What It Feels Like to Declare Bankruptcy, and How to Recover From It

Three years ago I was roughly $130,000 in debt while earning a whopping $28,000-a-year salary at a retail job as I chased my dream of being an orchestral musician.

I had amassed $100,000 in student loans, was living off credit cards (a $12,000 balance spread over three cards) and had impulsively bought a sports car I couldn’t afford. (The transaction went something like this: “Hello, good sir! I’d like to buy that beautiful car over there. I have no money to put down and my credit is mediocre at best — but that’s not stopping me from driving the wheels of my dreams!”)

Needless to say, it was only a matter of time before my financial bubble popped. With only one person aware of the extent of my financial troubles, I declared Chapter 7 bankruptcy in 2012 and moved back home to live with my family so I could begin to sort out my sometimes-ridiculous life choices.

What It Feels Like to Declare Bankruptcy

I’ve heard bankruptcy described as many things: a relief, a cop-out, even a criminal act. One of my friends who had no idea about my financial situation described bankruptcy as an act of stealing from creditors. I don’t know, maybe that’s true. It still hurt when he said it. I would also add guilt, shame and failure to the long list of ways to describe bankruptcy.

I earned bachelor’s and master’s degrees in music performance from two highly accredited universities that came with equally outrageous price tags. I worked to support myself through both schools and I reminded myself constantly that I was lucky to be attending such prestigious institutions, because there were people smarter and wealthier than me who didn’t make the cut.

I never lost that subconscious stream of negative talk as I went through the years, so when I saw the proverbial writing on the wall about my impending financial crisis, I took the bankruptcy as an enormous symbol that my music career had failed, instead of commending myself for staying afloat for so long.

I felt waves of shame because I couldn’t pay the bills without working a 9-to-5 retail job I loathed because it paid terribly, yet allowed me the flexibility to take on music gigs. I experienced nauseating guilt from trying to convince myself that life as an hourly employee was what I deserved, since I was so inept at controlling my own finances and had subsequently squandered many opportunities. I experienced a mourning period of about five months while I contemplated my next steps to move on and ensure I never put myself in this type of situation again.

Other than my mom, who was extremely supportive once I confided in her, I haven’t come clean to anyone about what really happened. As far as my family knows, I came home to start a new career and be closer to my aging grandparents, which is definitely part of the truth, just not all of it.

Really it’s not anyone’s business about my personal life, but I sometimes have to skirt around details of the bankruptcy that are intertwined with other anecdotes, and I don’t like to feel as if I’m being deceptive.

So what have I learned from declaring bankruptcy, you ask? Plenty. I picked up awful financial habits from my parents and repeated many of the same mistakes I watched them make when I was a child, so when it came to figuring out where I went wrong, I had a lot of homework to do.

Here’s what I learned, and how I’m digging myself out from under my debt.

1. Get a Better Job and Lower Your Housing Expenses

This was the only plan I had when I first moved home. My bachelor’s and master’s degrees are in music performance, not education, and I wanted to transition to the classroom for a more stable and rewarding career.

While I worked toward my teaching certification, I landed a job as a teacher assistant and aftercare coordinator. My salary increased by $10,000 to $38,000 and I felt the weight begin to lift almost immediately.

To cut down on expenses, I was fortunate enough to move home with my grandmother. I loved living on my own, but I have to admit — nothing beats the feeling of the relief when you don’t have to write a rent check you can’t afford. By moving home, I was able to save a lot more of my higher income.

While I know not everyone can move to a rent-free location, consider other ways to bring down your housing costs, like trading skills for a lower rent, moving to a smaller place or even living in a non-traditional home.

2. Live Like You’re Broke

Honestly, this step wasn’t hard for me because I was so accustomed to being poor. Like, “sit-in-the-grocery-store-parking-lot-counting-change-to-buy-bologna” poor.

This has been the most crucial step for me, because if I hadn’t been so afraid of my financial shadow, I would’ve seen how much of a buffer I actually put between me and my debt. I put extra money into my car payment and pretend I don’t see my paycheck hit the bank. I dole every penny toward an expense, so I never have the chance to blow it on an impulsive purchase. When my weekly allotment runs out, that’s it — game over until next week.

Sometimes I have to turn down invites to go out, but I’m upfront about it. I tell my friends that I’m out of money and the well is dry, and the feeling of being honest trumps the guilt of going out, using a credit card and amassing more debt.

3. Make a Plan and Put It Into Action

My plan was to crush my debt, and I used my anger to propel me forward. There’s no looking back when you make this decision — just go.

I did a lot of research online about what to pay off first. You have to decide which of the debt payoff methods works best for you. I took care of my high-interest credit card first. Then I attacked my car loan and paid it off a year and a half early — it was such a huge relief to have $350 back in my budget.

Finally, I’m working on my student loans which I’ve consolidated as much as possible. This month, I will pay off my first two loans that didn’t make it into the consolidation.

4. Be Realistic and Take Responsibility

No one set of rules is applicable to every person. We’re all different; we all have levels of debt and risk that we’re comfortable with. Since I lived hand-to-mouth for way too long after making some poor choices, I’m not comfortable with carrying debt anymore. I want it gone more than anything else.

And while I can blame a smaller market for musicians since the economic downturn of 2008, the truth is, that’s not the reason my finances spun so far out of control. I wanted a lifestyle I couldn’t afford: a car that was impractical (who needs a Mustang for everyday commuting?), an apartment without a roommate, clothes, cable and trips to the city for entertainment.

I’ve learned that it’s OK to ask for help and say you’re in over your head, even if it’s your own fault. If I had said “family, I can’t do this anymore” earlier on, I might not have had to declare bankruptcy.

5. Be Patient and Stick to It

I know what I want out of my life now: an emergency savings account, stability, practical and budget-friendly outings, clothes and a car I can afford, not clothes I will have to pay off on a credit card for three months.

What I want is control of my life, and I finally have it. I know what I did wrong, and I know I will never cry myself to sleep or stay up all night watching out for the repo man coming to take my car away. I will never again endure that self-inflicted torture.

Sometimes I’ll buy a lottery ticket and fantasize about paying off my student loans, but mostly I focus on my plan. I trust myself and know I will free myself of this debt before too long. I got myself into this mess, and I’m the only one that can get myself out of it.

Lauren Perry is a teacher’s assistant in Jersey City, NJ, who is working to pay off her $100,000 of debt. Her name has been changed for this story.