The Stigma of Bankruptcy

There seem to be a few myths surrounding people that file bankruptcy. Broke people that file bankruptcy at least.

Myth #1

Somehow the bankrupt person wasted their money and then decided they didn’t want to pay their bills anymore. The bankruptcy stigma only applies to broke and poor people, no one ever said anything like that when Donald Trump filed, or Kmart or GM. The rich and famous generally get a ‘file a bankruptcy free card’ and of course, still are rich and famous afterwards.

Which brings me to another myth about broke people that file bankruptcy.

Myth #2

After a person files a bankruptcy they have no bills and suddenly a ton of money. No, I can tell you from experience that broke people are usually still broke and many end up filing again later. Keep in mind that filing bankruptcy doesn’t suddenly pay the rent/mortgage, utilities, car payment, etc. etc.

Myth #3

Bankruptcy filers are proud of filing and feel as though they some how “got over” on bill collectors. I personally was embarrassed of having to file and still don’t generally tell anyone.

These myths remind me of the time I went into my bank (as suggested by my mother) to discuss my options for buying a house. Not that I was ready to, I just wanted the basic information as to what I needed to do now to prepare and what I would need. I also needed to look into a car loan because the SUV I was driving when gas prices were almost $4.00 a gallon was killing me.

My family and their business have been with this bank since the beginning of banks so of course Mom thought I could just go in and get some information just like they would if they needed to.

I met with a woman in an office, don’t remember her title, but I’m assuming she was someone important at the bank. I let her know up front what I make, that I had filed bankruptcy in the past, was working on cleaning up my credit and would like to buy a house one day and was shopping for a car loan. Oh and that I’m a single mom.

Without filling anything out or running my credit report, she told me very simply that as a single mom and having filed a bankruptcy, I would never be able to do it by myself. No car loan. No house.

Never. That’s pretty much a conversation ender. I had no response and thought that was her “friendliest” way to boot my time-wasting ass out of her office.

I thanked her for her time and crawled to my mom’s house, of course crying because geez, is there any hope in never?

Mom gave me the mom speech about how ridiculous that is, that I can do it alone and I will and keep trying etc. etc.

The bank lady didn’t know me and I didn’t feel like I should mention my family. I fully intended on taking care of everything and doing it myself and still do. I moved my money from that bank into a credit union and a couple months later had a car loan.

I learned a lot from filing bankruptcy. I learned that I don’t want to have to ever do it again–mostly because of the myths and stigma of bankruptcy. Most of all I learned that I can do it, and although it’s a cliche, there really is life afterwards. Hopefully a pretty good one.