The Shame that Comes With a Bankruptcy – Part 1

I took a mortgage application a few days ago. The clients actually communicated with me, as a result of a blog I wrote a few months ago.

This couple had a bankruptcy five years ago and now wanted to refinance their home. They were paying 6.875% for a rate and have owned their home for 7 years.

When I asked them why they waited so long to refinance, you could have heard a pin drop for what seemed like minutes. The wife finally said, we were ashamed about our bankruptcy. We didn’t think that any lender would want to do business with us.

They shared that the husband was fired because of a sexual harassment charge. The matter eventually went to court, he was exonerated of the charge, but the company wouldn’t re-hire him and eventually worked out a settlement, but the damage was already done.

They were emotional and financial wrecks and had no choice but to file for bankruptcy. The emotional part has left many scars for the entire family, one of which is shame. I honored their courage to speak about what the two of them and their three children have been and are still going through.

Employment was a real problem, as he had to disclose his history during any interview. He wasn’t getting hired. At the time of his firing he was earning $150,000 a year. So, eventually decided to go back to school and prepare for a new and different career. 

He is now earning $60,000 a year, after starting at $40,000 a year 4 years earlier. He sees himself as very fortunate to have a job and the ability to contribute to the family. They both consider themselves fortunate to have jobs.

The refinance will save them $513 per month. When I told them the amount of the monthly savings, they felt like they won the lottery and how blessed they were. I am too!