3136: Bankruptcy and Debt: You Can Come Out Stronger in the End by Tracie with Jackie Beck

[00:00:00] ServiceNow unterstützt Ihre Business Transformation mit der KI-Plattform. Alle reden über KI, aber die KI ist nur so leistungsfähig wie die Plattform, auf der sie aufbaut. Lassen Sie die KI arbeiten – für alle! Beseitigen Sie Reibung und Frustration Ihrer Mitarbeiter und nutzen Sie das volle Potenzial Ihrer Entwickler. Mit intelligenten Tools für Ihren Service, um Kunden zu begeistern – all das auf einer einzigen Plattform. Deshalb funktioniert die Welt mit ServiceNow. Mehr auf servicenow.de slash AI4People

[00:00:30] Hey Sandra, wir haben uns ja lange nicht mehr gesehen. Grüß dich Nadine! Mensch, du siehst ja toll aus! Ja danke! Ich habe mein Plus fürs gesündere Ich entdeckt. Was? Komm, ich zeig's dir! Die Bewegungskurse der AOK Plus. Kostenfrei für AOK Plus Versicherte. Entdecke dein Plus fürs gesündere Ich und starte mit unserem Selfcheck. Ganz einfach online auf AOK.de. Aus Liebe zur Gesundheit. AOK Plus.

[00:01:00] This is Optimal Finance Daily. Bankruptcy and Debt. You can come out stronger in the end. By Tracy with JackieBeck.com. Wherever you look online, you're sure to find many resources that have the steps and tools you need to get out of debt. While I'm sure that they're able to help you out, I wonder if they really understand the toll debt can take. Have they been there?

[00:01:26] I wonder, even more so, if they know what bankruptcy feels like. I'm not sure that I feel I can relate to anything they say as they're not me. You see, I'm one of those people. I've declared bankruptcy. My husband and I have even paid off our current debt with blood, sweat, and tears, and a lot of determination. I'm sharing my story with you to let you know that there are people who get it.

[00:01:51] It sometimes helps to know that you're 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 I 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. I made the minimum payment each and every month.

[00:02:21] 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.

[00:02:50] I wiped the tears from my face and vowed to leave that in the past and focus on my new 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.

[00:03:15] We realized that this might pose a slight financial strain upon us, but 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.

[00:03:43] 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, we were inspired to get started.

[00:04:12] 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? 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.

[00:04:41] 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, and 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.

[00:05:10] 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's no such thing as good debt. I'm proud of so many accomplishments in my life. My husband, my kids, and my sight. But I'm 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.

[00:05:40] 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's how I pay. We still don't have debt and do not plan on heading down that path again. We fully funded our emergency fund. We've been able to do things that we want to.

[00:06:09] When you don't 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's possible to do this. I want you to know that I understand where you're 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. You just listened to the post titled, Bankruptcy and Debt.

[00:06:40] You can come out stronger in the end. By Tracy with JackieBeck.com. The origins of this podcast were once just a dream. That dream turned into the podcast and business you're listening to today. Starting your own business is a dream lots of us share. But too many of us let it remain just a dream. Don't hold yourself back thinking, what if I don't have the skills? What if I can't do it alone? Turn those what ifs into why nots with Shopify by your side.

[00:07:09] Shopify powers millions of businesses worldwide and handles 10% of all e-commerce in the U.S. From household names like Mattel to brands just getting started. Build campaigns that reach customers wherever they're scrolling. Plus, Shopify's expertise covers everything. Inventory, shipping, returns, and beyond. If you're ready to sell, you're ready for Shopify. Turn those dreams into...

[00:07:37] And give them the best shot at success with Shopify. Sign up for your $1 per month trial and start selling today at Shopify.com slash OFD. Go to Shopify.com slash OFD. Shopify.com slash OFD. When investing your money starts to feel like a second job, Betterment steps in with a little work-life balance.

[00:08:03] It's the automated investing and savings app that handles the work so you don't have to. While they build and manage your portfolio, you build and manage your weekend plans. While they make it easy to invest for what matters, you just get to enjoy what matters. Their automated tools simplify the complex and put your money to work, optimizing day after day and again and again. So go ahead. Take your time to rest and recharge.

[00:08:32] Because while your money doesn't need a work-life balance, you do. Make your money hustle with Betterment. Get started at Betterment.com. That's B-E-T-T-E-R-M-E-N-T dot com. Investing involves risk. Performance not guaranteed. Bankruptcy tends to carry a lot of shame. I think of it as the herpes of the financial world.

[00:09:00] I say that because to many medical professionals, herpes is one of those things that's incredibly common and pretty easy to treat, but carries a ridiculous amount of shame. When you consider how many corporations utilize bankruptcy without shame, perhaps individuals should reconsider this option. I look at bankruptcy as a tool, and just like any tool, it should be deployed in only certain circumstances.

[00:09:26] Typically, if your debt is going to take you longer than seven years to pay off, which is how long your credit will totally suck after Chapter 13 bankruptcy, you could be a good candidate for bankruptcy. Also, if you're out of other options and would be forced to use your retirement savings to pay off debt, bankruptcy should be a consideration, especially if you're older.

[00:09:49] But I think before considering bankruptcy, evaluate the reasons why you're in this financial position. Many bankruptcies are due to things like medical bills, not improper money management, and there is nothing the individual could have done to avoid it. In the case of the author of this article, it sounds like it was more due to living outside her means.

[00:10:13] The danger in declaring bankruptcy in this case is that you're unlikely to learn the money management skills you need to avoid getting back into the exact same position. And this is demonstrated in the author's story. She got out of debt through bankruptcy and then proceeded to go right back into debt that she had to dig out of again with her husband. The benefit of getting out of debt the hard way through budgeting and throwing as much money at your debt as possible

[00:10:42] is that it forces you to learn money management skills. And these are skills that will serve you for the rest of your life. And that will do it for today. Have a great day and start to your weekend. Thank you for listening. And I'll be back here reading to you tomorrow where your optimal life awaits.