Starting Over: Tips for Dealing with Bankruptcy & Foreclosure

Bankruptcy fillings have been going up steadily in the United States as our economy worsens, but only roughly where they were before the BAPCPA bubble in 2005.  Yet, the Mortgage Bankers Association announced a new all-time high for mortgage default or foreclosure rates in home, with the combined rate coming in at 9.7%, with expectations it will exceed over 10%.

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Data supports that bankruptcies will be on the increase as delinquencies continue and more people find it impossible to pay their mortgage and credit cards. The sluggish economy offers no immediate solutions as job creation continues to be anemic.


While being interviewed on a radio show this morning, the host asked me if I had known someone or had ever been bankrupt, something I referred to in my book, and quite frankly forgot about.  I replied, "Yes, it was me that was bankrupt or I should say my ex-husband to whom I was married to at the time." Of course, the bankruptcy affected us the same, where we went from having a lot of money to having none.





Having been through the process and re-building my own life, I have the following tips for surviving a bankruptcy and/or home foreclosure:


  • Having no money sucks!  So it's best to admit this to yourself and get over it.  Once you acknowledge you have to declare bankruptcy, or set up a payment plan you can afford, or give up your home, you can start the road to recovery


  • Contact a qualified bankruptcy attorney whose fees are commensurate with their work and typically set by the court.  They will help you determine what you are allowed to keep in a bankruptcy, what the repercussions are as to future credit and if you can avoid bankruptcy and settle with some of your creditors.


  • Having financial issues tears away at your marriage, family, and your self-esteem.  Divorce often accompanies financial loss.  I recommend you seek resources to help you on a personal level through your church, synagogue, therapist, and supportive friends.


  • Don't let bankruptcy define who you are and what skills you offer.  Consider it a very large bump in the road, yet not one that will stop you from rebuilding your life.


I was 32-years old when my ex filed for bankruptcy.  We divorced, left me with debt, no credit (not bad, just none), and no job.  We lost our house, our cars, our possessions and our marriage, which turns out wasn't so good, anyway. I did have a $40k settlement that I was able to keep from a tax refund.


Not a very great place to be in your early 30's, but it could have been worse.  Really, I had my health, friends, family and confidence that I would be okay.  My words to you all that are terrified about your financial future are to face the issues and know you are going to be okay, too.


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