Bankruptcy and Debt: You Can Come Out Stronger in the End

by Tracie of Penny Pinchin' Mom

Bankruptcy and Debt:  You Can Come Out Stronger in the End

Wherever you look online, you are sure to find many resources who have the steps and tools you need to get out of debt. While I am sure that they are able to help you out, I wonder if they really understand the toll debt can take? Have they been there? I wonder even more so if they know what bankruptcy feels like. I am not sure that I feel I can relate to anything they say as they are not me.

You see, I am one of those people. I’ve declared bankruptcy. My husband and I have even paid off our current debt with blood, sweat, tears — and LOT of determination. I am sharing my story with you to let you know that there are people who get it. It sometimes helps to know that you are not alone and there really can be a light at the end of the tunnel (no matter how long that tunnel might be).

From loving life to bankrupt

In 2001, I was loving life. I was approaching my 30s and had a great job. Sadly, I didn’t pay that close attention to the items I purchased with my credit cards. I just kept doing what so many Americans do – made the minimum payment each and every month. In December of that same year, I received a shocking wake up call. I was ending a long term relationship and was no longer able to make ends meet. I knew that something had to change, but being young (and still pretty stupid), I did what I thought was the only answer — bankruptcy.

In August 2002 it was in print. I was officially bankrupt. It was not a good feeling. I was ashamed that I had allowed myself to get into this situation? I wiped the tears from my face and vowed to leave that in the past and focus on my life — a new life with my new fiancé.

Starting over

June 2003 we said “I do.” We were both in our 30s and knew that we wanted to start our family sooner than later. Another thing we both agreed upon was that I wanted to be a stay at home mom and raise our children. We realized that this might pose a slight financial strain upon us, we knew it was worth it for our children.

Money was tight after our daughter was born; however, we never used credit cards to pay bills – not even groceries. We had accumulated some debt which included auto loans, a home equity loan and one department store credit card. While we struggled to make ends meet some months, we still managed. Not sure how, but we did.

Discovering Dave Ramsey and making changes

In the fall of 2007, some friends shared their own debt free journey with us and we learned about Dave Ramsey. The more we read about his methods, the more intrigued we became. We both thought the idea of not having debt was incredible, but weren’t sure we had the means necessary to achieve that goal. So we bought his books and sat down and read them cover to cover and within a few days and were inspired to get started!

We changed our way of living. I did the same steps many others have done – right down to cutting up those credit cards and using only cash for everything. The toughest thing for us was that budget. Ugh – a budget. It can make you sick to your stomach. We had to keep tweaking it, but we got it to work. How?

We reduced our grocery budget and then used extra money to pay down debt. Part of doing so was to find a way to save more money at the store. Through learning to do so and sharing these tips with friends and family, I started a blog. As I shared my deals, we continued to pay down our debt. We sold items. We didn’t eat out.

The most liberating feeling

Finally – in February 2010 – we made our final debt payment! It was liberating. I can’t describe the feeling. This time around I did it the RIGHT way. I didn’t just run from my debt. I faced it head on – with my husband. We paid it all down. It took us 27 months, but we did it. Paying off our debt was truly the most liberating feeling in the world!! As part of our journey, both my husband and I learned our most important lesson “There is no such thing as good debt.”

I am proud of so many accomplishments in my life (my husband, my kids and my site), but I am also very proud that I was able to actually pay off that much debt. When I say that this was life changing – it truly was. Not only did we pay off our debt (other than our mortgage), we permanently changed our way of living.

To this day, we still use the same budget form. We check and update it regularly. We still use cash — and use our envelopes. If you ever catch me shopping at the store, you will see that is how I pay. We still have no debt – and do not plan on heading down that path again. We have fully funded our emergency fund. We have been able to do things that we want to. When you do not have debt, your money is all yours.

You can do it

I share my story with all of you so that you all know that it is possible to do this. I want you to know that I understand where you are at – more than most of you probably ever realized. If you want to change your life, you can do it. But only you can make the decision to change your life – for the better!

Tracie shares her money saving tips and ideas daily at Penny Pinchin’ Mom. She is featured regularly on her local CBS Affiliate – KCTV5 – helping local families learn how to make the most of their own budget. When not busy saving money and helping others, she is a mom to 3 kids, ages 4 – 8, at her home outside of Kansas City, MO.

Posted in Debt Free Stories | 7 comments.

7 Responses to Bankruptcy and Debt: You Can Come Out Stronger in the End

  1. My wife and I never got into serious debt. But when we married, we had zero. Nothing. And it was hard. We both went from living at home and not saving or needing anything, to living together and suddenly realizing that savings was something we needed and that we would have to start paying for stuff ourselves. Bummer! Haha :-) We both had very low paying jobs, but it’s amazing what you can do when you put your mind to it. People get so used to eating out and buying stuff… get past it people! You don’t need that stuff and you’ll save LOTS.

    • Tracie says:

      You are so right! I know someone who refuses to work herself out of debt because she has to give up dining out. Once you overcome that need, you will be amazed at what you can do.

  2. My mom absolutely LOVES Dave Ramsey, she used to teach it to some of her students. My girlfriend and I have used a few of his methods to help us get our budget under control and start working toward paying off our debts. Your story is inspiring. Thanks for sharing.

  3. Dave Ramsey was the source of our inspiration too. We listened to his Total Money Makeover CD-book and were hooked instantly. A year later, we can’t believe the progress we’ve made. But reading your post makes me think we can dig deeper – try to save more on groceries; resist any outing that involves spending; use cash exclusively. I was relieved to read that budgets made you “sick to your stomach.” The testimonials about budgeting in Ramsey’s book are so upbeat – but our experience with budgeting is more like yours. Thanks for sharing so openly. I have no doubt you’re helping a lot of people to take that next step in their journey out of debt – including me.

    • Tracie says:

      You are so welcome – and you can do it! I think that so many times things seem so sugar coated and they don’t really say it like it is. It is not fun – until you don’t have the debt. Then that is LOT of fun! Financial freedom is an amazing feeling and going through what we did makes it even sweeter.

      Goodluck on your journey as well!!

  4. Awesome accomplishment that not many can pull off. Your next challenge is financial wealth and independence. Go for it and good luck to you!