Impressive Failure: On Filing for Bankruptcy at 27

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One of the things I know with absolute certainty is the power of stories. I think we have done ourselves a great disservice with some of our stories, however. In many, many tales, a protagonist often gets a little too eager, too greedy, or is simply too stupid to keep sight of how he or she ought to act, and we find ourselves witnessing a dramatic climax in which the main character finds himself filing for bankruptcy.

We often view filing for bankruptcy through that lens in our realities, as well. It feels like the ultimate sign of failure – the closing chapter (Chapter 7, if you will) in a journey of various ills – drug addiction, misguided ambition, alcoholism, a mental breakdown, a recession or depression. Bankruptcy is what happens when people fail in the biggest ways, right?

But that’s not what my story looks like.

So I wanted to tell my own story, of filing for bankruptcy at the ripe old age of 27 (I’ve always been precocious). I want to tell you how I got to that point, but also what’s happened in my life since, and where I see life heading from here on.

Impressive Failure: On Filing for Bankruptcy at Age 27, or, How to fail at money both hard and fast / Personal Finance / Blue Sky and Dry Land / Michael Noker

Chapter 1: Zen and the art of a failing relationship

To talk about my bankruptcy at 27 years old, I think it helps to first address my divorce at 24.

(As I’m writing this, my phone has decided to play Kesha’s “Praying,” which I’m going to pretend is a sign.)

I’m not going to get into all the specific ways that my first marriage was a disaster. I’ve told those stories before and I’m sure you can find them on the internet with ease if you want to. What I will talk about is the financial side of things.

When I was 17 years old, I left home to move in with my ex-husband (then-boyfriend). About two weeks after I moved in with him, I was woken up on a Tuesday by the sheriff, who was kicking us out of our apartment. I don’t know if it was my sleepiness and naivete, but I’m still pretty sure to this day that the officer told me we were being “evacuated,” and I spent a hot minute wondering what had blown up and whether the zombie apocalypse was starting.

It wasn’t. But one hell of a relationship was.

We spent the next couple weeks couch surfing with his family friends and sleeping in extended stay hotels (that I was paying for with some money I had saved up from working at Taco Bell during my summer vacation before senior year). We ultimately found a low-income apartment that didn’t run credit checks. When we’d settled in, the reality of the situation finally sank in and I started looking up the eviction process and doing the math. I’d moved in with him in December, and there was a high likelihood he hadn’t paid rent since October at the latest, yet neglected to tell me at any point before I uprooted.

We decided around that time that I should be “in charge” of the finances, but that was a designation with little significance.

When I was 18, my ex-husband lost his job because, as I would eventually learn, he had been caught driving a work vehicle while intoxicated. At the time, we were renting a bedroom that was way too small to be considered a bedroom. I had a very part-time job working as a personal assistant that paid me about enough to cover our rent for the month (and essentially nothing else), so this was when I started finding myself in debt for the first time. His debt was also piling on because when you lose your job, your child support doesn’t stop adding up, so he was going into arrears by several hundred dollars every month.

We eventually moved back to my hometown, where he found a job as a server.

He asked me to marry him. At 19, I did. We funded our plane tickets to Vermont (at the time, gay marriage was still not legal nationwide) on a Discover card. The debt grew. We moved back to Albuquerque.

When I was 20, my ex-husband spent $500 on a 2000 Oldsmobile Intrigue with electrical issues. A few months later, it broke down in rush hour traffic in the evening, meaning he found himself standing in front of the car jiggling wires under the hood with no lights and no visibility on a busy road where people drive 60+ miles per hour. He decided we needed a new car, urgently. He went to DriveTime one Saturday morning. He told me he’d financed it for 0% interest through Ford, and I chose to believe that until I finally saw the bill in the mail a few months later. We were paying 29% interest on a $20,000 car loan for a car that was worth about $13,000 at the time.

When I was 21, the week before I graduated college, I got my driver’s license so I could co-sign to refinance the car. The bank wanted us to pay the difference between the car’s value and the loan amount in cash (that we didn’t have), so we ended up going to a dealership to finance a new Ford Fiesta. Being brilliant, and ready to make yet another bad decision, I financed a new Nissan Versa. We chose to do this within the same week knowing that the other loan would not yet show up on my credit.

The decisions didn’t get much better after that. We moved into a condo that cost more than we could afford anyways, with all electric appliances (including HVAC) and an utter lack of insulation. The $300 electric bills in the winter crushed us. We were both working two jobs, but we still couldn’t keep up.

That condo was where I ultimately left him. I filed for divorce in 2014 for various reasons I don’t want to get into.

A few months later, he stopped paying his car loan. As the co-signer, I demanded he return the vehicle to me.

I was a 24-year-old making $10 an hour and trying to pay two car loans. C’est la vie.

Chapter 2: Rebuilding

The next few months were a struggle, but I pulled through. I couldn’t afford a lawyer, so I handled all my divorce paperwork pro se.

In the meantime, I got lucky in a couple ways. One of my bosses recognized my hard work with a raise, a promotion, and then a second raise. A few months later, the assistant manager resigned, and after a summer of trial runs of really bad managers, I ultimately ended up in the position.

My parents were in need of a new car and loved the Nissan I’d chosen, so they took on the payments until they could refinance the loan.

The same boss who promoted me retired at the end of the summer. Because she trusted me (and because the situation with her house worked well with my own circumstances), she offered me the option to rent her house at an incredibly reasonable price.

I wasn’t saving any money, but I was making ends meet.

But I was also incredibly lonely as a single gay man living in a very small, rural town.

Chapter 3: The choices get worse

Loneliness and watching too many romantic comedies makes a man do strange things.

While I was still living in my tiny town, I had a tendency to drive a few hours to the city after work on Friday nights so I could go out. Because I was too cheap to get a hotel room, this often meant sobering up in an IHOP and then driving back, getting home around the time the Sun was rising.

I did this often.

I also hated the Ford Fiesta.

It was a constant reminder of my ex, his failing to pay his bills, my idiocy of cosigning in the first place, and our failed relationship. It also needed a new transmission at 27,000 miles.

I traded it in for a Dodge Charger. My reasoning was, of course, that the payments would be about the same anyways… it just had about 30,000 more miles on it and the loan was dragged out for another three years.

I ended up moving back to Albuquerque to spare myself the overnight drives. I wanted to date, I wanted to dance, and I wanted to be young and single and have fun.

So that’s what I did.

A lot.

I found a job working for a hotel for $11 an hour. I rented a room for $400 a month. I paid my bills. Mostly.

I did have a little bit of a bad habit of eating out, though, and I eventually blew an entire paycheck buying a DSLR thinking I’d become the next big YouTuber (spoiler alert: I didn’t). I also refused to drink alcohol at home, but for the most part, this didn’t hurt my checkbook too much, because I also refused to buy my own drinks when I went out.

The problem with Albuquerque (I told myself – truly, the issues were all with me, not with the city) is that it can be incredibly difficult when it comes to dating. I was still lonely. I felt like something was missing. I felt disconnected from other people.

When the shootings at Pulse Nightclub happened, I felt like I had nobody to turn to, talk to, or confide in. I had a hundred acquaintances and was a dozen mens’ booty call, but nobody actually gave a shit and I couldn’t even bring myself to ask for a hug (like I said, the issues were all actually my own).

Chapter 4: The Downfall

Eventually, I decided to move to El Paso and start a business with my best friend.

I didn’t have a job lined up. I didn’t have any money saved. At the time, I was already looking at about $8,000 in credit card debt. Other than my best friend, I didn’t really know anybody or have any connections.

I’m sure you can guess how that went.

I spent the next year or so failing as a YouTuber, driving for Uber, and pretending to write when in reality I was binge-watching The Vampire Diaries and feeling sorry for myself. I applied for a few jobs, but I barely even got interviews.

Eventually, I did meet a guy and we fell into a relationship together.

I found some semi-consistent work as a brand ambassador, which truly could have provided an almost livable wage if I combined it with some freelance writing and the occasional good night with Uber, but by this time, I was already in too deep. I had somehow managed to work my way into $35,000 of credit card debt. My car broke down and was going to need a $2,500 repair, so I signed a car lease instead. I was drowning.

At the time, my monthly income was at about $1,400. I could have kept myself clothed, fed, and sheltered on that, and maybe even afforded a car lease, but the minimum payments on my credit cards and my student loans alone were higher than my income.

I finally found a full-time job at a call center, but it barely paid above minimum wage. Altogether, I had monthly payments of $1,600 (plus whatever living expenses).

So I started looking at my options.

Chapter 5: In which I file for Chapter 7 bankruptcy

About a month after my 27th birthday, I was sitting in the park outside my apartment and dissociating. I was reflecting on how I’d gotten to where I was – which means basically telling myself this story up to this point – and wondering if this was the end.

If I managed to find a job that paid me enough to cover my bills and my minimum payments, I would be looking at about 10 years before I was finally debt free. This was, of course, assuming that no unforeseen circumstances came along to knock me on my ass.

Ironically, I had a credit score of about 790 even with maxed out credit cards. I had never missed a payment on any bill in my life.

So I had to choose whether I wanted to hold onto that and dedicate the next decade of my life to digging myself out of the hole, or whether it was better to suck it up and file for bankruptcy.

Running the numbers made the decision pretty clear-cut to me. I reached out to my previous employer in Albuquerque to see if they were hiring. Indeed, they were willing to welcome me back full-time. Even at a pretty low rate of pay – $11 an hour – I would have enough to cover living expenses and start saving money. Even if I kept that low of a wage, I’d be able to pay off my student loans (which cannot be discharged in bankruptcy) in only a few years and be debt free after that point. I could buy a car in cash within a few months. I would be able to breathe again.

I knew I would ruin my credit, but I wasn’t planning to buy a house anytime soon regardless (it would have been incredibly difficult to buy a house with such a limited income and such a high level of debt, after all, and I wouldn’t be able to even start saving for a down payment for several years).

When my boyfriend got home, I told him what my plan was. I was pretty much settled by this point. He seemed to support it.

I called my parents to tell them my plan, too, and how I’d reached that conclusion. As it turns out, they had also filed previously, so they knew what the process looked like. They also supported me in my decision.

I looked online for success stories from people who had done the same.

All signs pointed to filing for bankruptcy.

Chapter 6: It’s not that simple

There are a few things you have to overcome when you file for bankruptcy.

First, and most difficult, is the sense of shame, defeat, and hitting rock bottom.

I don’t know how to overcome that sense of shame – the guilty feeling of abandoning your obligations and letting someone else foot the bill.

I don’t know how to tell you that it’s okay in a way that you will believe it.

All I can say is that bankruptcy is a right afforded to people who would otherwise be unable to survive. It is a protection built into law as a panic button. It is a safety net. It is a parachute for when you find yourself plummeting downward out of control. It is an ability to stay afloat when mental illness, divorce, poor choices, a lack of education, predatory lending practices, drug or alcohol addiction, job loss, recession, or late stage capitalism in general are threatening your ability to continue to live.

Filing for bankruptcy is okay.

Failing is okay.

It’s okay. You’re okay.

And that’s what I told myself.

It became my mantra as I started researching the process. I told it to myself while I sat in attorneys’ offices. I said it while I opened credit card bills that I knew I wouldn’t be paying (bankruptcy requires cash, of course, and the only way I could afford it was to stop paying bills – there’s also no sense in paying for a debt that will be discharged in six months anyways. This is not the time to “do the right thing” and hold onto your sense of pride; pride costs way more than you can afford).

I continued to repeat it while I collected dozens of pieces of documentation and filled out dozens of forms. I continued to repeat it every time a creditor called me to ask me to pay them, while I read off my attorney’s phone number to the fifth credit card company, and while I watched my credit report as the first missed payment of my life hit it. I repeated it every time I checked the parking lot to see if my car had been repossessed yet. I repeated it at least a thousand times in my own head while I sat in the courtroom and answered a long list of yes or no questions from a judge.

It’s okay. You’re okay.

There is hope after bankruptcy. The sun still rises. / Blue Sky and Dry Land / Personal Finance / Michael Noker
The sun still rises.

Chapter 7: Filing Brings Freedom

The day I filed felt like the loudest. My phone must have rang 30 times. I listened to dozens of voicemails telling me the balances on my accounts, what my past due balances were, and when I needed to make my next payment.

My lawyer and I had a long discussion about the next steps while we reviewed all my documentation and all the forms he would be submitting to the court later that afternoon.

I could hear birds chirping and cars honking as I walked to the bank to get a cashier’s check to cover my filing fee and the attorney’s fees.

In my head, I was still questioning whether this was the right decision or not. I was still beating myself up for my failures. I was still telling myself I was bad for doing this and wondering if it was too late to back out.

And then everything became quiet.

The calls stopped as my creditors were notified, one by one.

I got a court date in the mail a few days later. And then I waited.

I waited and I went to work and I paid my living expenses and I opened a savings account and I got a second job.

After court, I waited some more.

And then one day, as I left work, I found myself in a silent, dark parking lot, staring at the empty spot where I had parked my car. It had been repossessed.

Cars are pretty heavy and big. They don’t usually go anywhere. Until that day, my car had always remained right where I’d left it. I still haven’t quite found a meaningful way to process the strange feeling of something so big disappearing at some point during an eight-hour shift.

The next day, I received my discharge paperwork in the mail. The day after that, I received my first credit card offer.

Chapter 8: The beginning

Bankruptcy is often seen as the end of some dramatic series of events. It’s the final nail in the coffin of a life gone awry.

What they don’t tell you, as I have learned since, is that life goes on.

You’ve filed for bankruptcy, but that’s not the end of the story. I don’t even know if it qualifies as an entire chapter – or anything more than a page in the story of my life.

It has been two years since then and I closed on my first home just a few weeks ago. I’ve worked hard to get to where I am now (more on that to come in a future post!).

Bankruptcy is like divorce. It is far more painful starting the process than it is when you come out on the other side. Your final paperwork isn’t the sealing of your fate. It is relief. It is the symbol of your survival. It is your permission to move on and grow.

Like most people, by the time I received my paperwork, I had already began the process of rebuilding and made some significant progress.

Since then, I sometimes think about myself sitting on that park bench and feeling overwhelmed, ashamed, and, to be completely frank, suicidal. I want to go back in time and give myself a hug and show myself what life will end up looking like just two years later.

I sometimes think about where I would be if I had stuck it out and held onto the sense of duty to my debtors. What would have happened? Would I have paid off even one debt by now? Would the debt have grown? Would I still be drowning?

I don’t want to leave you with the idea that bankruptcy is your only option, or even your best option. Everyone is facing different circumstances and your best bet is to visit with a lawyer who can lay those options out for you and help you decide if this course is the best for you. For the most part, those meetings are free of charge, and you can even use them as an opportunity to vet different lawyers and find one who you think will help you feel most comfortable with your decision.

Note: I will say that if your attorney proposes Chapter 13 over Chapter 7, you may want to consult another for a second opinion, especially if you’re a black person living in the South. 

For me, I owe a lot to my attorney. His fees were very reasonable, his process was streamlined, and he was reassuring and compassionate throughout the process. In fact, about a year later, when a friend of mine found herself in the same situation, I referred her to him because I knew he would take care of her.

It may not be the best choice for you, and I hope you have the support of your friends and family regardless of what course of action you choose to take, but I do want you to walk away from this article knowing that shame should not be the factor that stops you from pursuing it. Nor should the emotional factors behind swallowing your pride and facing that sense of shame. I found far more emotional relief and a sense of having done the right thing for me by making the choice I did.

If you enjoyed this post, please consider subscribing to the blog. Have you been through bankruptcy? Are you looking at potentially starting the process? Or maybe you have strong opinions against filing for bankruptcy. Either way, leave a comment below to talk about where you’re at and how you feel.

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