Getting Out Of Debt
By Crystal Newton | March 22, 2011
I would like to tell you about a serious of poor choices I made, how they led to my financial downfall and eventual bankruptcy.
I also want to encourage you by telling you some of the things God did to pull me through those circumstances.
My first mistake was going into business with a friend I trusted.
I had observed this man’s ethics, and believed him to be an honorable, God-fearing person. He and I had worked at a printing company together for more than two years when we started a design and printing company of our own. Over the course of seven years, however, this man abandoned his morals, began embezzling from the company, and eventually, I knew I needed to get out. Fortunately my then-husband provided me with a reason – when he accepted a job in Oregon.
My second mistake was not hiring the appropriate advisors:
In both financial and legal matters, I often figured I could “do it on my own” on several occasions, also tried to hire appropriate advisors and somehow – I still got bad advise.
In the process of selling my half of the business to my untrustworthy partner the business structure was changed from a partnership to a corporation. However, due to the lack of good legal advice, a very simple eight-dollar form was overlooked. This simple form, would have dissolved the partnership and removed my name from everything regarding the company.
About six months after the sale of the business to my partner, I was served with paperwork telling me that I was being sued. A business which had sold my former company some faulty equipment wanted their money. My ex-partner, who had agreed to cover all liabilities, had – not too surprisingly – chosen to avoid this responsibility.
The third mistake:
If you ever have to go to court… make sure anyone testifying on your behalf regarding the case DOESN’T LIE. Not surprisingly, my ex-business partner lied on the witness stand - and, also not surprisingly, we lost the case.
My ex-business partner, who had long been enamored with the concept of bankruptcy, choose, once again, to avoid his responsibilities – and declared bk. (Even though, to this day, he is running the business we built together.)
At that point, I no longer had an income, my then-husband had just divorced me, and people wanting more money from me than my entire net-worth.
There were quite a few days during that time, when I just wanted to give up. But, I knew that God had purchased me for a price, and my life was worth more to Him than “financial success”, and through it all, God continually proved his love and provision for me.
Eventually God led me to the conclusion that I would have to sell the home I enjoyed, leave the area I loved and move back to southern California to have any income at all.
Unfortunately, selling and moving didn’t even begin to cover the business debts that were stacked up against me. Although I was able to pay off every personal debt I had incurred, the business debt was beyond my ability. So I filed for bankruptcy.
Once again, however, I did not have adequate representation, and in spite of watching 15 to 20 people have their debts wiped clean in a matter of minutes – the man overseeing the bankruptcy court decided I needed to answer quite a few more questions. Instead of granting me the bankruptcy, he chose to require that I provide a year of financials showing where every penny had gone.
Once again I was completely overwhelmed. But God provided help – Tim, who had been a bookkeeper for quite some time, patiently helped me assemble a three ring binder and submit it to the court. We praised God together when the court granted me the bankruptcy.
If I had only known… that the State Board of Equalization (responsible for collecting state sales taxes) was ALSO after my ex partner for Sales tax that the company owned… and that if I had delayed my bk for only one more month… that debt would have been written off in the bk as well… but I didn’t know…
I found out when they took the last $200 out of my savings account!
At this point, I figured I’d never be able to have a bank account again. I was operating on a cash basis just so I’d have gas money. I was very blessed however, that in spite knowing all about my financial woes Tim still wanted to marry me!
Soon after our wedding Tim mentioned my issues with the State Board of Equalization to Jeff, a mutual friend of ours. Jeff has a habit of finding old friends in parking lots… and he did that… he found another mutual friend, John, who just happened to work at the State Board of Equalization. When Jeff told John of my woes – John was shocked that I was involved in the mess with my old company – a mess so well known at the State Board of Equalization that John had heard plenty about it! John told us that they knew my old company had the money – and that my ex partner was hiding the companies bank accounts. Because they couldn’t find my ex-partners money, they were going after mine. (Due to not filing that $8 form!) So… I talked to another friend of mine, who was still doing printing work with my old company. I asked if he would be willing to give me a copy of the back of a recently cancelled check used to pay my former partner – so that the State Board of Equalization could get the money from the company that owed it!
And that is just what happened. Tim and I heard, on our first anniversary, that the State Board of Equalization had finally been able to collect the money, and my name was no longer associated with any future debt the company might incur. Once again, we praised God together!
Soon after this Tim and I moved to a new project – errr… I mean house. We worked very hard on fixing up that house, which had gotten stuck in the 1960’s – eventually it was very beautiful. This led us to begin attending a new church. Soon after we started attending the pastor gave a sermon about finances that struck a cord with Tim and I. That Sunday, before we arrived back home we chose to do our best to eliminate as many of our debts as possible – so as to free up our lives for the activities that God would have us do – instead of being slaves to our debt.
After living in the house for just enough time to get most of the projects finished, we began to wonder if we should move. We had a horrible neighbor – but that wasn’t the only issue. We also had a very high financial overhead. We prayed about it and finally decided to lay a fleece before God. Our appointment with our tax-man was at hand – we asked God to lead us in our decision whether or not to move by the amount of taxes we would or would not owe. Our tax-man gave us a figure that was $1,000 over what we had laid before God. The house went on the market shortly thereafter.
We cannot take any credit for selling at “just the right time”. God led us to that decision. Shortly after we sold, however, the California real estate market was hit hard by the beginning of our nations current financial crisis.
Since moving here, we have continued our financial education by taking a six-month course in real estate financing, and reading many books. We have chosen to get off the “plastic” habit, and no longer use credit cards.
Every day we continue to try to make choices that lead us toward financial freedom.
One of the first things we did was kick the daily “Starbucks” habit - saving us over $10 a day! Sometimes those choices are about big-ticket items – like the difference between a newer four-wheel drive truck, or less expensive barnyard excavation that made the current truck sufficient. More often the choices we make are about smaller items – like finding great “gently-used” items at the local “baby consignment” store. (Especially rewarding when the baby outgrows something in less than a month!) Or even simply delaying a shopping trip until after payday!
The freedom, peace and confidence that God has given us through this process is indescribable.
Back
I also want to encourage you by telling you some of the things God did to pull me through those circumstances.
My first mistake was going into business with a friend I trusted.
I had observed this man’s ethics, and believed him to be an honorable, God-fearing person. He and I had worked at a printing company together for more than two years when we started a design and printing company of our own. Over the course of seven years, however, this man abandoned his morals, began embezzling from the company, and eventually, I knew I needed to get out. Fortunately my then-husband provided me with a reason – when he accepted a job in Oregon.
My second mistake was not hiring the appropriate advisors:
In both financial and legal matters, I often figured I could “do it on my own” on several occasions, also tried to hire appropriate advisors and somehow – I still got bad advise.
In the process of selling my half of the business to my untrustworthy partner the business structure was changed from a partnership to a corporation. However, due to the lack of good legal advice, a very simple eight-dollar form was overlooked. This simple form, would have dissolved the partnership and removed my name from everything regarding the company.
About six months after the sale of the business to my partner, I was served with paperwork telling me that I was being sued. A business which had sold my former company some faulty equipment wanted their money. My ex-partner, who had agreed to cover all liabilities, had – not too surprisingly – chosen to avoid this responsibility.
The third mistake:
If you ever have to go to court… make sure anyone testifying on your behalf regarding the case DOESN’T LIE. Not surprisingly, my ex-business partner lied on the witness stand - and, also not surprisingly, we lost the case.
My ex-business partner, who had long been enamored with the concept of bankruptcy, choose, once again, to avoid his responsibilities – and declared bk. (Even though, to this day, he is running the business we built together.)
At that point, I no longer had an income, my then-husband had just divorced me, and people wanting more money from me than my entire net-worth.
There were quite a few days during that time, when I just wanted to give up. But, I knew that God had purchased me for a price, and my life was worth more to Him than “financial success”, and through it all, God continually proved his love and provision for me.
Eventually God led me to the conclusion that I would have to sell the home I enjoyed, leave the area I loved and move back to southern California to have any income at all.
Unfortunately, selling and moving didn’t even begin to cover the business debts that were stacked up against me. Although I was able to pay off every personal debt I had incurred, the business debt was beyond my ability. So I filed for bankruptcy.
Once again, however, I did not have adequate representation, and in spite of watching 15 to 20 people have their debts wiped clean in a matter of minutes – the man overseeing the bankruptcy court decided I needed to answer quite a few more questions. Instead of granting me the bankruptcy, he chose to require that I provide a year of financials showing where every penny had gone.
Once again I was completely overwhelmed. But God provided help – Tim, who had been a bookkeeper for quite some time, patiently helped me assemble a three ring binder and submit it to the court. We praised God together when the court granted me the bankruptcy.
If I had only known… that the State Board of Equalization (responsible for collecting state sales taxes) was ALSO after my ex partner for Sales tax that the company owned… and that if I had delayed my bk for only one more month… that debt would have been written off in the bk as well… but I didn’t know…
I found out when they took the last $200 out of my savings account!
At this point, I figured I’d never be able to have a bank account again. I was operating on a cash basis just so I’d have gas money. I was very blessed however, that in spite knowing all about my financial woes Tim still wanted to marry me!
Soon after our wedding Tim mentioned my issues with the State Board of Equalization to Jeff, a mutual friend of ours. Jeff has a habit of finding old friends in parking lots… and he did that… he found another mutual friend, John, who just happened to work at the State Board of Equalization. When Jeff told John of my woes – John was shocked that I was involved in the mess with my old company – a mess so well known at the State Board of Equalization that John had heard plenty about it! John told us that they knew my old company had the money – and that my ex partner was hiding the companies bank accounts. Because they couldn’t find my ex-partners money, they were going after mine. (Due to not filing that $8 form!) So… I talked to another friend of mine, who was still doing printing work with my old company. I asked if he would be willing to give me a copy of the back of a recently cancelled check used to pay my former partner – so that the State Board of Equalization could get the money from the company that owed it!
And that is just what happened. Tim and I heard, on our first anniversary, that the State Board of Equalization had finally been able to collect the money, and my name was no longer associated with any future debt the company might incur. Once again, we praised God together!
Soon after this Tim and I moved to a new project – errr… I mean house. We worked very hard on fixing up that house, which had gotten stuck in the 1960’s – eventually it was very beautiful. This led us to begin attending a new church. Soon after we started attending the pastor gave a sermon about finances that struck a cord with Tim and I. That Sunday, before we arrived back home we chose to do our best to eliminate as many of our debts as possible – so as to free up our lives for the activities that God would have us do – instead of being slaves to our debt.
After living in the house for just enough time to get most of the projects finished, we began to wonder if we should move. We had a horrible neighbor – but that wasn’t the only issue. We also had a very high financial overhead. We prayed about it and finally decided to lay a fleece before God. Our appointment with our tax-man was at hand – we asked God to lead us in our decision whether or not to move by the amount of taxes we would or would not owe. Our tax-man gave us a figure that was $1,000 over what we had laid before God. The house went on the market shortly thereafter.
We cannot take any credit for selling at “just the right time”. God led us to that decision. Shortly after we sold, however, the California real estate market was hit hard by the beginning of our nations current financial crisis.
Since moving here, we have continued our financial education by taking a six-month course in real estate financing, and reading many books. We have chosen to get off the “plastic” habit, and no longer use credit cards.
Every day we continue to try to make choices that lead us toward financial freedom.
One of the first things we did was kick the daily “Starbucks” habit - saving us over $10 a day! Sometimes those choices are about big-ticket items – like the difference between a newer four-wheel drive truck, or less expensive barnyard excavation that made the current truck sufficient. More often the choices we make are about smaller items – like finding great “gently-used” items at the local “baby consignment” store. (Especially rewarding when the baby outgrows something in less than a month!) Or even simply delaying a shopping trip until after payday!
The freedom, peace and confidence that God has given us through this process is indescribable.