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Emily's list: Bankruptcy edition
I've been too busy to read most of the magazines I subscribe to lately, but last weekend, I found the time to flip through some piled-up issues. An article in Elle from earlier this summer called "Going for Broke" caught my eye.
The journalist, Jessica Firger, tells her story of going through bankruptcy. I have to admit that I'm guilty of assuming most people who file for bankruptcy have simply made poor decisions. I haven't heard anyone tell their story in detail about how they got there, so I found it really eye-opening. While the writer does admit to living a bit above her means, it didn't come from buying a flashy car or huge flat-screen TV; it crept up over time.
Firger explains she had several low-paying jobs, two periods of unemployment, student loans and an expensive health problem (and it didn't help that she lived in Manhattan). Then there's the credit card she used too often. She explains, "I can't blame shoes or vacations for the $30,000 hole I found myself in. I can blame the new mattress I desperately needed when I moved into my first apartment at 23. I also blame the $15 lunches bought at the closest upscale deli in midtown Manhattan when my boss wouldn't tolerate my absence for more than 10 minutes." Whenever she thought she was getting ahead on payments, something else -- being laid off, for one -- would set her back.
She argues that Gen-Xers such as herself are prime for bankruptcy. "Our identity has been shaped by the immense debt we've racked up in an effort to maintain the standard of living we enjoyed with our baby-boomer parents," she says. "Yet bankruptcy is often still viewed as a personal declaration of moral weakness -- even in the midst of our Great Recession. In many cases, perhaps even most, however, bankruptcy is precipitated by significant misfortune."
The author goes on to share statistics about how most bankruptcies are due to job loss, income decline or medical bills. I immediately realized how wrong I was about people simply getting there by making poor decisions. It turns out many people who file for bankruptcy do so for reasons beyond their control.
Long story short, Firger realized she needed help and qualified for bankruptcy. After getting through it, she took an online credit counseling course, straightened out repayment plans for student loans and traded out her regular credit cards for secured credit cards.
I love his paragraph toward the end:
"The fact that I'm still standing -- housed, clothed and fed -- surprises many of my friends, and some barely conceal their disgust at my financial condition, the big scarlet B on my chest, behind a look of grave pity, as if I've confided news of a recently acquired STD. But others dropped their guard once they'd recovered from their initial surprise or horror and turned to interrogating me about the process -- quite obviously fingering the aching tooth of their own financial worries."
I loved reading her story about how she found herself in such a dark place and what it took to get out of it and move on. It gave me more sympathy for people who find themselves in over their heads. I hope you'll check out her article and read on for my roundup of my favorite personal finance blog posts from the past week!
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