Friday, March 4, 2016

Freedom from Bankruptcy $$$$$

Posted by Daring Delightful Digital Diva at 12:00 PM 1 comments
I am grateful to have gone through bankruptcy. For the love, WHY, you ask?  

Not for the debt forgiveness as you might think would be nice, but for the life-correcting changes that came with it. The cure of keeping up with the Jones's. The freedom from financial spending and living outside your means.  The stress, the worry, the trying to make ends meet, the trying to pay bills, the attempt to keep credit scores up.

I wasn't by any means bad....over-extended on credit, buying decor, taking trips, being frivolous - nope.  I was smart with money, what happened? For one thing, I had a husband with a business that was going under as well. We also were not compatible financially, among other things. The personal debt in and of itself could have been worked out of. The business debt sunk the ship. Bankruptcy wasn't even to blame for my divorce, as can happen with many. It sure didn't help things and we were in the process, but the two were not related.

Guess what?  One month on February 6, 2016 I've been cleared of my bankruptcy forever after TEN YEARS!  I never thought I would see the day. When you are 30 and filing, ten years seems like forever.  Your toddler would be a teenager, and she is.  Your newborn almost done with elementary school and he is.  And let me tell you that this is not a fun process. It is full of embarrassment, discovery of debts you knew nothing about, lots of couples get divorced during the process, and you are dinged in the financial world for ten years, even for the credit card for my job at times.

Here is what I know: Spending money, having credit card balances, the financial strain - is not worth it. The hard work to pay off debts, keep credit scores up and balances down or zero IS WORTH IT. And to teach your children a different way of life from a lot of Americans.  PRICELESS! 

Here is what I learned over these last ten years:  

They say you won't qualify for a home for at least 2 years after a bankruptcy. I did it in 1.5!  Here's how: I used the tools and people around me to make the best moves.
  • I have a great and smart dad - yes he had to co-sign on a car loan, but I refinanced a year later in only my own name. I also borrowed on a USED car, decent, but used.  There is NO need to buy new new new!  Why walk off the lot upside down when you already have credit issues? Save that for later when you are more secure, or not ever.  In borrowing used, I still borrowed for 5 years, only to give myself cushion, but asked how much the payment would be if it were 4 years and paid that, actually more, each month to pay it off quicker. I have not had a car payment since.  :)
  • I used my financial planner for retirements, savings, and budgeting. 
  • I used my great little credit union for a small credit card for $200 so I could use it and pay it off each month, building up my credit scores. 
  • I got a secured loan for a new bed.  I needed to have a loan, rates are too high, so they also gave me a secured loan for a new bed so I could rebuild credit with loans.  Secured means that it is backed by a savings account so interest rates can be lower and affordable, while you show payments, on time, and responsibility, recommended for at least 6 months' time. If you default, they'd take your savings so they aren't out anything.  Yes, anything that will help build my credit back up. 
  • BUDGET - budget is a naughty 4-letter word to some people, but it gives you FREEDOM! Freedom to do the things you love, comfort when living within your means, and things are not out of control!  I could ENJOY myself!
    • Billpay - I still to this day sit down annually and budget my bills, set reminders, and pay them early.  I've done a paper calendar, I've done online, task lists, etc.  Find a method that works for you. 
    • I round up on interest loans I may have, the sooner the better and even $5 helps!  
    • I still to this day do NOT HAVE A CREDIT CARD BALANCE.  I know that I could if needed or in an emergency, but I also learned that I don't actually NEED those things I want to buy. 
    • I learned the difference between NEED and WANT.  :) 
    • I use my credit card for nearly 100% of my purchases now and I play their game to earn cash back. To make
      sure I am not overspending, I subtract them out of my checkbook register (yes I still keep one!) like it is a debit.  Then I know the money is there and hop online occasionally to simply pay the card from my account.  I raked in $650 last year which I redeem each November for Christmas presents!  That is FREE MONEY when you play the game right! 
SO with all of that, my credit score has steadily risen over the years.  From qualifying for my first home only a year and a half after bankruptcy, to now qualifying for our joint house all by myself, I can say that I am GRATEFUL for the bankruptcy!  It gave me freedom, power, and I moved past embarrassments and struggles to become stronger and smarter.  Financial freedom is priceless! And right now before that bankruptcy falls off my credit report for another month or so, my score is 714! NOT bad!  It'll go up next month!  Booooooya!

Now YOU figure out one small step you can take toward financial freedom!

Daring, Delightful, Digital, and Debt-free-ish Diva!  :)


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