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I Filed Chapter 7 Bankruptcy But I’m Scared What I Will Face. – Lee

“Dear Steve,

I racked up lots of credit card debt going through college and graduate school. I have always been able to make miniumum payments and still had good credit. I now have $60,000 in credit card debt, $30,000 in school loans, and I had just bought a new car two years ago. I don’t make very much money so I would spend my whole paycheck paying bills, then live off my credit cards. This cycle would never end unless I made more money. That hasn’t happened yet. In fact I now make $20,000 less after this whole economic land slide.

I finally decided to file chapter 7. In order to file, I had to not pay my credit card bills for 6 months. I have never done that before so it was scary and made me feel pretty awful, but I could live off of my paycheck without using any credit cards for the first time.

Now that I am about to file chapter 7, I am terrified I am ruining my life and second guessing myself. What challenges will I face? I am so afraid I won’t be able to get new jobs, despite have a Ph.D., or get a good rate on car insurance or be able to buy a home.


Dear Lee,

The reality is that not much bad is going to happen, if anything at all.

I can confidently tell you that the biggest hurdle you will need to overcome is to forgive yourself. The self-inflicted emotional pain is the most debilitating facet to deal with. Everything else is actually fairly easy.

After bankruptcy your credit can be rebuilt, you will actually be able to save for a down payment and get a mortgage in a year or so, the chances of being rejected for a job because of the bankruptcy are slim to none, and as your credit improves your rates on everything will go down.

Just because the process is scary and intimidating does not make it the wrong solution for you. As you go along and if you get spooked or freaked out, come back here for support and guidance. I’m here for you, really.

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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.


  • I am in the same situation with Lee. I never filed bankruptcy before and I am so scared and guilty. I keep blaming myself that I make the wrong decision to file bankruptcy.

  • I am in the same situation with Lee. I never filed bankruptcy before and I am so scared and guilty. I keep blaming myself that I make the wrong decision to file bankruptcy.

  • Don’t let your guilt let you make a bad decision and punish yourself for years when a legal fresh start is at hand.

  • Wow this really makes me feel better. I am thinking about filing chapter 7, but I have a foreclosure and repossesion on my credit. I feel so guilty about ruining my credit by making dumb decisions but everyone is telling me to file. I really want to make a good decision and not listen to anyone else. I am feeling so guilty about my mistakes in the past and I need to just get over them and start fresh.

  • This was me in 2004 and I had to file for Chapter 7. I got a discharge in 2005. Up to that time I struggled for 4 years to avoid BK at all costs and looking back afterward I can say it was the best thing that I could have done. I was debt free, had a fresh start, had credit offers within the first year, never faced trouble finding a job over it, and even got 2 loans (though not at the lowest interest available) within a year of it. My terrors at being humiliated at the meeting of creditors was unfounded as none of them showed up. The whole process took less than 5 minutes. It will change your life in that it will relieve you of unbearable pressures, free you up to have a life, and give you hope for a happy future. Go for it and feel no shame. You are now in the majority of folks rather than the minority, especially in this economy. Good luck!

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