By: Angela Caban, 2013 Armed Forces Insurance New Jersey National Guard Spouse of the Year
It’s not any easy story to tell, but it’s our story.
Outside of one good friend and a handful of family, nobody knows that in 2012, just a few short months after the birth of my daughter, my husband and I filed for bankruptcy. It feels good to type that and say it out loud because no matter how embarrassed we once felt, there is absolutely not one thing I regret about it happening. We needed a swift kick to realize that we simply could not continue living outside of our means. Bankruptcy saved us.
This will be the first time I have spoken about it openly.
Social media. Its picture perfect, isn’t it? No one knew the struggle we were having paying our bills, and no one knew that my husband had lost his job just a few short months before having my daughter. Facebook friends only saw the happiness of the birth of our daughter; they saw the excitement of my upcoming graduation after working so hard for years towards my Master’s degree. We kept it all quiet for fear of worrying others and pure embarrassment. I would never want anyone to think my husband was not capable of supporting his family, and frankly, I didn’t want to hear the opinions of others as well as advice on what we should do. I didn’t want to hear any of it.
Our world was falling apart.
We slowly depleted both savings accounts as my husband was not receiving any calls back for work. I was already into my last semester and could not pull back from my studies; I had worked so hard to reach that point. Working full-time and continuing my studies was difficult, especially when my husband was away for duty. But he assured me we would be okay and that I could not quit, he simply would not let me.
Although I had money coming in, it was going out even faster. Rent was due, car payments needed to be paid. Credit cards, student loans, food bills, diapers, formula, the list went on and on. We desperately tried to cut expenses.
We were too late. We couldn’t breathe. We were constantly at each other’s throats and, at one point, I was considering separation because we didn’t seem to be on the same page of what we should do to help us get ahead.
It’s crazy what added stress of money can do to your marriage, it was controlling us and we didn’t know which other way to turn in order to make it out alive.
We were trying everything to make it work.
My husband frantically asked his National Guard unit for Active Duty Special Work (ADSW) orders, without telling them we couldn’t afford to pay our rent. It helped us for the month but it was just a temporary fix for something that was much bigger. We even discussed him going active duty, a paycheck of some sort was better than nothing at all, but it was too late.
A week after he returned from training we were summoned to court. We were being evicted and if the full balance of three months past due rent was not paid, we would be locked out of our home. In other words: homeless.
How could this be happening to us? Our family was falling apart and we were busy playing the blame game. It wasn’t healthy; it wasn’t what we wanted.
A week before our court date, with absolutely no way of knowing how we would afford to pay our rent, we received a dozen letters from attorneys on how bankruptcy could help us from being evicted as well as having our two vehicles repossessed.
My husband immediately dismissed the thought of bankruptcy and didn’t even want to think about it. I spent hours on the phone that day with different financial counselors and they all said the same thing; bankruptcy was a real option. I was terrified at the thought but I kept doing research.
I spoke with an attorney about Chapter 13 which would allow us to keep all our assets and pay a monthly installment to all our creditors. This seemed like the help we needed: wipe the slate clean and pay everyone back within the four year plan. After sitting in a financial counseling session with two attorneys’ and a financial counselor, we made the decision to file for Chapter 13 bankruptcy.
Now we had a chance.
While we got a fresh start, we weren’t off scot-free. There was a repayment plan to each creditor we owed a balance to and the monthly payment was made to a state trustee. My husband needed to secure employment in order to maintain our monthly payments. Thankfully, just a short month later, he was offered a job and is still there to this date.
We trimmed plenty of costs around the home; no more eating out, no more credit cards. We froze them all. We cut our cable, sold one of our vehicles and starting meal planning to help reduce the food bill. We made it out alive and were the family that we wanted to be with the bonus of knowing we had to be financially smarter. It felt like we got a second chance to make better decisions for our family. I am so grateful for that, and for the lessons we learned along the way.
We were able to save and had our bankruptcy paid off in exactly four years. But we still had a lot of work to do after the discharge; financial counseling, rebuilding our credit and controlling our spending. Those irresponsible mistakes we once made ended up giving us the financial freedom we needed.
Five years later, we are sitting in our recently purchased home with financial health like we have never had. If you would have asked me back then if we could be where we are now, I would have laughed. The day we bought this home I cried. It was a hard, long journey, but we got that swift kick and learned so much throughout the process. We are smarter, and our family is stronger because of it.
4 Tips from Angela for Families Considering Bankruptcy
Do Research and Know Your Options. Have you tried your absolute best to cut expenses and pay off debt? Talk to your creditors and see if there are any payment plans or lower interest rates available. Bankruptcy should be treated as a last resort option since it does have consequences for your future credit ratings and military career. There are resources for military families who are considering filing bankruptcy on USCourts.Gov/services-forms/bankruptcy. Remember, this isn’t a get out of jail card. You still have responsibilities to pay current creditors.
Get Financial Advice. Speaking with a professional can help you get a good look at your situation. They will lend you a good perspective. They will be able to talk with you about other options and even create a customized plan to help you get out of debt.
Organize Your Debt. If you have decided that bankruptcy is the only option for you and your family, you need to know exactly what your debts look like. Make a list and with each debt that you are including in your bankruptcy and ensure you have the latest statement. You will need to provide a copy to your attorney and in court.
Seek Professional Council. Filing for bankruptcy is a timely process and one that should be handled by a professional. There is a lot of paperwork that is involved, which is why you want to find a law firm that has plenty of experience and can represent you throughout the process. Visit findlegalhelp.org to browse through attorneys in your area. Remember that your attorney will be with you throughout the entire time it takes to complete your bankruptcy, so read up on their history and how others have felt about working with them.
Angela Caban is an Army National Guard spouse, published author and Community Manager for USAA. Her life experience with personal finance issues inspires her writing in hopes of helping other families facing financial difficulties. She was named the 2013 Armed Forces Insurance New Jersey National Guard Spouse of the Year. Angela founded the Homefront United Network, a military spouse and family support blog created for those who do not live near an installation, but also focusing on bridging the gap between the reserve and active duty communities. She has a Bachelor’s in Business Administration and a Master’s in Human Resources. Angela resides in New Jersey with her husband and two children.