Bankruptcy made me a better person

On my birthday in 2010, I appeared in front of a judge in the US District Court of Northern California and had my Chapter 7 Bankruptcy recorded. I walked out of that room, no longer in debt and no longer a homeowner. My last landlord had told me “I have never seen a credit score that high”. Those days were gone.

The years that led to that day were a blur: the housing crisis, the financial services sector meltdown, Obama’s election, the Great Recession. Almost two years before I stood in front of that judge, my credit union was consumed in a forced merger and I played my part to merge systems and data before the VP of HR took me to lunch on the last day of 2008 to trade my security badge for my final check.

I started 2009 as an out-of-work banking executive and spent the next eight months diligently searching for another job. Historic unemployment, especially in the banking industry, worked against me. Any new posting received hundreds of applications. Recruiters used simple rules like “only look at candidates who already have jobs”. I got told bluntly that having previously been in leadership, I would not be considered for Manager roles - and for Leader roles, I was competing against candidates with significantly stronger resumes. As summer wound down, I accepted that I would not be able to keep my house.

I found a bankruptcy lawyer. At our appointment, I answered her questions and listened to her advice then signed paperwork to start the process. She gave me two books to read, one of which stated boldly on the first page: “filing bankruptcy does not make you a bad person”. I needed to read that, yet it provided some odd combination of a stomach punch and a wave of relief.

I then entered The Big Wait, wondering when my mortgage company would foreclose. I made my car payments, paid for utilities and insurance, and bought food, existing in limbo for almost a year. Once the foreclosure notice arrived, everything took off like a rocket and less than two months later, I stood before that judge. The following month I was evicted, slept in my car for a few nights, and settled into a new rental to begin rebuilding my life. Two years later, my credit score was in “Average” territory, and I was regularly offered credit, although at higher rates.

With a career in the credit union industry, I was never bothered by the presence of a bankruptcy on a member’s credit report. It was just a data point in the calculus for lending decisions. When it was someone else, bankruptcy really didn’t mean anything. For myself, however, it felt like a failure. It meant not making good on the agreements I had made with lenders. I was not a man of my word. That book my bankruptcy lawyer had given me, telling me I was not a bad person for doing this, was like hearing a sane voice speak truth to the insanity of my financial situation. It helped, but it still took time to sink in.

Until the summer of my bankruptcy, I told very few people what I was going through. While partially due to the embarrassment I felt at my “failure”, mostly this was because I needed to be able to go out without people seeing me and responding with pity or judgement . “Oh, there’s Russ - his life is crap these days - let’s buy him a drink and see how he’s doing”. Not being public about my challenges avoided those moments but if someone asked pointed questions, I shared my story. I would choose that behavior pattern again, and now having gone thru the process, bankruptcy has lost most of its sting. Even better, today I can easily see how it made me a stronger and more compassionate person.

Still, when I mention that time in my life, it usually starts with the sentence “in 2010, I field bankruptcy ON MY BIRTHDAY”. For obvious reasons, that is not voiced without emotion. Being able to see how something difficult was pivotal, helping make a better future, doesn’t take away the pain or grief of that transformation. To anyone else having to take those steps, however, I am a willing sounding board or shoulder on which to cry. If I offer to buy a drink and find out how you’re doing, there is no pity or judgement behind my eyes - just a person who’s been there too.