Whitney’s Bankruptcy Journey
On this episode of Financially Naked: Stories from The Financial Gym, Kylie and Whitney explore Whitney’s personal journey through Chapter 7 bankruptcy. While Whitney has shared parts of her story before, today she opens up in detail about how she made the decision, the emotional and financial hurdles she faced, and what the actual filing process was like.
Whether you’ve considered bankruptcy or just want to understand it better, this conversation breaks down the stigma. It offers a compassionate, step-by-step view of what it really means to get a financial fresh start.
Podcast Notes
When Whitney was self-employed, she found herself getting deeper and deeper into credit card debt. Between an inconsistent income and reinvesting any money earned into more coaching and courses to grow the business, the debt felt crushing.
She was waiting for a business breakthrough that never came while hoping her situation would turn around. She felt stuck and ashamed.
She learned about bankruptcy online through creators like MoneyWiseLawyer. It planted the seed that this could be the fresh start that she needed.
After keeping the debt a secret from her mom for over a year, she finally talked with her about it. Her mom suggested working with The Financial Gym.
Her first meeting with a Financial Trainer eased her anxiety and shame. Getting her plan affirmed what she already suspected: bankruptcy was the best path forward.
Emotions and Mindset Shifts
One of the hardest parts of the bankruptcy process emotionally wasn’t actually filing. It was initially admitting to her mom and friends that she was in debt and needed help.
Once she made the decision, she felt empowered and determined to move forward without shame.
Filing for bankruptcy provided her a clean slate and the opportunity to break free from the short-term thinking and destructive financial patterns she had been in.
She used to think the only way to build wealth was through entrepreneurship, but through the bankruptcy process, she learned so much about money management and practical money skills.
Living cash-based (a requirement of the bankruptcy process), forced her to create new habits. She was tracking all of her expenses by hand, budgeting, and sticking to systems that kept her on financial track.
The Process of Chapter 7
When filing for bankruptcy, you need to work with a lawyer. The Financial Gym recommended a lawyer who helped Whitney file for Chapter 7 bankruptcy, which is for people who are unable to pay off their debt.
For her, the process took about 6 months. Depending on your situation, it may take more or less time. The most time-consuming part was gathering the paperwork and financial statements to submit to the court.
You have to stop spending on credit cards completely and be able to explain your transactions to the court. For Whitney, this part of the process was vulnerable, but also healing.
After the documents are submitted, the lawyer actually files everything with the court. From there, you have a meeting with a trustee to answer any last questions before it is approved.
Life After Bankruptcy
Bankruptcy was a good option for Whitney because she addressed the mindset and root cause of what got her into debt in the first place. Without that, the clean slate can be another opportunity to get back into debt.
She has still been able to rent an apartment after bankruptcy. She approaches the search with honesty, providing bank statements to prove to potential landlords that she is reliable. Having a cosigner can also help.
Filing for bankruptcy was a great learning experience for Whitney. It brought her a lot of clarity and peace. Her only regret was not reaching out for help sooner.
She has been quite open online about her journey. Online hate comments saying she ‘took the easy way out’ don’t bother her. She believes there’s nothing wrong with taking an easy approach rather than suffering through debt for years.
Her message to others: bankruptcy is not a failure. It can be a powerful reset if it’s done thoughtfully with a plan on how you will move forward.
If you want to work with a Certified Financial Trainer to help navigate your finances, schedule a free warm-up call today! If you have any ideas or questions for the show, send an email to trainerpodcast@fingyms.com.