In a sense, filing for bankruptcy is a bit like running a rowboat onto a sandbar. You’re likely to chew up the boat, but you are also likely to live and move on.

I wrote a couple of weeks ago about going bankrupt. We filed for bankruptcy in August, we were released from bankruptcy in November. Bankruptcy is hard on one’s finances, of course. But it is also hard on pride and the ego, especially if you are an older man raised to believe going bankrupt is one of the most profound failures a man can experience. It was, my father always said, a sign of disgrace.

The country’s first bankruptcy laws were passed in 1800, bankruptcy was considered a criminal act, a way of forcing people and businesses with huge debts to pay at least some of it to their creditors. In 1978, bankruptcy laws were dramatically revised,  the bankruptcy proceedings were turned over to specially appointed courts and judges who oversaw the filings and distributed assets to creditors, if there were any assets.

 

In many countries, I could have been jailed.

Notions of bankruptcy changed again after 2008 when the real estate crisis altered the financial futures of many Americans. People who invested their money and security and real estate lost their money and security. Throw in divorce and the collapse of my industry – publishing – and I suppose, in retrospect it became inevitable. We couldn’t sell our farm for more than four years.

Bankruptcy was different from what I expected, both better and worse. The idea behind bankruptcy is to make it possible for people who are overwhelmed financially to escape their debts. This is an enlightened idea in a country that probably would never consider bankruptcy today. It came from the other time, and I have this feeling our Congress would probably have favored the idea of debtor’s prison. So perhaps I am fortunate.

The idea behind bankruptcy is that it should be hard and painful enough so that very few people will choose to do it, or walk away unscathed.  So it is. You have to go to a lawyer, sort painstakingly through every detail of your personal and financial life. Bankruptcy is not free, there are court and legal costs.

There is a ritual humiliation process, you have to sit behind a computer for four hours and convince a software program that you know what a budget is and understand that you can’t spend more than you earn, even if you starve. Or drink too much or buy fancy cars. Bankruptcy does not cover everything. It doesn’t cover mortgages and/or taxes, you are on your own with those. If your car is expensive, it can be seized by creditors. So can second houses and boats and private collections of things.

Bankruptcy court can be simple or harrowing. The bankruptcy judge gets a percentage of whatever it is of yours that he or she can seize or sell to creditors. Generally speaking, your home or cheap car and personal belongings are safe. There was some concern that a judge might seize the rights to my books, except that I don’t own any of them. Creditors are invited to come to the bankruptcy hearing to try to get your money or property. We were good, the attorney told us. We had nothing to lose. Nobody bothered to show up for us.

You make up your asset lists carefully and honestly. If you lie to a federal judge, you will be sorry.

it used to be that nobody like me was ever in bankruptcy court, but that changed after the recession. Lots of people like me are in bankruptcy court now.  First, you meet with a bankruptcy lawyer who decides if you qualify. No problem.  Once you decide to file for bankruptcy, you are advised to stop paying your debts immediately. There is no point, since they would all be canceled.

This bothered Maria and I, so we paid as much as we could for as long as we could. A dumb thing to do, in retrospect, but shame and guilt are powerful emotions, they do not die easily. Once you stop paying, the calls and threats start pouring in, this is when you really feel some shame and embarrassment. I was working in my study when the women who comes in once in a while to help clean up the farmhouse came in to vacuum, and a bill collector called to leave an angry and threatening message on the answering machine. She heard the message and came and put a hand on my shoulder and smiled, “it’s okay, Mr. Jon,” she said. She was from Mexico.

At the dump, Bob, a tough and strong man who works the bins and helps us carry the garbage cans from the car, stopped and patted me on the arm.”I read your blog, don’t feel bad,” he said. “I’ve been there, I lost my house, car, everything….It was after my divorce.” He squeezed my hand, we didn’t need to say another word. I was very much moved.

I answered the first few messages from the bill collectors, hoping to explain things. My lawyer laughed when I explained the concept. Don’t do it, he said. I figured out their tricks. Pretending it was an emergency, pretending they had important information about my health insurance, pretending they were calling with news about my family. It became a matter or pride to defy them.

At first, I really thought I ought to answer these calls and try to explain. I wasn’t a deadbeat, I had never missed payment on a bill in my entire life until just a few months earlier, I wanted to say that we were finally overwhelmed by trying to keep Bedlam Farm out of foreclosure.

I had been a faithful and busy credit card user for many years, more than 40, actually, and I had this curious fantasy that my gold card company would take this into account somehow, and call me up. In my fantasy, they would say, “oh, hi, Mr. Katz, you have been a good and faithful paying customer for so many years, you gave us so much money, we are sorry you are struggling right now, how can we work this out together.”

I am sure many of you are shaking your heads at the idea that a man who writes books and is supposed to be smart could be so dumb. The calls were angry and unrelenting, demanding and accusatory. When will  you pay? You owe us money, and we will come after you with tomahawks and tanks to get it! Nobody understood and nobody cared much to hear my explanation. But I was a law abiding member of the system, I was in it all of my life. How would I live outside of it?

And that, really, is what bankruptcy is. You step outside of the system you have been told all of your life is essential to your survival. The system wasted no time in responding.

The minute our lawyer filed for bankruptcy, every credit card we had was cancelled, our whole idea about how to live and pay for our lives in America was upended. No one asked how we might live this way or cared, we were way out there and on our own. We would be out on Black Friday looking for flat screen TV’s or the newest Ipad.

But then, it seemed to end, not at once, but in bumps and starts.

For all the tension and anxiety around the bankruptcy, it was so much better than it had been before when we were drowning in obligations we could not possibly meet. It took me a long time to understand that. We felt more peaceful, it was quieter, the end of the month was not traumatic.

Before, I could not see any way out of it. Now I could. That was a very big deal.

We understand for the first time that there is no security but the security inside of us, in our hearts and souls, in our love for one another. There is no real security in money or houses or retirement accounts, we met enough people along the way to hear that over and over again. In a sense, our economy runs on fear. We are frightened into believing we can buy our way to safety and security. That is a lie. There is nothing you can amass that life can’t snatch in a flash.

After we filed, the shame began to ease. It was not so terrible. People aren’t supposed to know that, I know, but I have to tell you there was much good in it. Our friends supported us, it did not seem so big a deal to them.

The ego is a fearful thing. Why did I wait so long?

Then I decided to stop flaying myself at all and move on. Maria felt the same way.  When you file for bankruptcy, you are protected. The creditors are supposed to stop bothering you. Some don’t get the message, some don’t want to hear it. By and large, they have left us alone, and I think often of the struggles of people without the money for a good lawyer or the experience or strength to stand up for themselves. I think about the poor and the elderly, they have it so much worse than I do. How difficult for them to navigate this system.

Maria and I came through it together in the most loving and committed way. It made us better. It made us stronger. We are ready for pretty much anything. We can handle almost anything.

Like fear, bankruptcy is a geography, a space to cross. There is another side, you just have to get to it.

We are freer now to consider our lives and how we wish to live our lives. We no longer feel it is essential to own a home or have a bunch of credit cards. We have not taken a real vacation in some years now, we find small and inexpensive ways to have a lot of fun. We avoid luxury restaurants. We don’t go to New York City much, or at all. We may never get to see The Book Of Mormon in New York City.

I am learning to differentiate what I need from what I want. I am resourceful and creative about things like heat, car repairs, the latest gadget. I used to turn up my nose at negotiating over prices, now I am like a haggler in a Turkish bazaar. Some days, I even feel shrewd.

We are happier than ever, curiously. Going bankrupt did not break our spirit or leave us sour. We have no complaints.  Quite the opposite. We are loving our work, living our life,  planning for our future together, learning every day what is important, what is not.

Our lawyer says that any day now, credit card companies will contact us to offer us credit cards at high interest rates with low limits – about $500. They make a lot of money doing it, he says. You just have to pay every dollar every month, and you can begin your financial recovery, he says.

And here’s the emotional part. They want you to feel bad, they need you to feel bad, the system depends on it. Don’t let them make you feel bad. Or small. Most of the people I met in bankruptcy court were like us, they would have done anything to avoid being there, they never imagined they would ever be there. One day you are in the system. One day you are not.

Sometimes in life, you are just hit by storms, and your sense of worth and value depends on how you respond. Do not beat up on yourself, leave that to the bill collectors.

Getting a new credit card may or may not be a smart thing to do, but we have already begun our recovery. When we recognized the reality of our lives. When we agreed to stand together, and draw closer, no matter what. When we were honest and truthful in  our dealings. When we were not intimidated or terrorized.

When we were open and forthcoming. When we fought to keep our home and did. When we have the best time going to a Thai restaurant and a movie. Or browsing in a thrift shop. Or going online to bicker for a cheap hotel room for a night or two. Or reading a good book by the fire.

I felt a bit like Lord Nelson on the deck of the HMS Victory when he came out of a fog to find himself alone against a vast Spanish Armada. His fleet was lost.  “What shall we do?,” asked his terrified lieutenant, “shall we turn and run?”

Nelson didn’t skip a breath, he turned to his aide and said coolly, “why no. Sound the attack!” We didn’t run either.

If security is not about money, neither is recovery. You are a good man, a dear friend told me. Money has nothing to do with that.