Los Angeles, CA

My Husband Bankrupted Me

Elle Silver

Here's how that felt.

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I’ll never forget the experience of going to bankruptcy court to process my bankruptcy. It was located in Downtown L.A. First, you waited in a big room, packed with people, where you sat for hours. This was pre-pandemic Los Angeles, and so nobody was masked.

It was like being at the DMV. There were people from every walk of life: people who looked rich, people who looked poor, and people who looked middle-class. All races and ethnicities.

But one thing linked us all. All of us had made terrible financial decisions that had landed us here.

After a couple of hours of waiting, my name was finally called. I was directed to a windowless office where a civil servant was waiting for me.

He asked me a bunch of questions. He kept telling me to speak up because I was speaking in such a low voice. He was recording the whole thing.

I felt too mortified to admit what I'd done so I kept whispering as if that would make this whole thing go away. I was so angry at myself. I'd taken out a loan for my husband to invest. He invested it in a Ponzi scheme.

When the scheme fell through, I was the one left owing money.

In short, my husband bankrupted me.

This made me feel terrible.

My husband bankrupted me.

Seven years into our marriage, I let my husband take out a loan in my name. You might say this was a stupid thing to do. At the time, I didn't realize just how dumb it was for me to do this for my husband, even if we were married.

I took out the loan in my name because my husband was bankrupt and had bad credit. He had invested in real estate before the financial crisis.

When the housing bubble popped, he could no longer afford to keep paying the mortgages on the ten properties he owned because their value had dropped. He could no longer scoop out the equity, which was what we had been living on.

He defaulted on the loans for the properties he owned. As such, to survive, he needed me to take out a loan for him.

He wanted to invest the money in a new opportunity that was supposed to reap huge rewards. The money we would earn would pull us out of the financial morass the housing crisis had left us in.

We were ruined. We were going under. So just sign on the dotted line, everything will be okay, he said.

I believed my husband. I trusted him. Besides, his money was my money and vice-versa, right? He would be there to protect me, regardless. If this deal fell through, he had my back.

But it wouldn't fall through because he said it wouldn't.

I wanted to believe this.

Still, I couldn't deny the whole thing sounded sketchy from the get-go. Worse, I didn't do my due diligence to vet this scheme. I counted on my husband to do that.

But it was more than that. I didn't want to do my due diligence because I knew if I looked at this sketchy deal too carefully, I would get scared. I'd see it for what it was.

Instead, I wanted to have faith. Everything would be okay. But the truth was, I didn't want my life to change.

I wanted to go on living the same comfortable life, in the same house, eating in the same restaurants, buying the same clothes, and continuing to pay the same nanny to take care of our children.

I didn't want to get a day job, so I filled myself with hope. But as you already know: this investment scheme exploded in our faces.

It was a Ponzi scheme.

The architect of the Ponzi scheme ultimately went to prison. Still, the bank that loaned me the money started calling. I couldn't pay them back.

My husband didn't have any money either. We were ruined. That's when the realization came that I also had to claim bankruptcy.

Our lives imploded after I claimed bankruptcy.

At the end of the interrogation session with the civil servant at the bankruptcy court, I was told I had to pay a huge fee to even get my debts forgiven. I agreed to pay this amount and then I emerged back into the daylight.

I remember how the sidewalks sparkled under the hot L.A. sun. There were shards of mica in the cement and when the shards caught the sunlight, the sidewalk looked dazzling.

I felt glittering Los Angeles all around me. The truth was, the streets were actually dirty.

Just like the Ponzi scheme I believed would save me, these diamonds in the sidewalk weren't real.

Just like this city itself with all its promises of perfect lives; it was all a lie.

Even though my debts were forgiven, I already had a sense our lives weren't headed for anything better.

They weren't. We would ultimately lose our house. We would ultimately divorce.

And guess what, then my husband didn't have my back. I was left with a super-low credit score and was therefore unable to get an apartment on my own without my father cosigning for it.

So if you want to know what it feels like to be bankrupted by your husband, this is it. I don’t recommend the experience.

Never take out a loan for someone else, not even your spouse. Learn from my mistakes.

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I'm a relationships expert with a focus on post-divorce dating and family. Everything I've learned about love, I've learned the hard way. You can learn from my mistakes.

Los Angeles, CA
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