Wendy writes: 

“What was the cost to you for your bankruptcy….that is, your credit cards are gone and you’re starting anew and I’m really happy that you get a do-over… 

But we all hear about folks who file bankruptcy and it sounds like the easy way out.

Surely it isn’t. I would guess the process for people is a lot like rehabilitating themselves from drugs. But folks with a chemical dependency, for example, will live with the re-building of their personal lives, relationships and often physical body.

So I’m asking…show me your scars. What’s stopping me from charging up storm on the $100,000 in credit I have with a plan to file and make it all magically go away.”

For me, the upfront cost was $2,500 for my attorney retainer, credit counseling courses and filing fee. 

Life without credit cards is not carefree.  My car transmission melted down last Saturday, and I have to borrow another $2,800 from my sister to have it rebuilt (yes, I have a plan to pay it back).  I HATE asking others for financial help, but I have no other alternative.  If I had a credit card, I could have charged it and paid it down.

Yes, that could be a down payment on a new car, but I am broke and have damaged credit at the moment, so that’s not an option.  My credit will improve after I responsibly use a secured credit card for a year or so, but even then the lenders would look at the BK on my record, sharpen their knives and charge me Shylockian interest rates.  I MUST keep my 22-year-old car running, which runs up the stress whenever I have to take it in for repairs and hope it can be fixed for a reasonable amount.  If my car completely dies, I’m f’ed.  

I have to stay in my apartment at all costs, as well, because landlords are reluctant to rent to people with bankruptcies on their records.  In my case, this isn’t so bad – I live in a rent control apartment five blocks from the beach.  Even so, this adds another financial razor’s edge to my life.

When I first met with my attorney last July, I was so stressed out I couldn’t properly fill out the retainer check.  You’re right - filing a consumer debt bankruptcy is similar to drug rehab.  You can’t imagine living without your credit cards to fall back on.  Once they’re gone, you have to rethink and rebuild your economic life, especially if, as in my case, your BK is tied to the evaporation of a 25-year career.

Declaring bankruptcy is a public admission of financial failure in a financial-failure-averse culture.  I went through a lot of serious soul searching to get to a place where I could see myself as someone who faced a tough decision and carried it through.  Unless you’re a financial sociopath (google “Bernard Madoff”), bankruptcy is not an easy way out.  It carries with it emotional turmoil, social stigma and economic costs. 

I cannot show you my scars because I do not consider myself a scarred person.  I once read of a pack of beagles from Virginia in a hunting competition in Arizona.  They had never been in a desert environment.  Whenever any of them stepped on a cactus thorn, they would stop, yank it out with their teeth and get back on the trail.     

I have had friends who have died of cancer.  I’m sure any one of them would’ve gladly traded their disease for Chapter 7 bankruptcy. 

I walked through the fire and came out on the other side.  Bring me that horizon.

What’s stopping you from charging up your $100,000 in credit?  From a physical standpoint, nothing.  I’m sure there are retailers, airlines, hoteliers and Vegas casinos who would love to have your business in this recession.  

If you go on a spending binge and max out in a short time, however, your creditors and bankruptcy court may consider this credit card fraud and challenge the discharge of your debts.  Which means they won’t magically go away.