Starting Over – A Bankruptcy Story

by Emily · 9 comments

in Money & Spending

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.



1 Declaring Personal Bankruptcy March 29, 2010

I really appreciate you and your husband!
.-= Declaring Personal Bankruptcy´s last undefined ..If you register your site for free at =-.

2 Simple in France March 29, 2010

Ugh! How awful that you just got out of bankruptcy and already the vultures are circling again! I’m glad you’ve decided not to go down that path another time. It sounds like a real struggle and a lot of hard work. I wish you the best at your new start.
.-= Simple in France´s last blog ..Sustainable, recession-proof restaurants near you? =-.

3 Annie Jones March 29, 2010

Bankruptcy is a bad thing that happens to good people sometimes. You are very brave to post this. I know, because I posted our story (it's a very early post on my blog).

The good news is that it gets better. You don't sound like the type to fall into debt again, and with hard work, you'll recover. We filed in 2003, moved into a rental, and were able to buy a needed vehicle and the home we're in now in 2006. Since then, we have refinanced the home to a better interest rate and have been paying extra on the van so that it's almost paid off. Once it is, we'll be debt-free except for mortgage. We intend to stay that way.

One thing we did about a year after our bankruptcy was to get a low-limit credit card from our credit union and charge some small necessities. We ran up a balance of just $100-$200…something we knew we could easily pay off…then we let the card carry the balance and paid only the minimum for a couple of cycles, then on the third billing we paid it off completely. We waited a while then did the whole thing again…several times. That may not be the best advice for someone who can't control themselves with a credit card, but since we could, it helped repair our credit more quickly. In the last year or so, though, we've stopped doing that and only use the credit card once in a while to keep the account open and then pay it in full immediately.
.-= Annie Jones´s last blog ..Monday Morning Chit Chat =-.

4 Jenn March 30, 2010

You have a great process to rebuild your credit quickly. You’re right, the key is self control!
.-= Jenn´s last blog ..Last Day to #Win a Protect A Bed Premium Mattress Cover =-.

5 Random Thoughts of a Jersey Mom March 29, 2010

Thank you for sharing your story. It’s a terrible thing to have experienced. I’m very happy for you that things are starting to look up. I know you will be able to save enough to buy a house with cash!! =)
.-= Random Thoughts of a Jersey Mom´s last blog ..Brain is Like a Muscle =-.

6 Robyn March 31, 2010

Wow. Thank you for posting this! :o) Your financial goals are inspiring and I hope God continues to bless your family!
.-= Robyn´s last blog ..Rest and rejuvenation. =-.

7 Mickey March 31, 2010

Best wishes to you on your new start, Emily. I hope your new life of financial responsibility is a good, happy & productive one.

However…I feel obliged to point out that on the other side of the bankruptcy coin are the creditors – I once lost a lot of money when one of my clients declared bankruptcy. I never saw a penny of what they owed me, and I still had to pay off all the subcontractors I’d hired for the work that we did for them. That all came out of my pocket. What if I couldn’t have paid them? Then THEY would have had to pay for materials, labor, etc from THEIR pockets.

Bankrupcty isn’t just a personal hell for the declarer. Its effects can spread far and wide.
.-= Mickey´s last blog ..“She owns the subject…” =-.

8 Laryssa @ Heaven In April 7, 2010

I'm so sorry you all went through that!

9 Forest April 14, 2010

I’m so sorry to hear about the events leading up to the bankruptcy… It sounds like you have come out of it very well and ready to take the world on.

My own story is not the same but I have ended up on a debt management plan. I lent money to family through loans and they never paid me back… Over 5 years it built up until I couldn’t afford payments and ended up in a predicament…. That’s why I am now in the debt management plan. I pay a set amount each month (around $200 US) which is much easier to handle and it is reducing the debt, slowly (18 years to pay it all off right now).

As for credit, NEVER again. If I ever buy a property it will be cash too.

Times are hard right now but I feel positive that I will get through and that emergency fund is paramount.

Thanks for sharing your story.
.-= Forest´s last blog ..A Helping Hand For Fellow Yakezie Members =-.

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