It’s not something that I would ever have anticipated saying but going bankrupt was an incredible relief for me. Declaring bankruptcy is certainly a serious situation, there’s a detailed legal process to go through and there are implications for your finances over the course of the following six years but my principal feeling after the initial procedures and official registration was one of overwhelming relief.
I had always borrowed money in one format or another. I had an overdraft facility, a credit card and a couple of charge cards. There would be times when I would dip into my overdraft and times when I would go a bit heavy on the cards but it was always very manageable and there were many times when they were all clear.
Hindsight’s a great thing
Looking back on things I can clearly see now just exactly what happened and how it happened. I had taken on a new job and the company was full of people my age many of whom I got to know and got on really well with. My social life and activities just deemed to really expand. I was going out more, eating out more, I joined an up market health club and I found myself buying more clothes and sportswear. I also bought myself a new car. My lifestyle had changed and it was great, I was really enjoying myself.
Over a period of about twelve months, I hardly even noticed that I was increasing my debt across the board, overusing my cards and often using what was then an increased overdraft facility. I had also committed to additional direct debits such as the gym membership, new mobile phone plan and a few online subscriptions.
It can happen any time
Then disaster struck, the company lost some big orders and had to cut back and it was a case of last in first to go. So I lost my job. I was out of work for about seven months and the best job I could get was paying much less than I was previously earning. Things were really difficult when I wasn’t working and the extent of my more expensive lifestyle really came home to roost. The only option I could see at the time was to use my existing credit facilities to get by, and so my debt simply increased. Once I started working again I borrowed even more just to get over what I thought would be a short term problem.
Borrowing money to get out of debt doesn’t make sense and is not the answer, I know that now. Missing payments, incurring penalty charges, bouncing cheques, returned direct debits all become a downward spiral. The lender demands, constant phone calls, debt collectors at the door is a nightmare. The sleepless nights and constant worry is a terrible place to be in your life. The feelings of helplessness and hopelessness make it difficult to cope and even think straight.
Finding the solution
One of the few friends I could confide in took the initiative and made an appointment for me to see a debt advisor and thank goodness he did. I was up to my eyes in debt and didn’t know what to do. They advisor certainly did know what to do. She assessed my total debt and prepared an income and expenditure statement along with a valuation of my assets. It wasn’t a pretty picture. I was insolvent and was advised the best option was to declare myself bankrupt. It’s important to get professional bankruptcy advice.
The bankruptcy procedure is actually a relatively straight forward process and it allowed me to agree a payment I could afford to my creditors each month for the following five years and then write off the rest of my debt. It was the only way out and I was glad to take it and get back to some kind of normality. It’s not easy during the bankruptcy period but you adjust to what’s required and get on with it. But just knowing there was light at the end of the tunnel made it all worthwhile.