Bankrupt: That's a description of your current financial situation, not of you.
But maybe bankrupt is how your heart feels. When you said, "I do," you didn't see a financial tidal wave coming. You never thought you'd wind up here. You certainly never wanted to.
But if you take away nothing else from this article, please remember this: You are not totally without assets. You are perfectly designed by God with much to offer, and you have each other.
Yes, bankruptcy is a big deal — and you're not alone. More than 700,000 people file for bankruptcy each year in the U.S. And we can presume that 100 percent of them are not happy about it. Sometimes bankruptcy is the last and only resort.
Bankruptcy laws are a calculated part of the American safety net. One big financial mistake, a change in family circumstances or a health issue can cause debt to swallow almost anyone up. My husband, Scott, and I know about massive medical bills. When I had stage 3 breast cancer, getting through the surgeries and healing process were only half the battle — the bills were the other half.
Filing for bankruptcy allows people an opportunity to regain control of their finances. And according to the National Bureau of Economic Research, a nonprofit and nonpartisan think tank, those who completed the Chapter 13 process (compared with those whose Chapter 13 filing was dismissed):
- lived longer
- made more money
- reduced the likelihood of foreclosure by 19 percent
You'll face financial consequences when you file for bankruptcy, but we aren't addressing those topics. The scope of this article is to show you how to recover and keep your marriage strong during this difficult phase.
The three steps
You won't be in this place of bankruptcy permanently, so make doubly sure you don't do any long-term damage to your relationship. You can earn more money, but your spouse is your one and only.
During this difficult time, dig deep and be intentional about protecting your "I do's" and take these three steps:
1. Admit to your part.
It's important to take an honest look at your role in the bankruptcy before you begin rebuilding. Reflect (as painful as it might be) and consider what you did or didn't do to contribute to the bankruptcy.
Ask yourself, Was it completely out of my control? Did I miss opportunities to plan ahead or stash some savings back when times were better? Did I fully communicate to my spouse about the realities of the debt before it was too late?
Some personality types struggle with money management more than others. Our research shows people take several different approaches to money, what we call money personalities. Some personalities love to save and some love to spend. And one personality style doesn't really care one way or the other.
Your natural bent toward money affects how you arrived at your financial reckoning. Recognizing this is helpful to become a better teammate, but it's nothing to feel bad about. The way you approach money is part of your emotional makeup.
This bankruptcy may have been beyond your control, but be sure to admit any chronic overspending or core issues that need to be addressed. The more you understand and take ownership for your portion of this situation, the better off you and your spouse will be going forward.
2. Rebuild as a team.
Bankruptcy is a formidable giant to stare down. But you can do it together. In fact, we've seen couples emerge from financial disasters stronger as a couple.
To see the glass half-full (and even refillable), use this bankruptcy as an opportunity to build something together.
- Stop blaming. Forgive. And move forward together.
- Build a budget together and stick to it.
- Commit to a quarterly review of important numbers and statements.
- Watch your credit score together — pull a score each quarter.
- Review all statements together — debt, income and accounts.
- Apply for a secured credit card (you must put down a deposit first, usually around $200) and pay it off each month.
- Avoid any additional debt.
- Sign up for personal finance microsaving app tools to painlessly save. Some of them, such as Acorns and Digit, charge small monthly fees. Others have a free bottom tier, such as Tip Yourself or Chime.
3. Believe in your future.
Bankruptcy affects your credit for seven to 10 years, but that's not forever. You have a future. Together. Believe that. Believe in God. Plan for the future, remembering Isaiah 51:6:
Lift up your eyes to the heavens, and look at the earth beneath; for the heavens vanish like smoke, the earth will wear out like a garment, and they who dwell in it will die in like manner; but my salvation will be forever, and my righteousness will never be dismayed.
Bankruptcy is not forever
If you feel stuck, talk about it. If you feel doomed, tell your spouse. If you feel like everyone else is cruising along and you never will, tell God — and your spouse. Be honest about how you feel, but believe, too! Believe in your future together.
And encourage each other with these facts and stats:
- A LendingTree study showed that two years after filing for bankruptcy, 65 percent of people had a credit score of 640 or higher.
- Some mortgage lenders expect only a two-year waiting period for bankruptcy filers.
- You can rebuild your credit, safely.
Dreaming is free
After you've recovererd, you won't want to look back on your "waiting period" and wish you'd saved more. Start a new pattern now. Start saving. It doesn't have to be thousands or even hundreds to start, but start. Start saving for your future.
Some call this "retirement planning"; you can call it a "future spending fund." Dream a little about your future. Talk about your hopes and dreams. Ask God to show you your future, and really take the time to envision it to get you both excited. Take your focus off the present and look to the future God is calling you toward.
Believe in Him and His plans.
Also trust in what you've learned through this process. Take some time to learn even more about your role in this bankruptcy and the responsibilities of rebuilding.
Start dreaming now. Together.Scott and Bethany Palmer, The Money Couple, are the authors of The 5 Money Personalities: Speaking the same love and money language.
Do you know of a marriage in crisis? Learn more about Focus on the Family’s marriage intensives by visiting HopeRestored.com.