, a brand new baby boy.  A few months after the purchase, we moved out of our apartment and into our newly built home.  We paid off both of our car loans.  The store had a very healthy sales profile.  Life was good.

Then sales began to slip as the economy slowed down.  We made the fateful decision to purchase a second franchise in the neighboring town.  We tried to juggle both stores, but as soon as we’d leave one to pay attention to the other, the neglected store would deteriorate.  After 15 months, we closed that second store.  That experience earned us a mountain of debt, tapping our personal credit cards time and again to make payroll.

A few months after closing location number 2, my husband had to stop paying his own salary so we could afford to pay our employees.  We were both working in the store gratis.  Our bills began to go unpaid.  Our house went into foreclosure, the credit cards into collections.  We sought legal counsel.  And somewhere in the middle of all that, we lost our precious daughter, Leila, to stillbirth.

As I write this, it’s been two months since our bankruptcy had been discharged.  It’s a relief to be able to pick up the phone again without fear of harassment.  Our house sold at Sheriff’s Sale a month ago.  We’ve moved into a much smaller house, with a MUCH smaller rent payment.  My husband has just started being able to pay himself a salary again, though it’s nowhere near the size of his old paychecks. Nevertheless, I can’t tell you how excited I am to balance my checkbook – it’s a thrill to see money there!

A few thoughts about bankruptcy.  It’s expensive.  It’s complicated.  It’s demeaning.  You feel like the lowest of the low.  The courts made us take this finance class which I could have taught, where we were patronized because of our lack of financial knowledge.  I’m very grateful we had nothing of worth, the bankruptcy trustee had nothing to confiscate and sell.  I do have regrets, too.  We never lived an expensive lifestyle, with exception of the new house.  Both of our cars are 10 years old.  Our only vacation these last few years was Las Vegas for a Domino’s Rally, of which all we paid out of pocket was one person’s airfare.  Sometimes I wish we would have taken a beach vacation or something.

The upside of bankruptcy?  At the same time that you’re struggling through it, it’s freeing.  It truly is a new start.  After years of collection calls, you become paranoid about what they can take from you.  Post-bankruptcy, your slate is clean (with a few exceptions: like you need to present the tax return for that year to the trustee for evaluation, and if you’re getting a return, they may have claim to some/all of it.  Ditto for inheritances for the next year or two).  Your life and finances become your own again, and with it comes responsibility.

For us, we never want to lay our hands on credit again.  Oh, there have been opportunities – barely a week goes by that we’re not solicited a half-dozen times.  Everyone wants to help us finance a car or give us a piece of plastic with a 24.99%  APR.  After all, now we’re a sure thing.  We’ve used our parachute, and they won’t give us another for 10 years.  I pray for our health, that we don’t have a catastrophic illness in the next few years.  We’re trying to build up some savings now, as an emergency fund that will roll into a house payment if it’s not used.  Our ultimate goal is to buy our next house, cash.  Lofty?  Yes.  But now that we are living well below our means…possible.

Having credit is like having the tiger by the tail.  As long as you can afford to feed it (make payments), you’re in a grand place.  Let it starve, and it’ll chew you apart.

So that’s my “Starting Over” story.  We’re still standing strong, somehow our marriage is surviving.  We have God to thank for that, without Him there’s no way we would have made it this far.  We’ve learned some hard lessons.  We’ve simplified our lives of the clutter and chaos.  We’ve gained humility and compassion.  And perspective.  It could always be worse.

I’d love to answer any questions you may have, or hear any wisdom you can offer.

~emily