Last week I decided to declare chpater 7 bankruptcy. I was talking with my sister on the phone. It was one of our many conversations about our money problems. i thought it would end in the usual way, with one or both of us saying, “we’ll get through this, we’ll find a way to pay our creditors…” But this conversation was different.

She told me she had hired a bankruptcy lawyer and was going to file for chapter 7 personal bankruptcy. She told me the bankruptcy law was changing October 17, and that if you get your court papers filed before then, all your unsecured debts can be wiped out, expunged, or what the government calls “discharged.” But after October 17th, a new law goes into effect which makes it harder to get your debts discharged, and which forces debtors to pay more of their debts back. So the clock was ticking.

It wasn’t an instant decision. I didn’t know right then what I know now–that bankruptcy would be the right solution to my money problems. At first I was merely intrigued by the idea. I thought, “hmm, I wonder if it would be right for me, too?”

So I went out to my local Barnes and Noble and bought the Nolo book entitled How to file for chapter 7 bankruptcy. I read the book voraciously, trying to get my head around what filing would mean for me and my financial life.

Chapter 7 bankruptcy can stay on your credit report for up to 10 years, though it is possible to get a competitively priced large loan after about 4-5 years of steady credit repair and perfect credit behavior. So it is most definately a mark on your “record” but it’s not a permanent mark. I realized I wouldn’t be able to get a credit card for a while–maybe a couple of years. But then I thought, “I can’t use any of my cards anyway. I’m months late and over the credit limit on several of them. I have already ruined my credit score. At least by filing bankruptcy, my debts are gone, leaving me with a fresh financial start, without the burden of having to repay those debts, which are cumulatively the worst mistakes I ever made. I am glad people are allowed to file bankruptcy. I needed a fresh start, a chance to prove myself, a new phase. Filing bankruptcy will allow me to write a new chapter of my life; it will be a story about a guy who was given a second chance, and who made better decisions the second time around.