When I walked through the doors of the bankruptcy court I was ready for war. I had armed myself with all the information on insolvency I could find. With experience of the inside of a courtroom as a young journalist, and close friends who had already walked the road to financial ruin, I was convinced that I would survive the battle I was now confronted with.
But nothing had quite prepared me for the tornado that ripped through my family leaving nothing but devastation and heartache in its wake. The struggle to save my marriage, home, protect my children and put food on the table was my biggest challenge to date. This was by far the darkest and most isolating period in my life.
When I first entered the courtroom I was determined to retain my dignity to the world outside even if I was in pieces inside. Life as I knew it was now crumbling. Fifty years of hard financial graft between my husband and I was now about to go up in a puff of smoke – the bankruptcy process, executed with military precision, took one hour from start to finish. It was terrifying.
This article is written by Joanne Wood who declared herself bankrupt in February 2006. From the age of 17 Joanne worked as a court reporter at the Central Criminal Court. She is the author of Bankrupt 130 of 2006 – a remarkably candid account of what happened to a family after bankruptcy.
Within just four weeks of lodging the bankruptcy petition I had become a shadow of my old self. Locked away in doors I felt safe from the prying eyes of strangers who in my irrational state of paranoia ‘all knew’ I was a bankrupt. Feelings of agoraphobia prevented me from straying much further than the back garden and dare I admit it, yes, thoughts of suicide. I felt like a leper, dirty, an outcast in society.
The constant lack of communication from the Official Receiver’s office was frustrating. They are so inundated that they rarely have time to call you back. Hidden behind twitching curtains I daily stalked the postman, praying for update information about the bankruptcy – what would become of my home, my family? But months would pass with no news. This morning ritual, of lying in wait for postie, left me deflated and dominated my life. It was sheer madness. I didn’t recognise the person I had become.
With debts in excess of one hundred thousand pound, I tentatively crossed the courthouse threshold on February 17, 2006. Born into a generation where bankruptcy was fiercely frowned upon I was prepared for the reception of the outside world. I was more than aware of the stigma attached to insolvency. What I had not bargained for was the psychological impact of being given my personal bankrupt number of ‘debtor’ 130 of 2006. I had been branded. This was the ultimate stamp of failure in my eyes.
Initially, I thought I would serve my bankruptcy time without too much fuss. That was the good part. The reality – a woman, an unhappy bankrupt woman, who wanted to talk to her man. And, so a life of hell for my poor husband was born. The poor blighter didn’t stand a chance.
Insistent on giving my life a thorough post mortem I constantly badgered my husband for conversation. Although close friends and work companions for the past twenty seven years, he had now brought the shutters firmly down. He did not want to talk of bankruptcy. He refused to acknowledge that he too was a bankrupt. Subject matter closed.
What started off as just bankruptcy had now become a battle to stay out of the divorce court. There was shouting, screaming, plate smashing and on one occasion a full on body assault with a wet mop – guilty as charged. For some, like my husband, bankruptcy, or even just out of control debt, is done in silence. Others on the other hand will struggle to contain their emotions. For me it was like drowning. I could not breathe. I had no financial control over my life – the Official Receiver owned me. I desperately wanted my old life back.
You try to protect your children from this onslaught but they are not stupid. Even if they cannot see it they feel it. The tension in my house could have been severed with a blade.
And yes, they did suffer educationally to some degree. But they also learnt an important lesson as they watched us work ridiculous hours around the clock in an attempt to rebuild our lives. If anything I think they are proud of us and that has to be a good message.
So how had my life been reduced to ruins? Well we hadn’t sailed around the world at the expense of American Express and we didn’t drive a fast, flash car. We were two self-employed people who had worked the whole of our adult life. Unfortunately we were trapped in a financial cul-de-sac of erratic payments for work carried out, a declining work industry and an untimely piece of misfortune with a bad house purchase – three surveyors had failed to do their job properly and a house full of rot was ours to keep. So, the bankruptcy court it was.
For months I had been haunted by the piecing shrill of the telephone from dawn to dusk, seven days a week from creditors demanding their money. It left me feeling sick to the pit of my stomach. Answering machines filtered every call and in extreme cases the phone was unplugged. There was not a minute in any day when I was not worrying about debt. A black cloud seemed to follow my every step.
Once we had made the decision to lodge the bankruptcy petition it was paramount that we took control of our own insolvency as much as was permitted. It was vital that we gave ourselves time to plan ahead. We needed enough cash to see us through a very difficult transitional period – about six weeks.
All bank accounts will be frozen on the day of your bankruptcy. You will have to find an alternative method to fund your domestic needs – generally this means working with cash only. At this point there are only two aspects that you need to address. Firstly, you need to accumulate enough cash to live on: monies to cover work expenses – travel and fuel, fill up your fridge/freezer – two freezers if you have them and, money put aside to heat your property. Trust me it is back to basics.
And, finally, do not pay any bills apart from the mortgage and secured loans – if you intend trying to keep your home or the rent. Save the rest to feed yourselves. Nobody cares whether you eat or starve.
I cannot stress enough how important this is. I am not joking when I say you may not have enough money to buy a loaf of bread the minute you walk out of the bankruptcy court. Stock your freezer to the brim.
At no stage before or during my bankruptcy was I asked: ‘Do you have enough money to feed yourselves?’ As a self-employed person I had no idea where the next job or payment was coming from. Ironically, if I had committed murder then I would have been fed every day of my prison term. I had worked and paid taxes since I was seventeen years-old and yet I felt like a criminal.
Coping with the avalanche of emotions, as I walked the bankruptcy tightrope left me bitter and mentally exhausted. I struggled to put one foot in front of the other. It was like climbing Everest.
Working entirely with cash was a new experience. Good mental arithmetic was essential for the human calculator I had become. I had to ensure the pennies in my purse matched the goods in my supermarket shopping trolley. There was no plastic back up. Actually, I did carry a credit card in my wallet but it was purely for show. I could not use it but it made me feel part of society – like I belonged.
Organisation is vital when juggling the Official Receiver’s meagre allowance. I dubbed it the ‘boiled egg budget’ because that is all we ever seemed to eat. Feeding four people on such a small sum was an art form. Heavens forbid we needed to put a new tyre on the car. All unexpected extras came from this insufficient money pot.
The Official Receiver’s shopping budget is a set amount for, say a family of four in our case. But I did have to point out that they were not little children but growing teenagers and to take that into consideration. In my opinion this is an unrealistic allowance. This was the main topic of conversation throughout the duration of the bankruptcy period. The kitchen cupboards were always bare.
There were days when I feared that we could not put food on the table and the children were always fed first. Why the heck should I be penalised in this way? Two adults out at work a minimum of seventy two hours a week each. Self employed individuals waiting to be paid for their efforts, when, and only when, the customer decides. Is this a crime?
So, there you have it. Bankruptcy for me was lost time. I felt unclean and too afraid to expose myself to the world as a bankrupt. Feelings of failure, lack of self worth and helplessness were just some of the symptoms I encountered as my marriage went into meltdown.
Three years on and, although still fresh in my mind, the nightmare is fading. I was forced to sell my home, address the state of my marriage and put back the pieces of my dysfunctional family. Nobody died. And, yes, I can hear the critics – stop whinging and be grateful.
No, it is not necessarily fair, especially in this day and age that families find themselves in this predicament. With unemployment on the rise and couples being forced into financial turmoil there needs to be a lot more support before making such a life changing decision. Walking into the bankruptcy court is not always the right answer. For goodness sake, exhaust every avenue before you hand over financial control to the Official Receiver.
Bankruptcy is not a quick method to dump the debts or as some reports have suggested a ‘cop out’. This will be one of the hardest decisions you will ever make and it will take a number of years to repair the damage to your credit rating.
5 Real Life Tips to fight against Insolvency / Bankruptcy:
- If bankruptcy is the only option then make sure that you lodge your own petition. Do not allow your creditors to haul you into court and make you bankrupt. It is of the utmost importance that you retain your dignity. It is vital you feel in control of your life. Allow yourself enough time to plan ahead and get some cash saved to support you through the transitional stages.
- Keep the lines of communication open with your partner. Do not blame each other. The worst has happened. Accept that you are going to lose something. It is a case of damage limitation. The sooner you decide to deal with the crisis, together, the sooner you will be starting afresh.
- Think of it as business. There is no time to become sentimental about the house and material objects. Sit down together and face your debt. Accept that you may have to move home and live on a much tighter budget for the foreseeable future. Remember, you are the one making the decisions. This will help when trying to cope with the mixed emotions you are feeling. Some feel ashamed others may feel like they have failed. But do not be defeated. You are not alone. Bankruptcy has become part of everyday life and tens of thousands are being forced to make this life changing decision.
- Try and unite as a family. If you have older children then get them involved. Be open with them. Children today live in a must have it all, must have it now society. This will be a shock to their system and they will have to get used to the constant use of the word ‘no’. The money for frivolous purchases just is not there. If you have young children then get them involved in budgeting. The next generation really do need to know how to save.
- Plan for the year ahead. Bankruptcy generally lasts twelve months. Try and list all of your expenses and set yourself a target. But remember it is not just about the finances. Think about your relationship. There will be very little cash left over for romantic meals. Make time for each other. Go for a walk or a swift half at the local pub. You need to keep the family unit together. Focus on the children. It is very easy, when you are working every hour under the sun to rebuild your financial life, to overlook minor problems. Reassure them that life is full of ups and downs and mum and dad have got it under control. It is good for them to see you working as a team in a crisis.
If you need any suggestion, please drop a comment here. I will be more than happy to help.
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