How to know when to declare bankruptcy

This morning Bob said to me, "You know, if we had declared bankruptcy earlier we could have stayed in our house at least six months longer."

I responded, "Yeah. Maybe. There are a million if only's. Oh well."

Two things about that...

1. It has been four years and we are still replaying our every move like a chess game that just won't quit. 

If only...

If only we had declared bankruptcy before falling into pre-foreclosure, then we might have had a chance to save the house.

If only we had listed the house at the price we paid for it right away, we would have found a buyer immediately, thus avoiding the need for a short sale and subsequent bankruptcy.

If only we hadn't dumped all of our savings into a renovation.

If only we had never bought the house.

That's where the "if only" chain of  thought always ends. If only we had never bought the house. Well, I shouldn't say it ends there. It pauses there. And hangs for a beat.

Then I usually go to:

"Yeah, but... I loved the house. We got to live there for the time that we did. And while we did, we loved the heck out of it."

So... why do we keep torturing ourselves with "what ifs" still four years later? Perhaps we feel that if we can play the right moves, we won't repeat the mistakes in our future. To me, it always feels futile. I mean, who knows how events would have unfolded if we had never bought the house. We might have been reckless in some other way that could have devastated our finances.

The lessons we learned from our brush with foreclosure are the lessons that make us savvier today. We didn't know that then. And we didn't even know that we didn't know that.

We're smarter now BECAUSE of everything that went down.

2. Bob has a point about the Bankruptcy

Bob first bought up bankruptcy protection when we were about to miss our first mortgage payment. He wanted to look into it then.

I did not.

He was thinking of it as a business decision. It's called bankruptcy protection for a reason. He wanted to protect our assets; I wanted to be a good girl.

I saw bankruptcy as a shameful failure and one that should be avoided at all costs. I was unwilling to consider that it was a viable choice. I was unwilling to consider that we might eventually be forced declare bankruptcy. I had fixed my mind on salvation. We will get out of this mess. Somehow. We won't have to declare bankruptcy.

Well... I was wrong.

We avoided foreclosure, but ended up short selling our home and losing everything in the process. And we found ourselves cowering under the protection of Chapter 7. We no longer had any assets to protect. What we were protecting now was our future. See, we were worried that the bank would wait for us to get back on our feet and then come after us for the difference from the short sale.

Had I been willing to give up my judgements about Bankruptcy, we might still have our house today. And if we had been able to hold onto it, we would have a major asset in today's rebounding housing market.

I don't allow myself to think about that very often because it's neither here nor there. I really am "oh well" about it. Because we are where we are. We are back on our feet. We're not homeowners. We're still in debt. But we are much better off than we have been for many years.

I'm focused on creating our future, not rewriting our past. 

That's not to say that I don't occasionally find myself daydreaming and playing that alternate reality game. The "what would our life look like today if we never lost the house" game. But I quickly see the danger in that and shut it down.

How can you learn from us?

First. Do NOT do this:

Do not fool yourself into believing that everything will be okay so you don't even need to become familiar with the B-word.

That's what I did. And I regret it.

So, what to do?

Learn. Investigate. Interview the B-Word and learn about all of its many complexities.

Learn about the different types of bankruptcy protection and determine which would be right for you. There's Chapter 7 (what we filed because at that point we didn't have any assets,) Chapter 11, Chapter 12, Chapter 13...

Learn about how it will impact your credit. Try to determine if it is worth it.

The more you learn now, the better. Try to separate your feelings about bankruptcy. I would suggest looking at it from a matter-of-fact business decision. Try to view this as a potential business decision. Subtract the emotion from the fact-finding.

You could even set up a meeting to talk to a bankruptcy attorney just to better understand your options. I wasn't even willing to do that because I really believed the worst couldn't happen. Then it did. And it was too late to salvage our assets. You don't have to make my mistake.

Ground yourself in reality as early in the process as possible.

And remember, just because you're talking about Bankruptcy, doesn't mean you're surrendering to it.

I'm not advocating running for the cover of Bankruptcy before trying anything and everything else. I'm just saying that you don't want to wait until it's too late. Until you really are left with nothing.

It's a very tricky and emotional thing. I completely understand that. And I don't have an answer to the question, When should I declare Bankruptcy?

And if I did claim to have an answer to that question, you shouldn't listen because I AM NOT AN EXPERT. I am not an attorney. I am just a writer who wishes she hadn't been so afraid of failing.

Bankruptcy exists for a reason.

Just like short sales exist for a reason. Sometimes things don't go as planned. These are things to help mitigate the losses.

We didn't want to have to declare Bankruptcy. Trust me. I write about that here. We didn't take it lightly.

Bankruptcy isn't to be taken lightly. If you end up there, I highly advise that you learn from the mistakes that led you down that path so that you don't wear it thin.

And in the meantime, do as our Bankruptcy attorney advised:
Be good to each other.

And... quit with the "If onlys" and "what ifs."

Instead, create a financially responsible future.

My blog post about our decision to declare bankruptcy is here: B is For...

As always, I greatly appreciate your sharing this with someone facing foreclosure or bankruptcy.


This holiday season, share some Love in the Time of Foreclosure. The eBook is available here.

"Thank you, Foreclosure" on Huff Post Live

Screenshot from today's Huff Post Live conversation

Just this morning Bob said that he's been feeling grateful for our near foreclosure and bankruptcy because it's had him feel stronger and more connected to the impact of our financial decisions. 

Later in the day, I received an e-mail from a Huff Post Live producer - completely out of the blue - asking if I would be interested in coming to the studio and talking about the silver lining of foreclosure.

Totally bizarre, right? Such serendipity.

So I quickly booked a babysitter and headed to Beverly Hills to the Huff Post Live studio to talk about my personal experience with the upside of foreclosure. It couldn't have been a better fit.

The conversation was inspired by a piece written by Peter S. Goodman titled Foreclosure Crisis Spurs Quest to Reinvigorate Suburbs, which was inspired by the MOMA exhibit Foreclosed: Rehousing the American Dream.

Did any of you get to see the MOMA exhibit?

Here's a link to the Huff Post Live segment from today-- Thank you, Foreclosure

If you watch, I hope you'll comment either here or on their site.

And just a head's up, I don't start talking until about 9 minutes in. Hard to believe that I held off that long. But it's hard to jump into those conversations. I kept waiting for an opening... This was my first time on "TV." There is so much more I wanted to say! Hopefully they'll have me back. It was so much fun.

I hope you enjoy the discussion.

And what about you, dear reader? Have you experienced the silver lining of foreclosure? If so, in what way? Please share in the comments below. Thanks!

LITTOF STORIES: Choosing Plan D

It's time for another LITTOF Reader Story!

What do you do when Plans A, B & C don't pan out? If you're like LITTOF Reader, Laurie, you choose Plan D.

That's right. That's what survivors do. That's what resilience is all about. And I'm all about resiliency. So I'm very excited to introduce you to Laurie- who prefers that I only use her first name. So, like Madonna she will be known by only one name. Laurie.

She e-mailed me back in January of this year to say that she was glad I had picked up blogging on LITTOF. In that e-mail, she shared that she and her husband began their modification/short sale/ foreclosure process when she was pregnant with their first child. They now have two children – a 19-month-old and a 3-year-old. It really shows how much life can happen in the face of foreclosure! Life goes on. Life is created. Children grow up!

Laurie wrote to me about their trouble and frustrations with HAMP. And her attitude while sharing about the insane runaround they received while trying to save their home, really struck me.

“We may end up in foreclosure and then bankruptcy like you.  It's all going to take time to tell.  Meanwhile, we love our home that we have remodeled and made our own.  But it is just brick and mortar.  We are excited about our future and the lessons we have learned, that we have each other.   We consider it the price to pay for this painful education we have received.”

Laurie and her husband experienced the nightmare of Fed-Exing payments during a trial modification only to be kicked out of the program for non-payment. Has that happened to any of you? I can't imagine. I've actually been hearing about that happening more and more. Yet in the face of that, Laurie remained positive.

So sit back and enjoy a conversation with Laurie about life in and after foreclosure and choosing Plan D...

           

LITTOF: First, tell us about the house. Where is it and how long have you lived there?

LAURIE: We moved into our first home in the spring of 2006. We moved out at the end of August 2011.  It was in a great suburban area of Northern California, the perfect family town.  We renovated and made it out own and really loved our neighbors, the park I walked the kids to every day and our garbage man, Carlo, who stopped by every Friday and took the time to say hi to our very excited son, Max.

LITTOF: What were the circumstances that led to your foreclosure?

LAURIE: My husband is in the construction industry.  When the economy tanked, banks quit lending and builders quit building.  My husband would go without a paycheck for months at a time.  We had really stretched ourselves, spending probably 70% of our income on our mortgage because we had faith that like our neighbors, our investment would pay off, prices would continue to rise, and we could refinance and be ok eventually.  

LITTOF: Please tell us about the process thus far.

LAURIE: In 2008 we knew we were in trouble.  Our home price had dropped by 30% and our income by 50%.  We contacted the bank right away and stayed in touch the whole 2 year process, first trying to modify, then short sale, then foreclosure with bankruptcy for protection.

LITTOF: How long did the process take?

LAURIE: The process took from fall of 2008 until summer of 2011.  Most of that time was in the roller coaster that is modification.  We were told something different each time we called.  

LITTOF: What has been the most challenging aspect?

LAURIE: The overwhelming lack of consistency and communication with the bank.  We were told erroneous information that would take us down one path and then months later, to find out it was wrong.  EX:  We were told our bank would accept a modification if we just entered into a trial mod for 3 months.  For 10 months we kept paying diligently and Fed Ex-ing payment in advance each month. 

I eventually had the case escalated to a corporate level to see what was going on because we were told during one of my weekly calls that we were kicked out of the modification due to non-payment, then again that same day that things were ok, and then again that we were denied the mod but they didn’t know why.  Corporate investigated and determined that our bank, “didn’t participate in modifications.”  What a waste of time.  

LITTOF: What has been your most triumphant moment thus far?

LAURIE: The day we decided to go with plan D.  We decided early on to come up with a contingency plan because we had heard lots of horror stories.  Plan A was a mod, Plan B was a short sale, Plan C was a foreclosure and D was bankruptcy (and foreclosure).

 Plan D became our realization and actually it was very freeing knowing we had really done everything right and tried our best and it was going to be over soon and we could move on.  Plan D allowed us to close a door and start planning for our future.  We knew everything would be ok once we set our sights on our new reality.

LITTOF: How are you able to stay positive?

LAURIE: Actually, I am a worrier and a control freak.  I unfortunately can easily get consumed with things.  I have always been very conscientious about bills and paying on time and my credit has always been excellent. The stigma and what our neighbors would think bothered me at first. I prayed a lot and got support from some girlfriends and made the decision early on not to let this get the best of me.  I am a Christian and so it was important for me to let go of my need to control things and give it to God.  I knew I would do my best to navigate the issues but ultimately I had no control over the final outcome and I knew I would be taken care of.  Things would be ok.  It might not be the way I would want it, but eventually, I would see it was a blessing in disguise.  It has been. 

 

LITTOF: What is your goal in all of this?

LAURIE: To take the road less traveled by.  The norm in our culture is to strap yourself down with debt, trying to have and be what the world tells you to.  We are living on a cash basis now, much more aware of our spending and our goals.  It opened our eyes to a way of life that is not on the rat wheel.  We are free, mobile, and most importantly are dreaming again, with our heads out of the sand.   

We are planning to rent until our kids are through elementary and then live in an RV…probably a 5^th wheel toy hauler and travel the country, road-schooling our kids through the middle school years and teaching them by exposing them to things they would have only read about in books.  

It is fun to dream again and to plan our adventures.  We have a big map and put tacks on the places we want to see.  There are so many, we will have to narrow them down.  It’s fun to research them and figure it all out.  We have time, so it will be a work in progress.

 

LITTOF: What have you learned thus far?

LAURIE: Material objects can be a huge burden.  It is freeing to let them go. 

LITTOF: How are you better off now?

LAURIE: I am reminded of the song that goes, “I can see clearly now, the rain is gone….I can see all obstacles in my way…Gone are the dark clouds that had me blind…it’s gonna be a bright, bright, sun-shiny day.” 

LITTOF: Do you have a plan for the future?

LAURIE: Oh yes, family, fun, experiencing life to the fullest, and freedom. 

LITTOF: What advice would you give to someone who is either worried about losing his/her home or is actually in foreclosure?

LAURIE: It may be the best thing that has happened to you, giving you a new start and a new perspective.  Don’t waste your energy trying to stay aboard a sinking ship, if foreclosure is the direction you are headed, focus your energy on a plan for a new life.  A house is not a home. 

LITTOF: Anything else?

LAURIE: Just want you to know that your blog really helped me in a time when I thought I was the only one. Your honesty and candid thoughts on the subject as if happened were inspiring.  Thanks.

LITTOF: Thank you, Laurie. And best of luck in the future. I love your idea of road-schooling your kids! Keep in touch!

QUESTIONS FOR READERS - 

- Do you have a plan D? What is it?

- Have you experienced the same runaround in a trial loan modification? What happened and how did you handle it?

About the picture- I asked Laurie to send me a picture of what represents "HOME" to her today. And this is the picture she sent. I love it!

Send me your pictures of what represents home to YOU and I'll share them on the LITTOF Facebook Page. You can send them here: loveinthetimeofforeclosure@gmail.com


Here's a story about the trouble with trial loan modifications:

Gov't Loan Mod Program Leaves Some Homeowners Worse Off - Pro Publica

Related articles

• Seniors Faces Foreclosure After Making Mortgage Payment Too Early (huffingtonpost.com)

The insider's guide to bankruptcy: credit cards

See this new post here and find out what Bob got in the mail yesterday.

the goals we carry in our wallets

"As long as we have hope, we have direction, the energy to move and the map to move by, we have a hundred alternatives, a thousand paths and an infinity of dreams." - author unknown

This is the quote that welcomed me into the online "Pre-Discharge Bankruptcy Class" called Money In Motion. I scoffed at first. Because it was 6PM on a Sunday and I really, really did not want to take a 2-hour online course that would just remind me of how much a failure I am financially. So, yes, I scoffed. At first.

Then I realized that that quote is just another way of saying what I've been saying all along... happiness has nothing to do with the circumstances. I have hope. Like our President. I hope. But hope alone doesn't inspire change. It must be backed up by action. This pre-discharge bankruptcy class is one action.

Here I am facing my computer on a Sunday evening because something clearly needs to change. This online course isn't a reflection or a reminder of my failure. It's feedback. It's acknowledgment that I need a little help to change. A change in thinking. New tools.

So I make the choice to dive in and read everything in this 2-hour online course. I won't skim. I'll really read it and even take notes. Because I'm here for a reason, after all.

The first thing this Money In Motion course addresses is GOALS. Goals are the basis for any budget, it tells me. Your goals should be flexible and specific. It asks me to write down three goals on an index card. One short term, one mid term and one long term goal.

My pen hovers over the index card.

I write "My Goals" at the top.

Then think. Hmmmm.... why is this so hard?

For an entire year I have been training myself to NOT want anything, that's why. I've been training myself to avoid magazines, zappos.com, stores of any kind. I've been re-conditioning myself to be able to walk into a store and walk out feeling BETTER about having NOT bought something than having spent money just to spend money. I've been learning how to be creative and "shop my closet" as a way to find new outfits and combinations of clothes I've never tried before. New clothes without spending a dime. Trading. Selling and buying used. Wanting less. Wanting nothing except what I have and being grateful. Satisfied. And I am.

Thankfully. Gratefully.

So this is hard. I'm finding it hard to write something on the card. Something that doesn't feel completely arbitrary or simply "pie-in-the-sky." But Money In Motion (MIM) is telling me to. Is saying: GOALS ARE THE BASIS FOR ANY BUDGET. They must be specific & flexible. Okay, so they can change. Fine.

Okay, a new pair running shoes. I actually do need those. Mine are old and worn through and given my propensity towards injuries, running on old shoes is a very bad idea. So that one's easy.

Next one has to be between $500 and $2000. Harder. Even when we do earn money, we don't want to just spend it on things. But experiences. The goal: acquire experiences, not things. Remember? Right. So... well, why not? A vacation. A romantic vacation. A fabulous vacation. I can commit to that goal. At the present the only vacation we have on the books is a one night camping trip to Lake Geneva, WI where we were married 6 years ago. We haven't been back since. So... I write it down. A fabulous vacation with Bob.

Third goal. More than $5,000. Well, since our goal is to spend nothing acquiring furniture for the house on the island I'm not going to write down furniture. What else? Savings. That counts, right? Why not go large. $10,000 in savings. The idea of saving is much sexier to me now than a new car or even a new wardrobe. So savings it is.

MIM suggests I carry my goal card in my wallet where I can see it each time I go to spend money on something. And I haven't done that yet. Why? I don't know. Perhaps I'm still relating to it as "pie in the sky." Or perhaps I'm avoiding something. That's more likely. Avoiding being limited? Perhaps.

So, guess what. I'm doing it now. Right now. Putting the goal card in my wallet. Done. It's now there. My reminder. A little gift from MIM.

I have a challenge for you.

Grab an index card and write down 3 goals. 0-$500, $500-$2,000 and over $5,000. What are yours? I think we can learn from each other. Once you've written your goals, take a picture, upload it & post the link in the comment section. Or... just write them out in the comments if you don't want to go thru the whole taking the pic and uploading it business.

Either way you can join in. I just want to know, what goals would you carry in your wallet?

Limbo

Today's post is written by my amazing husband Bob. Two weeks ago I requested that he write one because I'd been missing his voice on the blog. Not to mention, I absolutely loved the post he wrote back in March- A Guy's Guy- and was craving another. I told him, "It better make me weep!" No pressure, right? Well, enough preamble. Here it is...

“Every limbo boy and girl
All around the limbo world
Gonna do the limbo rock
All around the limbo clock...”

That song popped into my head today. Ha ha! Now it’s in your head too! Make sure to either hum the tune or sing it in front of others. Nothing like passing on a tune you can’t get out of your head to others. That seems to be the only cure.

It reminds me of the earlier years, roller skating around the rink while "Limbo Rock" blasts throughout the building. A single file line is formed and one by one people skate under the limbo stick being held by two people, one on each end. Everyone goes through and falls down or touches the stick, eliminating them from the game until there is only one person left. The person left is the one who successfully arches down, bends sideways or backwards, and seems to be a contortionist by nature, as each round the stick is lowered closer and closer to the floor.

For me, when the limbo stick gets to a certain height, my mind starts acting up. “I can’t do it. It’s too low. I’m gonna fall...”

Limbo as a colloquialism is "any status where a person or project is held up, and nothing can be done until another action happens.”

Sounds familiar.

Sending out resumes for a job over a year ago
Putting the house on the market
Calling/working with lenders and creditors
Temporarily living in the Midwest
Filing for bankruptcy

Waiting.

“Limbo lower now
Limbo lower now…”

For over a year, life has been in limbo. Always waiting for another action, being held up until something on the other end happens. Something in someone else’s control. An action on the other end.

Actions like

A job offer
Offer on the house
Agreement on new terms
The right time to move
Court approval

It all boils down to

a request
a waiting period
and approval/denial of the request

It’s the waiting time that seems to make things go into limbo. Whether it’s taking too long, or I want to be somewhere else, or doing something else, that’s where limbo comes into play. It turns to anxiety, stress, disappointment, depression, fear, loss, heartbreak, hopelessness. The limbo stick is too low.

I’m a very impatient person. So for me, something that might take a month, may seem like an eternity and completely stress me out. Someone else may not even notice the time go by and think to themselves, “that went by fast!” They don’t even sweat it. That person has a bit more flexibility in how they're viewing that particular situation.

“la la la...”

Maybe if I step back for a moment, stretch, breathe and relax when the limbo feeling hits, I won’t be so concerned about how low or high the bar is.

“Get yourself a limbo girl
Give that chic a limbo whirl
There's a limbo moon above
You will fall in limbo love...”

I know that when Stephanie and I spend time together and reconnect, things tend to come back in to focus. Life tends to be a little less hectic and a bit more magical. The limbo stick seems to be high enough to stroll right under. Effortlessly.

“Don't move that limbo bar
You'll be a limbo star...”

The question I pose to you is... how low can you go?

-Bob

Read Bob's previous post "A Guy's Guy"

B is for...

I’ve been putting off this post.

I haven’t wanted to write about it. I mean, I’ve wanted to, but didn’t know quite how. Well, I’ve been afraid. Afraid of saying it out loud. Of seeing it online. Of documenting my ‘failure’ for all the world to see. Of opening myself up for potentially massive judgment and the harsh critics on the internets (as my friend Jackie would say.)

So I’ve procrastinated. Wrote about other things. Waited. Until now. Because the whole point of this blog is to tell it like it is. Right? Yes. The point is to tell it like it is in order to hopefully make a difference for someone else in a similar situation. To be open. Honest. To accurately document our experience in the housing crisis and the great economic recession. Our view has always been that we are not victims. And that our present hardship is the fertile soil of our rebirth. This is our chance to be born again, so to speak. Our new savior? Simplicity. Financial responsibility.

Tell it like it is, Stephanie. Just own it. Do it.

Okay. But how? Well, just stick to the facts. In March I wrote a post about the facts that make up our lives and how we found freedom in relating to them as just the facts. Without adding anything.

So, to take a lesson from that post...

At this moment in time, these are the facts:

-WE are ‘camping out’ in my mom and stepdad’s walk-out basement.
-WE are moving in October to the San Juan Islands where we will live for 2 years rent-free taking care of someone else’s house (that story is here.)
-WE are no longer homeowners.
-OUR credit score is 511
-WE have just filed bankruptcy

There it is. Ouch.

Did you miss it? Should I say it again?

We have just filed bankruptcy.

We are insolvent.

We are bankrupt. Lacking in a particular desirable attribute (money.)

The letter of the day is B. And B is for Bankruptcy.

I know.

I know. Please don’t look at me like that. Like that! Oh, you’re not? You just had something in your eye? Well, the thing is that I am making an effort to relate to these facts as just facts and nothing more, but I’m not there yet.

Why?

Well, I guess because I’m afraid of what you will think. I'm embarrassed! It’s hard to confront the overwhelming extent of our debt and how we got there let alone how everyone else will now categorize us.

Let me be clear:

This is NOT where we thought we’d end up.
This is not where we wanted to end up.
This IS where we have ended up.

In Bankruptcy.

The B-word.

There are a lot of facts that led to the fact that we’ve filed for bankruptcy. And we are using all the facts to learn, to grow. The challenge is to not use the facts to beat ourselves to bloody carcasses. What good would that do? I see no upside in that.

When we first met with our bankruptcy attorney he said, in so many words, be good to each other.

"If one of you drinks or eats or is short with the other, just know that it’s probably because of this. Bankruptcy. Because most people have a conversation in their heads that says, I’m a loser. Don’t listen. Just ignore it. It’s just a conversation."

He said all of this with extreme intensity. He wanted to make sure we heard what he had to say.

He said that bankruptcy is hard on marriages because, he pointed at Bob and said, “He wants to build you a castle," he then pointed at me, "and you want a home that’s safe."

He let that hang for a beat. Simple. But true. The truth of that simple statement hit us between the eyes. "And when that doesn’t happen," he continued... clear that he had our attention, "you think you failed. A lot of couples end up in divorce court next and I hate seeing that happen. It doesn’t have to be like that. Okay?" Okay. "Good. You're going to get through this."

And with that he handed us our marching orders. It was a relief. We were so afraid of that meeting. Of acknowledging that this is where we've actually landed. Of the embarrassment! But once we did, it wasn't so scary.

And we could have just gone about our business and never told a soul. Started fresh. No one would have to know. Except for the fact that I have this blog and I feel an obligation to be as truthful and vulnerable as possible. And our commitment to peeling back the curtains for the benefit of others. Which leads us here. To this moment. To me sitting in a coffee shop in my hometown on my day off work typing out the facts.


Photo Credit: Cookie Monster Wallpaper - deviantART by Elmhoe

Now that the cat is out of the bag, I’ll be writing a lot more about the process of going through bankruptcy and its effects on us and what we’re learning. I expect questions. Ask away. Please.

I have questions too.

First of all, do YOU live on a strict budget?

What tools do you use to track your spending?

Comment below or e-mail: loveinthetimeofforeclosure@gmail.com

Debt is Dumb

Our credit rating is on a respirator. It's barely holding on for dear life. It's useless, actually. Just lays around all day in a hospital bed under a morphine spell. We don't even visit it anymore. It doesn't recognize us.

Debt did it. Debt killed our credit rating. Our debt. No one else's. Our inability to stay on top of our debt, to be more specific. You know how this goes.

Many months ago we began to prepare ourselves for the death of our credit rating. It's inevitable. We agreed that it would be okay. We never want to be in debt ever again so not being able to use credit is a way to not be in debt, right? We don't need it. Cash will be our king and we'll never use credit again.

This may sound like an extreme over-correction not to mention impossible. Indeed, there are stories about people declaring bankruptcy and a few months later the credit card offers start arriving again. So it's not like we'll never be able to get a credit card again... it's that we don't want to take that chance.

You're supposed to use self-control. You're not supposed to carry a balance. That's when you get into trouble. Yes, yes, we know. But why is this so much easier said than done? We had zero credit card debt before we bought our house. And then... and then... well, mistakes were made. The balance ballooned and the rest is history.

Debt, one could say, is dumb. We're not stupid, so how could we be so dumb?

In "Walking Away from Credit Cards" on CNN.com financial expert, David Ramsey, says this about that:

"Debt is not a tool; it is a method to make banks wealthy, not you," says Ramsey's Web site, where users can find blunt advice on how to deal with creditors and develop sound money habits. "Debt is dumb."

The article then goes on to quote Brad Chaffee, a finance student of Charlotsville, Virgina who thinks:

"I think if we just use cash and debit cards, it's a much better idea," he said. "Credit cards are too risky, and when something does happen to you and you have a bunch of debt -- like for instance when life happens to you, you lose your job or whatever it may be -- you've got all this debt in your life, whereas if you didn't use credit cards and you didn't use debt, then you might be in a little better situation."

We agree.

Walking Away From Credit Cards - CNN.COM