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I Never Want to Have Credit Cards Ever Again After Our Bankruptcy. – Denise

Written by Steve Rhode

“Dear Steve,

In June 07′ my family moved back to Iowa from CA after my mother passed away,

I used my inheirentence money to purchase a home on 5 acres. We remodeled the house and i had put the majority of my money with a local investor through the bank I had my mortage.

To make my story short, the contractors bids went over, and in then the market tanked in 9/08, so I lost the nest egg( $34K) that would have paid our constrction overage and been able to have the reserves that the bank wanted to refi my 1st and the construction loan.

They did not care that there inside financial investor guy lost my money. I trusted him since he is licensed?

So I got a attorney to work with my bank on the 2nd, my father-n-law ended up buying my 2nd note less $25k from the original amount.

I was going to make payments to him for 12 months and then refi both notes into one loan. So we used our credit cards to purchase our propane, pay our contractors, and some how w e were able to make the minimum payments.

Then in the winter of 09′ my daughter (9 yr old) was hospitalized for 4 days due to severe respitory infection. My bill when she was released was $4,999, and my health insurance deductible was $5,000. So i made payments to the hospital now, then I needed surgery for a bulging disc in my neck the following december 2010, again paying my $5,000 deductible and 20% co-insurance.

Well at this point I was scraping by, calling my credit card companys and negoitiating interest rates and payment plans. I got them to work with me for 6 to 12 months, and 3 accepted a payment plan for 60 months. Everything was ok til July of 2011, my husband then needed alcohol treatment and was at the local VA for a month and 1/2 going through detox.

That is when my world changed, and knocked me down and out. I was left with my income, and had to go get assistance for food stamps and electric bills. I was so embarassed to get public assistance for the 1st time ever!

Well ever since then its been a huge financial stuggle. We have never really recovered from it, I worked 2 jobs and I was so run down, I was not doing well with my primary job. Husband has been back to work, but we are so far behind – i tried to negotiate with my credit card companys and be honest about our finances, they were impossible, so I just quite paying them.

This past October 2012, I finally got the courage to meet with a BK attorney, I felt I was at my lowest at this point. And he explained the process and gave me all the paper work and charged me $140 for his time. Today I hate having to owe my faher-n-law money on our 2nd, we are overdrawn with our bank all the time. I need to get out of this financial nightmare!!!!!!!!!!!!!

If we file for the BK7( include our credit card debt & medical debt) , i was assured that we can keep our car and home (still have loans on them) Will we be able to refinance our mortage 1st with Iowa state bank & 2nd with my father-n-law and get a lower house payment, and how lomg would we have to wait? 1 yr – 2yrs to try. Or will we be cursed with the BK over us for 10 years?

I don’t ever want to have a credit card, I have closed all of the ones i owe on. I want to feel normal and not worry constantly.

Please help me understand if the BK would be my best and only solution?


mother and son

Dear Denise,

First, let’s tackle your statement “I don’t ever want to have a credit card, I have closed all of the ones I owe on.” I understand how you feel but closing cards and avoiding credit in the future is the exact wrong this to do. It’s not the credit card that was the problem. It was the debt.

If you can own sharp knives for your kitchen and not kill people with them you can have credit cards and not go into debt.

Without a good credit score, which you will need to rebuild, you won’t be able to get the lowest mortgage rates in two years.

Don’t operate from assumptions and emotions here. Operate from education and facts.

It sure sounds to me as if you are so far in a hole with all this debt that bankruptcy sounds like a reasonable way out and a fresh start you are eligible for. Your local bankruptcy attorney seems to have covered the bases with you to file bankruptcy but for whatever reason you just didn’t move ahead with it.

I would suggest you go back and get the ball rolling with the bankruptcy attorney you have already selected.

The links below, especially on rebuilding your credit, will be key in helping you recover and move forward.

Bonus Video Answer

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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