Q Is there life after bankruptcy? I hope the answer is yes. How do you proceed from that point? We are a couple in our 40s, two kids -- a teenager and one in elementary school -- with questions about college, retirement, buying another home and moving on. Any help appreciated.
TRACEY
A There is definitely life after bankruptcy. Bankruptcy is all about a fresh start.
In our early history bankruptcy was a crime. Defaulting on your debts might get you locked up in debtor prisons.
How to treat going broke ranked among the major legislative battles of the time. By the end of the 19th century the law reflected the influence of another powerful American creed: America as the land of the fresh start. Frontiersman Daniel Boone went belly up. So did Civil War photographer Mathew Brady. P.T. Barnum, the famous showman, lost half a million dollars in a giant swindle. He came out of bankruptcy 10 years later and founded the Greatest Show on Earth.
To try and fail and try again became part of the American ethos. I know it won't be easy. But getting out from under your debts will buy you the time and resources to rebuild your finances.
A couple of practical suggestions: You mentioned several worthwhile family goals, but you'll need to establish priorities. For instance, instead of saving money for college, I would focus on making sure your children do well in school and take college prep classes.
Despite high college costs, ample financial aid is available for qualified students. You may want your family to have the security of a home, but ownership is really expensive (and you would pay a high interest rate on any mortgage). You'd be far better off financially by renting.
