7/17/2012 7:23 PM ET|
Bankrupt at 23: How I survived
Youthful spending indiscretions led one young woman to insurmountable debt. Find out how she got in over her head and how a clean slate helped her move on.
For as long as I can remember, my father warned me about the dangers of credit cards.
After I got my first job the summer after my senior year in high school, it became clear just how irresponsible I was with even that minimal income. The second I got paid, I would spend my whole paycheck.
It's not as though I was buying anything I needed, because at the time, I was living at home. However, that didn't stop me from figuring out ways to burn through my funds.
As a result, my parents suggested I never ever get a credit card, because it was guaranteed to lead to trouble. "Not only is math not your strong suit," my dad warned, "but you also have zero concept of the worth of a dollar."
He was right.
I was only a few weeks into my first semester of college when a credit card company in the Student Union Building lured me in with promises of building credit, learning responsibility, and, most importantly to me, access to invisible funds that were not mine. I was sold. I listed my parents' combined income on the application (since I was a student, after all), and received my first credit card a few weeks later. I didn't tell my parents because I was 18 years old, mature and ready to prove them wrong.
Me and my card
Being a grown-up means starting a credit history. And so I made my first purchase: shoes.
That was fun and easy, I thought.
I waited until I got my first paycheck from my work-study job, paid off the shoes in their entirety, and then bought some more shoes. With a minimum payment of $15, I decided I could buy lots of things. I also bought clothes. And treated my friends to lunch if they didn't have the money.
Once the local pizza place started taking credit cards, I ordered pies for my roommate and me almost every night instead of going to the dining hall. (Have you found yourself in a similar spending spiral? Learn how to stop it here.)
By the time sophomore year rolled around, I had two credit cards and a couple of thousand dollars in debt. But I had just gotten a part-time job at the Gap, which paid a whopping $8.50 an hour; in other words, I was about to hit the big time. However, working at Gap meant wearing my employer's clothes. Before my first day, I bought several "key" pieces in preparation for my fancy new job.
Retail comes with some major perks, especially if you're a college student who firmly believes you can never have too many clothes. I felt it was my responsibility to take advantage of my employee discount -- 50% off regular-priced items and 20% off sale stuff.
Enter: credit card No. 3
I got a third card because I had hit my limits on the two others. But I still had things to buy and a gorgeous new boyfriend who was an art student in Boston. Someone had to pay for things!
Once again, I put down my parents' combined income and "padded" it a bit with what I assumed I would eventually be making when I graduated -- with a degree in English. Voilà!
A few weeks later, I received a sturdy envelope in the mail that could only mean a new credit card. My guy and I were going to Bella Luna, a great little restaurant downtown that we college kids could usually go to only when our parents were in town. Just the two of us.
My monthly minimums on the three credit cards were only around $150. No problem! I had a job, and if I couldn't swing it, I'd call Mom and Dad for grocery money. Problem solved.
. . . And then a fourth
In my senior year of college, I broke up with that boyfriend, and I was in need of retail therapy that could only be accomplished with a fourth (and final) credit card. But with my existing credit-card balances pushing $18,000, I was given only a $1,000 spending limit on the newest card.
Considering my previous lifestyle, $1,000 wasn't going to cut it. I bought myself some shoes, Grey Goose vodka and pizza, and went home to drown my sorrows.
When I graduated from college, I was somewhere between $20,000 and $25,000 in debt, thanks not only to my own irresponsibility (which also led to late fees) , but also to ridiculously high interest rates.
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So the writer Ms. Chatel committed fraud on the credit card applications (by grossly over-stating her income).
If she had filled out the applications with truthful income numbers, she would not have been issued any credit or low credit limits. Therefore she might not have gotten so deep in debt.
She may not understand math, but she understood how to lie. Why wasn't she brought up on fraud charges?
So morally you think you don't owe those credit card companies money. You spent the money and you use the cover of bankruptcy to evade repayment. I hope you sleep easy at night, but you still a thief in my book. Would it had been any difference if you had borrow money from a friend. No, you would have stiffed them also.
Have you ever thought about paying back what you owe instead writing this article showing how greedy and morally corrupt you are?
There was no second date.
Fluffy-headed bimbos (including male bimbos, to be fair) who have no concept of money management should not be allowed to procreate.
Wow - I guess the military service and string of terrible jobs where I made barely enough to survive while paying for an education and living in a shoe box sized rat infested apartment was the wrong way to go. Should have gotten credit cards and paid for it all through those then gone bankrupt.
I could have written a nice little article saying how I was irresponsible but learned my lesson.
America is dead. No one is responsible for anything anymore and there certainly aren't any rewards for "working for it"
is this supposed to be a feel-good article? because all it left me with was the fact that the writer was a colossal idiot at 23.
Nice article about a legalized theft scheme; spend as much as you can, acquire more credit by lying on the applications, and then claim bankruptcy. It must be nice to start with a clean slate and knowing you can do it all over again ten years later.
Doesn't sound like much of a survival story. Try talking about some of the people with medical bills, foreclosures, lawsuits and a family to feed who NEED to file bankruptcy - not just about some stupid teenager with retail credit cards. Ugh. This story gives bankruptcy a bad name. Also the story makes it sound like her student loans were forgiven in the bankruptcy too??? As far as I know, that only happens like 1% of the time.
Good going, just tell the rest of the kids out there to spend as much as you can get away with and file bankruptcy. That fixes it, and you get to start over in a few years. That was the problem in the first place, refusing to face the problem NOW! The finance companies lose and that drives the rates up and guess who pays for your excesses? The rest of the population that thinks it's not ok to welch on your commitments. And then when the finance company goes broke, who bails them out? The taxpayers!
So your little workshop for kids in school basically says let everybody else pay because you're young and are going to be king or queen soon anyway. Gee thanks for forcing your bad decisions on me and the rest of the population.
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