How I Went Bankrupt at 23

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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 high school senior year, it became clear just how irresponsible I was with that minimal income. The second I got paid, I would spend it.

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 in which I could 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, more importantly, access to invisible funds that were not mine. I was sold.

I put down my parents’ combined income (since I was a student, after all), and received my first credit card a couple 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 (of course) so I made my first purchase: shoes.

That was fun and easy, I thought.

I waited until my first paycheck—I had a work-study job—paid off the shoes in their entirety, 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 pizza place started taking credit card numbers, I ordered pizza for me and my roommate 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 hey, I got 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 their 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 my responsibility to take advantage of my 50% off regular-priced items and 20% off sale stuff.

Enter: Credit Card Number Three

I got a third card because I was pushing my limits on the other two. I had things to buy, a new gorgeous boyfriend who was an art student in Boston, and someone had to pay for things!

When you’re applying for a new card, hey, I figured, just put down your parents’ combined income and “pad” it a bit with what you assume you’ll eventually be making with your fancy degree in English. Voilà!

A few weeks later, I could feel the sturdiness that comes with a new credit card in the mail. My fella and I would be going to Bella Luna—a great little restaurant downtown that we college kids usually only hit up when our parents were in town— this weekend after all!

My monthly minimums between 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

Once I reached senior year, the boyfriend and I had broken up and I was in need of retail therapy that could only be accomplished with a fourth (and final) credit card.

By this time, my parents knew about my cards, my father had done his fair share of yelling and had bailed me out several times for my monthly minimums already. But with my credit balance pushing $18,000, I was only given a $1,000 minimum.

Considering my previous lifestyle, $1,000 wasn’t going to cut it. I bought myself some shoes, Grey Goose vodka, pizza and went home to drown my sorrows (with my shoes on, of course, as they cost a pretty penny).

By the time I graduated from college, I was somewhere between $20,000 and $25,000 in debt, thanks to not only my complete and utter lack of responsibility, but also to late fees and ridiculously high interest rates.

What Was I Going to Do About $25,000 in Debt?

My parents had washed their hands of helping me, because I ignored their warnings, and, frankly, it was not their responsibility to help me if I was too stupid to realize what I had done.

True to form, I defended myself: I’m an English major! Numbers are not my thing! Credit card companies are liars! But really, the only person lying to me was myself.

After graduating, once that first college loan kicked in, I knew I had royally screwed myself. Not only was I in debt to the credit card companies, but I was also in debt to the University of New Hampshire for a hefty sum, too.

(Don’t let debt get the best of you. Start working on it today with our free Get Out of Debt Bootcamp!)

I moved back to my parents’ house and tried to come up with a game plan. That plan? I was going to finally move to New York City to be a writer!

“You’re not going anywhere,” said my father. “You’re going to get a job here, fix this mess, save up, and then you can do whatever you want with the rest of your life.”

“But I can’t be a writer in New Hampshire!” I protested.

“You should have thought of that when you were blowing money left and right.”

How I Decided to File Bankruptcy

Living at home, I got a job in the admissions office at a local college, which didn’t cut it financially, even if I was living rent-free at my parents’ house.

So I decided to file for bankruptcy.

A friend of the family suggested the idea. As the friend, who worked in finance, explained, there was no way I was going to get ahead money-wise if I didn’t try to wipe clean the slate of my “youthful mistakes,” and start anew.

Initially, I was completely against this, as were both my parents.

But, this friend explained, the debt had gotten so out of control I’d have to start making well over $100,000 stat (and still live with my parents) to just get even with the creditors. All that before I could even start dealing with my student loans!

After the judge approved the bankruptcy, I walked away with a clean slate … and the inability to have credit cards for the next seven years. It seemed like a fair deal considering what I had done, so I reveled in the weight that had been lifted. I also felt embarrassed it had come to that point.

Ten Years Later: What I’m Doing Now

Looking back, I clearly see not only the irresponsibility on my end, but the selfishness. I believed my parents would bail me out, as they always had, but I just kept taking and taking.

A few years after moving to New York City, I applied for a credit card again. Surprisingly, I got it. Before I could get into the same mess again, I bought a couple of things, paid them off immediately and cut up the card. The only credit card I have in my wallet these days is a Bloomingdale’s card with a very low minimum that I keep just in case I want to treat myself to something small.

It’s been ten years since I filed for bankruptcy, and although I’d like to be able to say I learned a lesson about money, that would be a bit of a lie.

I did learn that when it comes to money I am, for lack of a better word, an idiot. I have yet to discern the meaning between need and want.

However, as someone who is now completely aware of this, I do make a valiant effort to be wary of how I spend my funds. I make sure bills are tackled first, groceries second, savings third and only then will I indulge in things I want but don’t technically need.

(Need to set up a budget of your own? Start here.)

Apparently, people don’t need over 30 pairs of shoes. And sadly, for me that has been the most difficult lesson to learn.

Amanda Chatel is a writer based in New York City.

  • LaurenLever

    How were you able to ever rent again? I have had problems renting with just bad credit. It must have been a different time.

    • Lauren

      Yeah, I’m interested in finding out some of the other repercussions of filing for bankruptcy.  It seems like everything (eventually) just worked out for her. She even made it to New York–the most expensive city!

      • LaurenLever

        Perhaps she was using a cosigner or had a roommate, they tend to only care about  criminal background. Bad credit will screw you up for everything these days, unless you have someone who is willing to be a saint for you.

      • Amanda Chatel

        I think if I had a family, kids, a house, cars and all those, my story would be different. However, as a woman who doesn’t have any of that, the repercussions weren’t as bad as they would have been if I actually had “assets” and more to lose.

      • ksgirl73

        As someone considering bankruptcy I can tell you that every situation really is different.  Obviously your credit score takes a huge hit.  You can rebuild it, but it does take time.  You can get credit or even credit cards again, but often they will come with higher interest rates and an annual fee.  You will not be able to get an FHA loan on a home until at least 2 years after your bankruptcy has been discharged.  Some people have difficulty renting.  Some employers may deny you employment. That’s one of the things I think this article left out that’s important to understand is that although things have turned out well for Amanda, I’m sure there was a long period of time where she struggled with rebuilding her credit.

    • CleoBarker

       Most places if you so much as have a neutral credit score will cause problems, however, usually they only make you pay a higher deposit as long as there’s no eviction on your record.

      • LaurenLever

         Trust me, I know!! I have zero evictions, but it was still difficult for me, and I am all too aware of the extra deposits.

        • CleoBarker

           Thats just craziness. I keep hearing things like that, and it seems really unfair. :P

          • LaurenLever

             Austin is one of the fastest growing cities and I think I was looking in pretty high demand areas, so they could be picky.

    • Amanda Chatel

      When I first moved to the city, I lived with a roommate. We put the lease under her name. By the time I moved into my own apartment at 29, I was making enough money to prove to the landlord that I was more than financially stable. But since he was still a wee bit concerned, he asked for six months security deposit. Although I was doing quite well, six months was pushing it. I borrowed the money from my parents. It was the same summer my sister got married, so there’s been an ongoing joke in my family that while my sister got a wedding, I got an apartment in NYC for about the same amount. 

      I have been in this place for 5 years and have just re-signed for a sixth. After my first year here of proving that I was capable of paying my rent and always on time, the landlord returned the huge deposit, and it went back to my parents.

      So yes, it was tricky and a bit of a financial burden at the time, but fortunately, I have a family who was able to help me out. I realize others are not so lucky.

      • LaurenLever

         Yeah, that is really lucky! I have a solid income with no criminal background or evictions, but I do not make enough to provide 6 months of a deposit (nor do my parents) Credit is such a weird thing. Honestly at 31 I need to cut up my cards because they keep getting me into trouble (I watch my credit like a hawk, now, but I still manage to rack up high balances) I feel like there should be financial fitness test you should take before being allowed a credit card, just to protect idiots like myself from screwing up, such is the cycle of life though. The weak get preyed upon by the “evil” credit card companies, heh heh heh.

        • guest

           This is not the cycle of life…. the ‘evil’ credit card companies are doing what a lot of businesses do… make money off of people like you who do not know how to live within their means.  Once the saying was ‘cash on the barrel head’.  Now that means, if you don’t have the money in hand, DON’T BUY IT!

      • Brian

        The part I dont understand is how your friend said you could not even hope to get ahead financially if you made well over 100k, while living with your parents. Obv I am unaware of your other financial obligations, but this just does not seem to add up.

  • http://260daysnorepeats.blogspot.com Iris

    I feel you, I had to get a debt consolidation loan to deal with all my credit card debt after college…I would probably declare bankruptcy if it had any effect on student loans. 

  • Tabby822

    My husband and I are actually meeting with a bankruptcy attorney on Thursday. We are both in our early 30′s have 3 children have lost a home to foreclosure, relinquished a car back to the bank when we couldn’t afford the payment, racked up credit cards and then stopped paying on them, and collectively have over 80k in student loans with no degrees to show for it and low paying jobs. We are hoping filing will at least wipe out the cc debt, house, car, and medical bills so we can focus on paying down the student loans. We need a clean slate and with 3 kids depending on us it’s very important. 

    • kansasgal

      I’m fully supportive of families in your situation filing for bankruptcy because you’re experiencing true hardship. I’d much rather see your story and your outcome in an article here.

      The girl in this story was foolish and racked up debts for a bunch of junk. She took an easy way out even though she probably could have paid her debts over a few years. Not true hardship.

      Hope everything works out for you and your family.

  • Lbowling23

    I had a similar story, but thanks to my parents snooping it never got that out of hand. This was a great read!

    http://www.lbeeandthemoneytree.wordpress.com

  • Sadie

    Amanda, this article speaks directly to me! I too signed up for a credit card in the courtyard at college my freshman year, purely to get a free tee-shirt. If I calculated how much that tee-shirt actually has cost me, I would probably die!

    Now 33, I am still in debt, after multiple bail-outs by my mother and despite the fact that between my better half and myself we make over six figures. It turns out that age does not bring wisdom on its own. 

    I’ve concluded that I’m completely moronic when it comes to money and have finally decided to let my boyfriend (who I own a house with) know exactly how much credit card debt I have and turn the cards over to him. If I want to get married and start a family, this is the sacrifice I must make. 

    Thank you so much for your candor. It’s comforting to know I’m not alone in my money struggles. 

    Best of luck to you!

  • Guest

    What is the purpose of this article? Have we learned from this? The author lived irresponsibly, suffered no consequences and has gone on to make the same stupid mistakes again. Should we feel better that she now chooses to live above her means on her new “low minimum” Bloomingdales card? It’s just a couple small things after all. She clearly deserves to treat herself. Doesn’t sound like a valiant effort to me.

    What’s the lesson here, LEARNVE$T?

    • Danielle

      Agreed.

      A reader could have learned something if the writer ended up declaring bankruptcy and then eventually getting a credit card, and LEARNED how to use it to her advantage. 

      It seems as though the author of the article is a thirty something with no credit, and no urge to learn about becoming financially responsible. 

    • guest

      Wow, you really did not read the article. Try again this time with your eyes open.

    • Amina

      I think this is reality and that’s what I loved about the article. There’s no Snow White, Jesus resurrected from the dead happy ending here. We’re human and you can learn and change of course, but that won’t change who you are at the core – your strength, weakness, desires and needs. What I took away is to accept who you are and then try to find ways to work with that. 

      • Amanda Chatel

        Thanks, Amina! You read it and actually understood exactly my point!

      • Guest

        Reality is she really didn’t take any responsibility for huge amount of debt she amassed. She realized how difficult it would be to pay for all the things she had already purchased and consumed then chose the easy way out. The reality is we need better financial role models. In the end, she admits that she still doesn’t know the difference between a need and a want. I don’t believe that she has learned or changed, as you say.

    • Fern L.

      Guest, it seems you really want her to wear that hair shirt, doncha?  She DID learn from her mistakes, she certainly brought herself to take a cold hard look at her self-confessed ’selfishness’ as regards her relatiionship with her parents, her irresponsibility with money, and she ISN’T living ‘above her means’ with a ‘low minimum’ credit card – she’s learning how to use credit aqain. You offer no redemption for her confession or her revised way of life, just condemnation. I for one found this a very brave, VALIANT confession of something that is clearly all too common in this day of ridiculously easy access to credit.  Not many people would have the courage to lay this out in a public forum, and for that, I think Amanda should be thanked, not castigated for her failings – which clearly aren’t yours!. Good for you and congratulations on living a financially conservative, responsible life, but I think its worth noting that people who are in the same position as Amanda don’t learn from virtuous persons like yourself, they learn from others like themselves who have fallen from grace – and who managed to change their thinking and way of life – note the generally positive comments on this topic.  I imagine it’s the declaration of bankruptcy that rankles with you - but if there wasn’t this system, think about the alternative – we could go back to Debtor’s Prisons and Poorhouses instead!  Would that be more satisfying? 

      • Thoroughly infuriated, Guest

         

        Fern:  Are you at all
        aware of the current economic situation? 
        Do you understand that it is exactly this type of irresponsible behavior
        that has put us in this situation?  I
        certainly will not thank this woman or anyone else who willingly chooses to spend
        money they don’t have and then pass that debt onto the rest of us simply
        because it is too inconvenient to pay it off. 
         I assume you also believe that it’s
        okay to walk away from your mortgage because you no longer want to be burdened
        with that responsibility.  Same (stupid) logic.

         

        For the record, I don’t actually have a problem with the
        declaration of bankruptcy.  I believe the
        intent of the system is to help those who are actually unable to repay their
        debt due to legitimate hardship.  I have
        a problem with Amanda and the many others that are clearly able to repay their
        debt.  She was living rent-free and
        working.  She chose not to repay those
        loans.  It is as simple as that (perhaps
        you should re-read the article).  I would
        be fine with a debtor’s prison for those that disregard the welfare of the economy
        at large so that they can continue to purchase shoes they don’t need.  You should be jailed for being that careless
        and moronic.  Honestly, that WOULD be
        more satisfying.

        She wrote the essay herself.  So, I don’t see how you can be so
        offended by me pointing to facts she clearly included on her own free will.  I can only guess there is some type of
        personal connection for you.  That’s too
        bad.  But, I won’t be shamed by you for
        living responsibly.  Also, I won’t accept
        that “ridiculously easy access to credit” is to blame.  Grow up and take some REAL responsibility for
        you actions. 

  • Merewyn Stainforth

    I’d like to point out that many people are currently finding themselves in bankruptcy not from youthful ‘misunderstandings’ about money but from the fact that to get even a basic standard of living post education, middle classes have become strapped. I say middle but this doesn’t mean a fancy house, luxury cars and holidays…

    What I mean is the educated poor. Those without the means to cover housing etc at a decent level on the low paid jobs that are available to the poor when there is no ‘daddy’ or ‘old boys network’ to help bail you out. Many people have good jobs because of good background and where they were educated which most often leads the most important financial security in the world – who you know. Post 2008 a great swathe of the ‘educated poor’ euphemistically called the middle classes have been caught in the downturn. Many as far as I can see are the first generation to jump up the social mobility ladder. Moving from laboring working class to being degree and ‘career’ orientated. They were given aspiration and tried to achieve it, financial institutions saw their incomes as fair game despite the risk to the consumer, given that any bad debt is tax deductable and buying it makes yet more money for some brokers.

    But with the financial crisis of 2008 it seems this first generation of upward mobility has now been shattered. In fact many highly educated people are homeless. Long standing wealth accumulation, which means generation on generation of accumulation seems to be able to withstand some pressures. But the social experiment to educate the masses has failed because it has driven increasing numbers from this generation (80′s – to now) into financial destitution.

    There are many who are irresponsible and spend thrift, but many others will find themselves going bankrupt whilst driving a second hand car, wearing second hand clothes and being unable to put food on the table.

  • D2W

    Great article, I did much the same, including the bankruptcy.  I agree with most of what you’ve written, except of course, in my book, 30 pairs + of shoes is a necessity.  Lol.

    • Vinona

      .. are you like an octopus or something? Most humans have two feet to put shoes on. I’ve seen someone put a shoe on other body parts, but thirty pairs! I’m very impressed.

      • Amanda Chatel

        Most of my friends own more shoes than me! Granted, the shoes I bought then I no longer have (as it is several years later), but these days, honestly, I have more. But I can also afford then now and don’t need to charge anymore.

  • http://pulse.yahoo.com/_MFMTWW3CFGJT2LSS3WSWUMLPLA Jazzye

    I’m glad you learned young , instead of being 43 and flat busted broke , with a college degree , barely no money in your retirement funds  because you haven’t leaned the real value of money.

  • Eglos1986

    I had to file at 22. My ex helped me pile up credit card up, because he never had a job and I didnt make much. His dental work was put on credit in my name and I got a couple credit cards in my name for my mother. Needless to say, neither felt that they had to pay for them. I unfortunately made the mistake of getting new cards to fix my credit and my current boyfriend and I racked them up. We have quit using and are paying as much as we can on them to get them down. I learned the lesson twice. I never had my parents bail me out because they could not bail themselves out. And at 16 I was working, but paying the bills at my moms and buying things I needed. I will never put my name on something for anyone again and I vow to not get anymore cards and rack them up. This story pointed out how easy it is to make stupid financial decisions. I think everyone needs to think about it.

  • Vinona

    Great article. My favorite part:

    “I did learn that when it comes to money I am, for lack of a better word, an idiot. I have yet to discern the meaning between need and want.”

    Why can’t everyone just admit it?

    I’m thinking of my friends (a married couple) who filed bankruptcy last year, also in their mid-twenties. When I heard the number they owed it wasn’t immediately clear just *how* they screwed themselves this badly, but when put this way – “a little here, a little there, pizza instead of meal plan at the dining hall, extra clothes, extra shoes, etc.”, after interest rates apply and no action is taken it starts to add up.

    The worst thing was: when they already knew they were going to file for bankruptcy, they were still going out spending money they didn’t have on things that weren’t a necessity. Like, $1500 dining room table. Or a fondue maker. And then just rolled all of those splurges into bankruptcy numbers. While doing so, they also kept chanting their mantra: “we’re just a young couple doing the best we can!”.

    It’s infuriating.

  • Leah

    Really confused, let down and irritated that this made the cut as a LearnVest article.

    Seriously.

    It’s fine to show “be stupid with credit cards and you might end up bankrupt…” but what else is this teaching? In the end you should just accept that you don’t want to learn about personal finances and self-deprecatingly call yourself an “idiot”?

    LearnVest, do you see how TERRIBLY this perpetuates stereotypes about women not being able to manage money?

    And that her only credit card is to a luxury goods store??? With possibly the highest interest rates and fewest rewards of any card out there? WTF?

    Would you ever tell your friends or daughter that this is acceptable money management?

    This woman is not a good role model, LearnVest! She made crappy decisions when she was young and is still woefully unaware of (and not motivated to learn) how to manage her money now!

    • Vinona

      “The human capacity to ignore inconvenient facts and avoid
      unpleasantness is immense.” (c) John Walker

      This article is honest. What I appreciated the most is the author didn’t sweeten the pill. Most money management, weight loss and other self improvement tasks require coming to terms with inconvenient realities of the task at hand. That’s why we need articles like this one.

      • Leah

        The inconvenient reality is that this woman was a selfish, indulgent, irresponsible twenty-something who decided that it was too inconvenient to learn how to balance a  checkbook. 

        That’s the bitter pill, Vinona.

        • Vinona

           And I completely agree with you.
          I didn’t want to be too harsh on the author – she did after all face her financial weakness. I still have a thousand questions about why she didn’t pay it off and how did the judge just let her run free for no good reason? She didn’t have children or mortgage or any serious obligations. Why didn’t they come up with a payment plan of some sort? Speaking of which – are student loans forgiven with bankruptcy now? Anyway..

          At least she deserves an ‘atagirl’ for seeing where she went wrong. Not too many people say it out loud. She did.
          Plus, as far as we know – she is staying out of debt, which not too many people can say about themselves.

  • anthonysmom

    Another disappointing article.  I’m not impressed by someone who chose to file bankruptcy at age 23, for $25K in credit card debt.  I’m have little doubt if you had instead become determine to get yourself out of that mess, you could have buckled down, lived on a budget sacrificing things like new shoes & pizza, and paid it off in probably less than 18 months.  Instead, you show how easy it is to not take responsibility for the debt and to walk away.

    And yes, I DO in fact know how hard it is to pay down a large amount of debt.  My husband and I paid off literally FIVE times that much in 4 years.  We are not “rich” nor did we have parents to bail us out – we both work (plus I had a side business for several years), we have 3 kids combined, a house payment and  are required to pay $700/month child support. How did we do it?  We budgeted every single penny that came into our household. We went without extras.  We had basic cable.  We didn’t go out very often.  We didn’t take vacations.  We paid off debt.  Period.  Our incomes were around $85K/annually when we started and now we’re making almost $130k – yep, we got raises in a recession – imagine that!  My DH also lost his job twice during that 4 year period and managed to land jobs with higher pay & better benefits both times after being out of work less then 2 weeks - imagine that!

    The best thing you can do for yourself, Amanda, is learn to budget your money, don’t just accept that you don’t know anything about personal finance.  We didn’t either, but we decided we didn’t want to live like that anymore!  Do you have any idea how incredible it is to put money into OUR savings account and OUR retirement accounts instead of sending it off to some creditor or bank????  It’s AWESOME!!!  I’d seriously recommend that you and everyone else commenting here that’s in the same boat to look in to taking Financial Peace University, it’s a 9 week class created by Dave Ramsey.  At a minimum, look up Dave Ramsey – he’s on radio stations across the country, has written countless NY Time bestsellers and is a great speaker.  We started with Dave & what he teaches (God’s & Grandma’s wisdom – live on less than you make) and it’s what got us on track and to be debt-free.  We’ve been teaching his FPU class now for 3 years so we can help other people find their own financial freedom. 

    • Vinona

       Yeah, I decided not to ask why she didn’t pay it off, after all *someone* had to pick up the bill. *hint-hint*.

      While some individuals buckle down (like you) and assume responsibility for their actions, others just push it off the plate and get on with their lives swearing that from now on it will all be different.

      I loved the part where you said that living smaller is not the end of the world and gave examples, with numbers. It’s very true – living smaller is not that hard! But for most people it requires immense inhumane effort and who needs that when there’s always someone to bail you out?

      What they don’t want to admit is – debt doesn’t just disappear, someone has to put the money back in the bank. Someone has to pay for your budgeting aversion.

      • anthonysmom

        “Debt just doesn’t disappear, someone has to put the money back in the bank. Someone has to pay for your budgeting aversion.”
        EXACTLY!!!  And one of the forms that comes in now are all those lovely fees that banks are adding to checking/savings accounts.

  • kansasgal

    This woman is a terrible role model and it’s sad to see such a disappointing article here. What are we supposed to learn from her? That irresponsible people should simply be forgiven of debts without paying for them, and continue being irresponsible and foolish with money? And that this is a good solution? How about some personal responsibility?

    Bankruptcy is intended for people experiencing *true* hardships. Unexpected medical bills, at risk of losing their home, the single  parent who cannot catch a break anyway. It seems like she used the system to avoid paying for all the junk she bought. Embarrassing.I know women struggling to pay medical bills, college loans, credit card bills and child care costs, who haven’t taken this way out. And in my opinion, they’re far more deserving of a break provided by bankruptcy than the woman in this article. Real hardship-that’s what bankruptcy is intended for.

    Show me a bankruptcy story about a woman who *really* needed it for herself and her family, and I’ll be fully supportive. Not some silly article about a selfish and frankly stupid girl who hasn’t learned the difference between a “need” and a “want.” At 33 years old and after going through bankruptcy, it’s embarrassing that she is still unable to discern the difference.

  • shannon4peace

    ok, good job Amanda in having this 10-years behind you.  But I notice in the last paragraph, saving is still at the bottom of your priorities, “ I make sure bills are tackled first, groceries second, savings third and only then will I indulge in things I want but don’t technically need.”  
    I am still learning, but if I can give you any advice I’d say, pay yourself FIRST, meaning, ALWAYS put at least 5% of your paycheck in savings before anything else.

    good luck!

  • CarrieSloan

    Hi all, 
    I wanted to thank you all for commenting and discussing this story. I also want to clarify one thing: Many of you have asked … why is Amanda a role model?

    I think she’d be the first to tell you that she’s not. As you know, LearnVest publishes a lot of essays about different women’s experiences with money, and they’re always that: One woman’s personal experience, and not what we (or she) would advocate you do. 

    LearnVest does not advocate bankruptcy as a way out. We published the story as a cautionary tale of what can happen if you let credit card spending get out of hand, because there are many young women who have wound up in the same boat as Amanda, and we don’t want that to happen to you.

    • Kate

      I think that it might be helpful to all of us who either agree or disagree with Amanda’s take on how to handle her money issues by sharing some good information on the consequences of declaring bankruptcy. I know that it’s not a walk in the park, but I have to admit that Amanda’s story made declaring bankruptcy just a little to simple. Are there any good articles on LearnVest about the consequences of declaring bankruptcy?

    • Kcpompa

      I am happy you published the experience Amanda had with credit cards and mounting debt.  As a mother, it provides a lesson to be learned for my own daughter, who is in college and loves to shop.  I use your information to teach her valuable lessons about money.  Thank you.

  • Tina Majkowski

    I don’t think there is any shame in claiming bankruptcy! It does not point to a moral flaw or laziness in paying off one’s debts. Rather, it illustrates how it is entirely too easy to get a credit card (college kids are constantly woo’d into applying) even without the appropriate amount of income (credit card companies can totally tell that a college freshman is not making a ton of money!…and they don’t care).

    Secondly, Amanda’s options were to live under the rock of high interest debt FOR YEARS….or be proactive and work to resolve the problem. Kudos for her!It takes courage to do what she did. And, the whole buckle down mantra is simply part of the protestant capitalist work ethic which favors the rich. AIG bailouts, anyone?

    • Vinona

       ” capitalist work ethic which favors the rich” — Please. Don’t.

      • Tina Majkowski

        As a PhD student (with no credit cards btw) that favors a Marxist mindset, I know what I am saying regarding the protestant work ethic favoring the rich. Did you see anyone at Goldman Sachs “bucking down….pulling up their bootstraps” and taking care of the problem they created (which has ruined our economy along the way…). Nope, the government bailed them out and for a lot more than 25k.

        Also, I wouldn’t call any degree “useless.” Sure, this generation is the most overeducated and underpaid but that has a lot to do with the amount we were encouraged to take out in student loans. Oh, and the economy is in the crapper thanks to Wall Street.

        We all learn from our financial mistakes. Amanda learned from hers. I don’t understand all of the bitterness in these comments. It’s not like she stole your birthday.

        • Vinona

           ”It’s not like she stole your birthday.” – I beg you pardon, that’s why we had 2008. People borrowed the money they couldn’t pay back and bought homes they couldn’t afford. The System you and your Marxist buds like to spit at was designed to hold the weight from only so many broken promises. And then all hell broke loose when suddenly too many folks decided they’d rather not pay anymore.

          By “useless” I’m sure you understand what I meant. In case I need to clarify: a degree that costs a pretty penny without guaranteed return. You may go into demagogy and argue that being overeducated is somehow useful in the society, but I view it irrelevant to the subject and will pass. In any case, when you sign your name taking out student loans, you must assume responsibility for paying them back. Useful or not useful. It’s called being an adult. Anywhere in the books that feed your Marxist mindset they talk about cause and effect?

          • Tina Majkowski

            Wow. You are certainly heated. This is only a discussion. Question: what does ” “It’s not like she stole your birthday.” – I beg you pardon, that’s why we had 2008″ mean? And, an education is ALWAYS worth it. It gives you a chance to learn about the world, people, cultures and become an adult, which is why I never had a credit card in college or graduate school or, likely, ever. These companies are preying on 18 year olds. I remember 18, I didn’t always make the best decisions.

            As far as student loans, I was told that if I worked in the public sector as in a public school teacher or in the public legal system that my debt would be resolved in 10 years. When I applied to my PhD program, I was told that most universities woo you by paying your student loans as part of you hiring package. Neither are true. Had I know this…I would have become a clinical psychologist. But, live and learn.

            And, yes, Marxism is very clear on cause and effect as is relates to money….maybe not in the way you would like it to, but it certainly does.

            I really hope you have a relaxing evening!

          • Guest

             You do not need to rack up significant student loans to become educated.  There seems to be a common theme in your defense… it’s everyone else’s fault that you made bad life decisions and as a result other people should have to pay for your mistakes.

          • ksgirl73

            I think there is some type of repayment forgiveness or other plan for public school teachers.  Try contacting your state education agency.  I think it only pays a partial, but it’s better than nothing.  Of course, it may also be a state thing because I know we have something like that here.  I don’t think it’s publicized well.  

        • Not Quite…

          “Nope, the government bailed them out and for a lot more than 25k.”That is not Capitalism, that is Big Government. 

    • Vinona

       Of course you don’t think there is a shame in bankruptcy! Nothing wrong in letting others pick up the slack. Someone can always cut you a break. Let’s all live a fairytale and let The Rich pay!

      You said one decent thing – about being proactive, except Being Proactive does not mean taking advantage of the system that was designed to lend a hand to a person in need. Being Proactive means liquidating the debt. Taking care of oneself.

      That’s what I liked about Amanda – she admitted her spending habits, lack of money ethics and a pretty much useless and expensive college degree were the problem – not The System. Too many college grads want someone else to pay for their career choices. Who knew there isn’t much work in the world for PhDs in Mesopotamian Staring Frog migration!

    • Sheila

       I agree, credit card companies make it too easy for you.  I remember getting offered a JCPenney credit card my freshman year of college.  Although I didn’t get out of hand with it I did learn that an 18 year old with no job shouldn’t be offered a credit card.  I eventually closed it out, but I really believe more of the blame needs to be placed on the credit card companies.

    • anthonysmom

      My husband & I and our 3 children ”lived under the rock of high interest debt FOR YEARS’ and somehow managed to pay it all off without settling any debts or filing bankruptcy.  I’m very proud that we chose the “whole buckle down mantra” as part of the “protestant capitalist work ethic” over not taking responsibility for the debt we voluntarily went into.  WHY is it somehow a bad thing to buckle down and actually PAY WHAT ONE OWES by living on less than one makes????  No one bailed us out. 

    • Heather

      But she didn’t work to solve the problem, she ran away from it. Many people rack up 5-figure credit card debt and “buckle down” to pay it off- myself included. It’s called sucking it up and being an adult. And yes, it’s way too easy to get a credit card… but that doesn’t mean people aren’t still responsible for their own actions. Filing bankruptcy is a necessary evil for many, sure, but not this girl. She could have paid it off, but she chose the easy way out.

      And this essay mentions very little fallout from her bankruptcy, which is pretty unbelievable. Really poor (and disappointing!) choice, Learnvest.

  • http://profile.yahoo.com/YKKVRLOX3JPLQ7E4WXTR7PJ2LA Melissa

    Bankruptcy is just not fair.  It makes me angry that people can spend to their hearts content and just clean the slate when they’ve maxed everything out.  Where’s the responsibility or lesson in that?  I don’t even understand why this is an option for people.

    • Eseerailehs

      I understand your frustration with bankruptcy. However, not all individuals were as irresponsible as Amanda. Unfortunately, my ex-husband racked up over six figures in debt and there was nothing I could do about it. We were separated at the time and I had left the state. However, we were still married at the time. Once I found out about the debt I tried for many years to pay it off little by little, but ended up losing my job and could no longer afford to pay my bills. Yes, I went after my ex, but was unable to find him. He had left the state. There was nothing I could do. I worked all kinds of odd jobs to pay the debt, but just could not keep up and finally decided to file for bankruptcy and only after seven years of trying to clear the debts.
      For those that are purposely irresponsible the law should not apply, but what about the people who lost their jobs and used all their life’s savings and 401k’s to survive. Hundreds of thousands of people had to file bankruptcy to stay afloat. Though I agree it should not be for the purposely irresponsible, those who are strained with debt through servere loss as it pertains to loss of spouse, income, job, or other means of financial stability the law should definitely apply.

    • Kaylacammack

       Yes, bankruptcy can hurt creditors who may have earned the income, but bankruptcy still comes with consequences. It is permanent in public records, and stays on your credit report along with all the debt included on it for 7-10 years. Employers and insurance companies are looking at credit for jobs, not to mention any loans if you can get them have extremely high interest rates. Now, for some people who get overwhelmed with debt, whether it be from being irresponsible or if they suffered a job loss or major medical issue, creditors take advantage of that. They charge excessive fees making it almost impossible for the debtor to pay it back. Bankruptcy offers protection for those people. It’s easier to say it’s not fair when you’re not on the other end of the deal, but I understand how people could get frustrated with the people who are being irresponsible and resort to bankruptcy as an option.

    • Heather

      This essay is incredibly irresponsible because it DOESN’T point out the downside in filing for bankruptcy. I wish the points made in the comments below had been mentioned in the actual article.

  • Tina Majkowski

    Does anyone know if student loans are included in bankruptcy absolvement?

    • Sheila

       Private ones possibly, but government ones no. I’d ask an attorney if you have questions.  Many offer free consultations.

      • Tina Majkowski

        Thanks, Sheila!

        • Guest

           Or… you know… pay for the education you received rather than expecting everyone else to pay for your choices.

        • Kckula16

          Federal Student loans are just put on hold durring bankrupcy, you will still have to pay them off after the bankrupcy is complete.  

  • BW2011

    This angers me. I graduated with $22,000 in credit card debt, and didn’t have mommy and daddy to live with to cushion my living expenses. I entered a debt management program and saw the true ramifications of my overspending. I will be out of credit card debt in a few short months, and I can proudly say I did it myself. I have nothing against bankruptcy when it is needed. My parents filed for bankruptcy when my father’s employer of 23 years went under. A family of four can’t take a 75% pay cut. A 22 yr old with no living expenses can.

    • anthonysmom

      Good for you for being taking responsibility and paying off your debt!!  It can be done if one is willing to sacrifice as you have!  Way to go!!

    • Michelle

      Awesome BW!  YOU should be writing an article! :)

  • Sheila

    Recently I made the decision that filing for bankruptcy would be my best option.  It’s not a decision I’m proud of, but I’m looking forward to the relief that it will bring.  In my case, I became unemployed twice within a 4 year period.  The first time I was out of work for 9 months.  I had no choice, but to rely on my credit cards to survive.  It’s not as if I was buying anything outlandish.  Most of my credit card transactions were at the gas station, groceries, or personal items at Target.  I’ve spent the last 6 year trying to pay it off and I’ve finally come to the realization that bankruptcy is the best option.  I’m looking forward to having extra cash at the end of the month to put in savings and contribute more to my IRA.  In 2 years I’m hoping to buy a house.

    I do have to clarify a few things I read in this article.  It’s not impossible to get a credit card after filing bankruptcy.  Although many people who realize that’s what got them in trouble in the first place swear them off, you can actually get one.  In many cases the day after you file.  It’s about controlling your use of it.  It’s still an excellent way to build credit and if you are responsible you can learn to live with them. 

    A large part of the problem is the credit card companies who continue to offer credit cards to people who are either not responsible to handle them or are already in debt.  Credit card companies are cleaning up in the interest and still offering cards to people that they know will never get ahead in the payments.

    Most student loans are not dischargeable.  It’s usually the private ones that are.

    Buying large luxury items on your credit cards right before you file can be considered fraud.  However, most attorneys will tell you to liquidate your assets right before you file so if you have extra cash around and need a dining room table, then you should buy it.  Although I’m not sure I’d spend $1500 on one. 

    • Guest

       If you recently filed for bankruptcy, you probably don’t (and shouldn’t) qualify for a mortgage.  I don’t understand how you can say it’s the credit company’s fault for extending credit to unworthy customers and then think that offering a mortgage to someone with a bad credit history is okay.  Hope you’ve got enough cash for the house!

      • Sheila

        I haven’t filed yet.  You aren’t eligible for an FHA mortgage until 2 years from your discharge date.  I’m sure there are other lenders willing to finance you at a hefty interest rate.  If you’d read what I wrote you would have seen that I said I’d like to buy a house “in 2 years.”

        I believe as someone else here pointed out, it’s the credit card companies that know the risk they are taking when they grant someone a credit card that already has others maxed out or has more credit than they should.  A person shouldn’t have credit of $60,000 when they only make $20,000.  There’s a point where (and I’m quoting another poster here) that the 3rd and 4th credit card companies should have been responsible enough to say this person already has too much credit.  I’m sure they knew going in that there’s always the risk that someone will default on their agreements.  Mortgage companies are constantly doing this, but no one thinks about the credit card companies doing this as well.

        • LeAnne

          How is it the credit card company’s fault when someone fraudulently represents their income on an application as the OP did?

          • ksgirl73

             I wasn’t referring to this particular person, just in general the credit card companies should take more responsibility of who they give credit to.

  • pscilla

    I’m really glad to see someone sharing an experience with bankruptcy so openly and honestly. I think it’s important to acknowledge irresponsible or bad habits, and not to pretend everything just gets better. I knew a lot of people in college who got swept up in credit card offers and ended up buried in debt by graduation. However, I hope that more stories of bankruptcy are forthcoming, because the irresponsible teenager turned irresponsible young adult is far from the only, or even most common, tale of debt and bankruptcy. I am so glad to see Learnvest opening this discussion of bankruptcy, and I am looking forward to reading different perspectives on the issue. I think the real value here is what happens after. Using Amanda’s story as a cautionary tale may help some readers avoid falling into Amanda’s habits, but it doesn’t do much for readers who are already struggling with these habits or who have declared bankruptcy and are trying to (or succeeding with!) build up credit, form new habits and patterns, etc. After all, aren’t cautionary tales kind of notorious for their ineffectiveness? I think this is an important topic to bring up, but a story does not have to advocate bankruptcy as a way out for it to be an educational and positive post.

  • http://profile.yahoo.com/5BN5CTUADF6XSCNZWONHSPD2GY yahoo-5BN5CTUADF6XSCNZWONHSPD2GY

    Is this the new American economy?  Make dumb decisions then write about your dumb decisions.  

    • Tina Majkowski

      the new american economy is that many people can’t afford to live off of the salaries they make at their first few job. so, you put things on a credit card. best put by my best friend a social worker: “i have bad credit because i have never made over 25k and live in nyc.” he has doubled that salary in the last TEN years and is repairing his credit. but, his parents helped by paying back all of his student loans.

      sometimes, there are few options at your disposal and you pray that time will grant you a better job, or something!….

      there really is no need to hate on the writer though. i am interested, why is there so much resentment in these comments?

      • Sheila

        I was wondering the same thing, why so much resentment?  I thought this article was a good learning experience for us all.

        • Guest

           What did you learn from this?  How to cheat the system? 

          • Sheila

             No.  For starters credit card companies shouldn’t be offering cards to college students.  Maybe campuses shouldn’t be allowing them on campus.  Or if they do, maybe they need to offer something that teaches students how to be responsible with credit cards or other forms of credit.  I don’t know that I would say Amanda cheated the system.  I’m not saying I agree with her decisions, but I wouldn’t got so far to call it that.  I think it’s common for those that don’t understand bankruptcy to point the finger at someone and call it cheating the system.  There was a lot about bankruptcy left out of that article.

          • Guest

            I’m sorry… you lost me there.  So, you think that the University should be held liable for the $25,000 worth of shoes and pizza? That’s absurd.  

            And, as far as I know every high school student takes at least one basic economics course.  If you graduated from high school, you should know better.

          • Sheila

             No, but I think if the campuses are going to let the credit card companies solicit on their campus then they should teach students how to be responsible.

            We had a consumer affairs class at my high school, but it didn’t touch on credit or debt at all.  Or responsible spending or budgeting.

          • Guest

            Well, I received my first credit card application (and dozens more) in the mail.   Should the postal service also be held responsible for educating? 

            I’m still having trouble understanding what you learn from this article?

          • Guest

             I received my first credit card in college.  I didn’t charge more than I could afford to pay off every month.  The education behind credit card debt is simple: Don’t spend more than you make. If someone needs further education to grasp that concept, perhaps they’re  qualified for higher education.

      • anthonysmom

        I’m not hateful or resentful of the writer.  I just disagree with people living above their means and then walking away from the debt they voluntarily created and say “it’s not my fault…”  Instead of complaining about a low salary, how about one goes out and seeks a better paying job or, gasp, gets a 2nd job (like I did) to get out of debt and increase one’s income.  Or move to an area with a less expensive cost of living.  There are lots of things people can do – many just are not willing to make sacrifices.

        • Tina Majkowski

          Congrats! on your can-do attitude. I am beginning to think this is just a platform for hating on someone who realized there were options (as explained to her by someone in FINANCE) other than moving to NH, and throwing away years of her life because of high CC interest. She wasn’t going to just pay pay 25k. Trust me that interest would have almost tripled that number.

          The problem is our economic system. And, that cc companies are even allowed to give cards to college students who they KNOW have no or little income.

          Why should any of us sacrifice because of a screwball system? So, congrats on bucking down and paying off your debt. It’s admirable. But, why hate on people for choosing another way out? You didn’t pay for the authors’ bills. Banks make so much in interest (and shady dealings) that they didn’t even feel the dent.

          And, I say this as a person with multiple jobs because I love financial security.

        • Tina Majkowski

          Congrats! on your can-do attitude. I am beginning to think this is just a platform for hating on someone who realized there were options (as explained to her by someone in FINANCE) other than moving to NH, and throwing away years of her life because of high CC interest. She wasn’t going to just pay pay 25k. Trust me that interest would have almost tripled that number.

          The problem is our economic system. And, that cc companies are even allowed to give cards to college students who they KNOW have no or little income.

          Why should any of us sacrifice because of a screwball system? So, congrats on bucking down and paying off your debt. It’s admirable. But, why hate on people for choosing another way out? You didn’t pay for the authors’ bills. Banks make so much in interest (and shady dealings) that they didn’t even feel the dent.

          And, I say this as a person with multiple jobs because I love financial security.

      • Michelle

        If you can’t afford to live within your means in NYC then I guess you should move elsewhere.  If the writer chose to buy shoes rather than to follow her dreams as a writer than that was her choice.  She complained about not being able to be a writer in NH…well, too bad…should have thought of that while stealing from others.

      • Guest

        That’s garbage.  There are options.  I understand they may seem inconvenience but, they exist.  Don’t pretend to be so helpless. 

      • LeAnne

         If you can’t afford to live off of the salary from your first job after college, you couldn’t afford the degree.

  • http://www.facebook.com/heyitsadam Adam Locascio

    Amanda…. this is a great article. You shouldn’t be surprised that you got a CC after a bankruptcy. The lenders LOVE you. You have a court-decided reputation as someone who likes to pay for things over time with a minimum payment and you would feel PRIVILEGED to have a card with high rate. 

    I’m glad you’re back on your feet… and a little wiser. Nothing wrong with falling down as long as you don’t fall down twice the same way ;)

  • Haywoodjablomey

    Congratulations on snapping your fingers and making YOUR responsibility the American taxpayer’s problem.  You should have been made to pay off every cent yourself, and sell the fancy things you bought yourself.  WE pay for people like you through charge-offs, higher fees, legislation that is anti consumer–all because you like to spend money you don’t have. 

    • John

      To be fair, banks DO account for a certain amount of charge-offs.  It’s part of the risk they KNOWINGLY take lending to consumers with sub-prime credit scores. No, it’s not fair to the banks to not get their money back, yes, the author was young and irresponsible with money…but what were the 3rd and 4th credit card issuers thinking granting credit so freely?  They were pretty stupid/careless to take on that risk – it wasn’t just the author.  Lenders got careless with their risk/reward assessments – it wasn’t JUST reckless consumers contributing to this problem.

      • Lexi

        The 3rd and 4th credit cards were issued because SHE LIED on her applications. For those of us who have real bills (children with chronic medical conditions, aged parents who need help, unexpected job loss, etc…) the idea of a selfish, capricious teen recklessly buying trifles is a bit revolting.  She has written her story with great honesty and clarity.  I wonder why you are so interested in denying her self-professed culpability?  She truly learned from her mistakes, but John, they were HER mistakes, no one else’s.  Kudos to her parents for having enough common sense to help her, and not simply tell her it was “…the stupid/careless credit card company’s fault.” 

  • John

    I find the sheer depth of vitriol in a lot of these comments amazingly sad.  Everybody was guilty of getting in over their heads in 2002 – banks were lending irresponsibly out of greed, consumers were consuming waaaay too much, and each perpetuated/encouraged the other.  Blaming one political party, business sector or class of people will do NOTHING to solve the underlying problem: lack of financial literacy, which should be taught in schools.  Turn your anger toward advocating that.  Maybe then we’ll see some real change in this country.  Finger pointing is worthless.

    • LeAnne

       I think the key point is personal responsibility.  In this day and age, there are plenty of free resources available to educate people on financial matters that are easily accessible by anyone with an internet connection or a library card.  Although additional education would be convenient, each of us is responsible for our own lives and finances.  If we make bad decisions because we did not educate ourselves properly, then ethically, we should do everything possible to fix the situation. 

      In the original post, she had already received an education from her family and chose to ignore that financial advice.  MOREOVER, she lied about her income in order to deceive the creditors into giving her more free money.  No amount of education stops someone from having unethical behavior.  The choice and responsibility ultimately lies with the person.

    • Heather

      I think most of us understand (and even sympathize with) how the author got in over her head with the credit cards. This site is full of cautionary tales and I think many of us have been in similar situations. The issue I have here is that the articles seems to be advocating bankruptcy as a way out of debt, which I’m not okay with. Bankruptcy should be a last resort, and the author had so many other options. This essay does little to teach about financial literacy and treats the option of bankruptcy with a level of flippancy that I find that really annoying.

  • dander3253

    Were you able to get out of your student loans by filing bankrupcy? I thought they followed you to death. ?

    • Halpin_mmm

      Student Loans cannot be included in a bankruptcy.  Those do follow you to death although I thought I read someplace that if you have the loans for 20 plus years you can have them void and you do not have to pay the rest of the loan.  I might be wrong in this but worth looking into.  I never had any school loans to have to pay…………………..

  • Halpin_mmm

    I suppose everyone makes mistakes right now I am about 4`-5,000 in debt and having a fit about getting rid of it I would really be stressing if it was 25,000.  I need to buckle down make cuts and get rid of this credit card once and for all.  My parents do not own a credit card unfortunately they can never rent a car either!  BUT my dad probably still has the first dollar he ever earned !!

  • Mel

    I appreciate Amanda’s honesty regarding her financial mistakes and I can definitely relate. By the time I was 29, I had accumulated $17,000 of debt – most of which was credit card debt from irresponsible, childish spending on things I didn’t need. However, I don’t believe bankruptcy should have been her first choice to get out of debt. In fact, I don’t think bankruptcy was necessary or should have been a choice for her at all. Earlier this year, I myself became debt-free. I paid off that $17,000 of debt in 10 months from working several extra part-time jobs on top of my regular job – babysitting, delivering pizzas, delivering newspapers, pet sitting, house sitting. And it wasn’t easy. For ten months I sacrificed my social life, eating out, shopping. Might sound crazy, but it was actually the best and hardest 10 months of my life. I chose to be an adult and pay off the debt I gave my word to pay. I believe any of us can make this choice before we choose bankruptcy, and we can walk away from our debt with a sense of self-respect and dignity. I hear stories all the time on “The Dave Ramsey Show” of families who pay off much more debt than Amanda had without filing for bankruptcy through good old-fashioned hard work and sacrifice. Amanda may have gained some new perspective and the courage to admit her mistakes, but what kind of lessons did she really learn from filing bankruptcy that changed her financial behaviors for the better? Especially if she admits that it would be a bit of a lie to say that she learned a lesson about money, calls herself an idiot when it comes to money, and has yet to discern the difference between a need and a want – even 10 years after bankruptcy? Again, I do appreciate her honesty and her story inspires me to handle my money better than she did/does, but she’s not someone I would take a cue from financially (especially regarding bankruptcy).

    • Sheila

       I think a lot of it depends on how much debt you have vs. your income.  I know I could never pay off $17,000 in debt based on what I make.  Every situation is different and I’m not defending Amanda by any means, but I think one of the things that gets overlooked is the debt vs. income ratio.

      • Mel

        Sheila, I agree that the debt vs. income ratio can be overlooked, but I also think it’s not impossible to overcome. At the time I was $17,000 in debt, my yearly income was less than what I owed. I probably would have qualified for bankruptcy. Taking on the extra jobs, selling possessions and sticking to a very trim budget was what helped me tackle my debt. It was extremely hard, but not impossible. I believe anyone can do it IF the want to.

        • Sheila

           Assuming you have things of value to sell.  I know I don’t.  Even a part time job wouldn’t rid me of $17,000.  If you’ve already trimmed your budget as much as you can and still don’t have the extra money to pay off your debt then it would be difficult.  I just think every situation is different and what works for one person doesn’t always work for another.  It’s kind of like weight loss.  LOL

          • Kckula16

            Agreed, as it stands over half my paycheck goes to child care. Taking on extra jobs for me would mean paying even more child care. Sometimes there isn’t a way to earn or sell enough money.

          • Sheila

            I’m not a parent, but you also have to consider the time you are spending away from your children.  Sometimes you just can’t put a price on something like that, even if it means you have to struggle with finances.

  • Joe

    Great article!  I also had the same experience at the same age, and the lessons learned are strikingly similar.  It is better to have learned that mistake at a young age than later in life.

  • Anygirl2012

    How about stop bashing the writer for sharing her experience???  We all did stupid things at kids, but she appears to have learned from it.  End. Of. Story.

    This isn’t a political thing.  She didn’t tank the economy singlehandedly.  She ignored her parents warnings, lived out of her means and did what MILLIONS of kids do each year. 

  • http://twitter.com/kiffyworld Kiffany Jones

    I’m proud of you for sharing your story. People (our parents included) forget that no one is born magically knowing how to manage their money. It’s not taught in schools, so it is a skill that we must learn somewhere. Simply knowing not to get a credit card just won’t cut it because that has nothing to do with our underlying money management habits. When you have a moment, look up T. Harv Eker’s jar money management system. Since using it, I’ve gotten into the habit of allocating money for every area of my  life, education, savings, monthly bills, as well as money that I can blow (on shoes) every month if I want. Every dollar has an assignment now, whereas beforehand I felt little security about my finances. 

  • Anne

    I know this is 

  • Anne

    I know I’m coming across this late but hopefully you still see this comment! I was just wondering if filing for bankruptcy had any major negative effects? I got married a year ago and unfortunately both my husband and I were irresponsible with money and are now drowning in debt. A family member just recently looked at the numbers of our situation and said that they see bankruptcy as the only way out. This completely frightens us. We are hoping to move to a different apartment in the near future but I know that most places require credit/background check, meaning that the bankruptcy will show up to them. Did filing for bankruptcy effect your  being able to rent?

    • Anonymous

       You could always move before you file.  The bigger apartment complexes are more likely to deny you credit.  Everyone is different, but if you have a good rental history then you may be okay.  Of course, you’ll also have to wait about 2 years to buy a home if you are considering that too.

  • Rebecca Rosenberg

    She was able to rent again by falsifying her credit report. She rented from my husband and we discovered later that she falsified her credit. She doesn’t pay any of her bills. And before she moved out of my husband’s apartment, she didn’t pay her rent, stole $3,000 from her roommate and trashed the place. This is not a woman whose example you should follow.

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    Many of us difficult in filing for bankruptcy because it can be hassle as well.

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    Hi Amanda, You Posted such a good Idea, But for me also I think you to do stop buying unneeded stuff. the truth is it’s hard to resist the spending urge once you’ve developed a habit. Instead, the next time you go to spend that extra , think about how much value that object really adds to your everyday life, and if it’s not crucial – save the purchase for when you’re financially ahead.

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    If you get to a point where bankruptcy is your only option, take it, but make sure you never get to that point again.

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