I assisted my friend who had a bunch of consumer debt that he got behind in, after he got seriously ill and suddenly could no longer work. He was leaving his phone off the hook a lot. He defaulted on a bunch of debt. He did manage to pay off a few things. He had a couple of credit cards that he could still use. I told him to pay for everything with a credit card, but pay off the credit cards in full each month. After doing that for a few years, he now has a very nice credit rating of over 800. Every week he gets offers from banks wanting to lend him money at attractive interest rates. Rebuilding credit is more possible than one might imagine. Banks whose credit cards he defaulted on 10 years ago now want to issue him credit cards again.

What banks care about is what they think you'll do in the future, NOT what you did in the past. They only care about past behavior, if they believe it predicts future behavior. But they are very open to being persuaded that a person's behavior has changed, IF they see evidence of a sustained change in how a person handles money.

Lots of extremely successful people have gone through bankruptcy. 0ur economic/legal system is designed to allow people to take chances and fail and start over again . . . even repeatedly. If everyone was so cautious and careful that no one ever risked getting into financial trouble, we'ld all still be wearing loin cloths and living in caves. Dump the guilt. You're allowed to try things that don't work out . . . and then try again. The banks and businesses you weren't able to pay back were founded by men and women who had the same thing happen to them. A rich, strong bustling economy depends on people willing to take risks that don't always work out. That's why we got rid of debtors' prisons. It's wrong to lie in order to get a loan. But if you fill out a credit application honestly, it is partly the job of the bank to not lend you money foolishly. Banks have been guilty - sometimes - of putting a ridiculous amount of temptation in front of people who lack financial experience. That is wrong. Handing out too many credit cards to college kids is wrong for banks to do. But they've done it. Companies that lend money have a moral obligation to act responsibly. They're supposed to discourage unwise borrowing. "Payday loan" companies do the opposite and offer cash the way drug dealers offer dope. All the blame does not belong on debtors.