Understanding why I went bankrupt

KeepOnKnitting

I am just filing some post and having a tidy of paperwork, and I decided to go through some of my bank statements and credit card bills from before bankruptcy. As a rough timeline, things got worse in 2013, I made token £1 payments in 2014 before eventually going bankrupt in 2015.

Looking through my statements, I was spending stupid amounts on petrol, just getting to work on a daily basis. Purchases are mostly food shopping. I rarely took out cash on my credit card. I was paying my bills with the credit card.

Then I started to tally up the amount I was getting in charges each month in 2013. Three bank accounts with overdrafts. Two of them charged me a pound for each day I was overdrawn. The other was charging me £25 for each payment that didn't go through, £20 for arranged overdraft, £30 for unarranged, £5 for underfunding and so on. The credit card was adding over £100 in interest each month.

I was probably getting charged over £200 each month. All while earning minimum wage and working 50-60 hours a week trying to keep my head above water, all of that work relying on travelling in my car and spending more on petrol, eating more supermarket sandwiches just to stay alive. I would nap in my car between work shifts to avoid driving home.

The straw that broke the camel's back was the repossession and auction sale of my flat in 2015 for just over half of my purchase price.

While reading, I was starting to feel a bit angry about how ridiculous the whole situation was, especially now I can see it with hindsight. Maybe I could have repaid it, if I had ever stood a chance. But in the end, actually reading those old statements has made me feel like I should let go of the guilt I felt about going bankrupt. I could maybe have dug myself out of that hole, but the institutions themselves made it impossible. I could never pay off the debt when every month the debt grew just from huge charges and massive interest payments. With the mortgage, perhaps letting a 21 year old take a mortgage at 100% in 2006 wasn't a great idea.

Maybe all the companies I stiffed when I went bankrupt are as much to blame as I was.

MEM62

I am sure that going bankrupt is a very emotional journey.

Having read many peoples' stories on here there does seem to be a common thread in many of them. That is, once in a small amount of financial difficulty, many keep digging until the hole swallows them up. With some of the stories I am left with the feeling that, if they had addressed the issue earlier or differently, their situation would have been recoverable. Loans to repay loans (particularly payday loan cycles), debt consolidation at high interest rates and paying bills on credit cards are common themes. Having never been in that situation I do not have an appreciation of how an individual's thinking works in that scenario but I guess it is difficult to recognise when you are in that spiral and deal with it early enough to recover the situation.

There are, of course, other scenarios that lead to BR where circumstances are completely outside the individuals control. Business failures and divorce in particular can have dramatic consequences.

With many of life's worst event's it is easier to deal with if you can find someone or something to blame and I think that it is natural for all of us to do that. I have certainly done this in the past. However, sometimes you just have to accept that stuff happens and you are in the situation that you are in. The important thing is to deal with it, make your peace with it, draw a line and look forward. No point in having a miserable future because you cannot let go of the past.

terrence45

Don't feel guilty for going bankrupt - as much as society/the media/Monopoly/whatever attaches a deep moral element to it, it is a legal decision and we should be grateful to have it as a tool at our disposal.

Our economy, and the luxuries we have like mortgages, loans, credit cards et, wouldn't exist if it weren't for bankruptcy and other debt solutions, as not everybody always gets lucky - I'm sure many perfectly innocent people got into deep financial trouble when the credit crisis hit, and I'm sure others made a mint out of it. These things are mostly out of our control.

Sure, some things are in our control - maybe you could have repaid your cards, retrained or got a new job, or started debt management sooner. You didn't, but who cares... you're debt free now as am I. Rather than feeling guilty I feel very lucky to have had the opportunity to start over and to have learnt so much. I'll never get into the kind of situation I was in again. I'm debt-free and saving for the first time since I started uni.

And of course, it's a cliche but worth remembering that there are always many people worse off them ourselves