contemplating bankruptcy at 26yrs old
I have never felt more like a failure than when I logged in and saw "past due" and "sent to collections" on every bank account I had. The immediate sense of shame that pierced my heart was almost too much to bear.
HOW THE FUCK DID I LET THIS HAPPEN!?
I shouldn't act surprised, I know exactly how it happened; I didn't make my payments, didn’t even look at the accounts because I knew it wouldn’t be good, and now here I am — $37k in debt and credit card companies harassing me daily.
Defeated. Depressed. Discouraged. At 26 years old.
When I got my first credit card at 18, I didn't think I'd be considering bankruptcy 8 years later. When I was approved for my first loan with a 0% APR, I thought I won. First, I couldn’t believe filing for a loan was so…easy, and second, I couldn’t believe I wouldn’t be charged interest!1 When I was approved, I didn't think I'd be scraping coins together years later just to pay a $12 bill, let alone my $200/mo payment for the loan.
When I opened these accounts, I was sitting pretty for my age. I had a decent job, was financially independent, and paid everything on time. I even had money left over at the end of the month to spend on myself! But then I started opening more credit cards because society showed me that credit was the way of the game. You have to use credit cards to boost your credit score so you can one day buy a house or your dream car! Most people I knew had at least one credit card, so rack up credit I did. I used those cards for bills, gadgets, vacations, helping loved ones, you name it. The more I used my credit cards, the higher my score went. Slowly, but it went up.2
Flash to seven years later, and I decided to take a chance on myself and start my own business: Moonbeam Essentials, a small-batch herbal apothecary. Right off the bat I experienced instant success, thanks to TikTok. What does a girl do that's gone viral for the first time and received $5000 worth of sales in the span of four days? She quits her day job to work on her business full-time. Hindsight, that was the dumbest yet best decision I have ever made.
The instant success quickly turned to instant failure when I got behind on the 100+ orders that came through. Doing everything by myself with order after order coming through, one day processing times quickly turned to >four week processing times. One lady literally threatened to file a claim against me in court because I was taking so long to ship. Geez lady… that one still stings…
Queue in the self sabotage.
I got in my head because of the delay in shipping orders, which started the procrastination, which led to the stagnation of sales and things just getting worse and worse and worse. Queue in inflation. Now zero sales are coming in, bills are falling behind, and my credit score is tanking. How the fuck am I supposed to pay my Discover Card bill when I can barely afford to feed myself?
The mental toll this took on me was horrendous. When you go the majority of your life being independent, it gets harder and harder to ask for help. When you're surrounded by people with money, it gets easier and easier to compare yourself. No one knew my situation. I let myself suffer in the dark to save face. I was embarrassed, ashamed, and terrified of the assumed judgment.
If my partner didn't randomly bring up bankruptcy two months ago, I would still be in the closet with my money troubles. Thank God for that conversation. The relief I felt when I told him what I'd been going through yet hiding, was weight-lifting. The shame I felt when I realized I didn't need to hide, was deep. You know how much time I could have saved if I had just said something earlier!? Ugh. The love I felt when he didn't judge me and told me things would be okay, was intense. That conversation was the start of many things:
doing shadow work on my relationship with money
doing shadow work on my mindset with owning a business
revamping my business strategy
calling the banks to discuss settlement options
filling out bankruptcy papers
shredding all my credit cards (burning them would have been more symbolic but they burned weird when I tried, so I decided to shred them)
feeling sane again
Contemplating bankruptcy has shown me how fucked the system is. Credit cards are shoved down our throats at such a young age, yet we're taught nothing about handling money successfully. The top three credit bureaus are supposedly the crux of our financial livelihoods, yet we actually have thousands of scores we don’t know about that are all based on different criteria. The banks are built on the backs of us failing and maxing out on our credit limits and keeping high balances and over-drafting, so they can take more of our money! We're shown that bankruptcy means failure, yet it allows everyone a fresh start when debt gets out of control. Bankruptcy isn't a bad thing, it's an option out of the system. It's a new beginning.
With this new beginning, I say fuck credit. Fuck debt! If I don't have the cash for what I want, then I don't need it! Money is a tool that we all deserve abundance of, but credit and debt is not the way. Credit will not get me to my financial goals, cash will. With this new beginning, I now have the mental capacity to focus on my business goals. I now have the mental freedom to create.
It's my time to shine!
This was a promotion and only lasted for the first 12 months of paying back said loan.
What a fucking scam that if you pay shit back on time, it barely boosts your score, but if you miss a payment, your score drops dramatically.