| The concept of filing bankruptcy has changed | | | | cards as mentioned above and moves into greater |
| significantly in face value over the past couple years. | | | | things like installment loans, say for a car for example. |
| Ten years ago, one would have looked at bankruptcy | | | | Why is it that an 18 year old student with no full time |
| as the worst possible thing anyone could ever do to | | | | job and an income of maybe $18k a year can buy a |
| themselves. It meant losing everything, and never | | | | $20k car if they like? All they need is a signature |
| recovering. Then, a couple years ago, people started | | | | worst case, regardless of the obvious cold hard |
| using bankruptcy as an easy way out of debt. | | | | numbers that say its impossible to afford. After the |
| Sometimes choosing chapter 7 and other times | | | | installment loans its school loans, and not the typical |
| chapter 11 depending on their liquid assets and ability to | | | | Stafford loan that everyone needs and gets. I'm talking |
| repay their debt. So many people started doing this, | | | | about those special loan offers that come to the |
| that the government accepted the new "Bankruptcy | | | | student giving them $10k plus, to spend on whatever |
| Law," that essentially put a stop to "bandwagon | | | | "school related" things they need. So even though I |
| bankruptcy." I call it that because that's what it had | | | | didn't need that $2000 computer, I might as well get it |
| become - well everyone else is doing it to get out of | | | | now that I don't have to pay for it until I'm out of school. |
| debt and they seem to be fine, I guess I'll do it to!The | | | | How about a new wardrobe while we are at it, since I |
| question that needs to be asked though is how did so | | | | need that for the new semester. What those loans |
| many people get in so much debt that this even | | | | don't tell you however, is that even though you don't |
| started happening? Isn't there something governing and | | | | have to pay them off until after graduation, they are |
| controlling how easily people can be given the | | | | still accruing interest all along the way, not uncommonly |
| opportunity to increase their debt? Well sure, there is | | | | at a rate of 10% or more. This also typically applies to |
| our credit score, but even that sometimes has no | | | | any student loan that is not a government loan, and |
| effect on what a person can do. So who's to blame | | | | even then sometimes they incur interest while you are |
| for all our debt, and all the bankruptcy? Is it the | | | | in school (usually at a much lower rate however). So |
| consumer, or the companies that provide the credit in | | | | what happens when you add it all up? Pure disaster. |
| the first place? Of course your immediate answer is | | | | |
| the consumer, as they should have had the self-control | | | | At the age of 21, I had incurred over $80k in debt. |
| to not get into their financial mess in the first place. | | | | Meanwhile, only attending 1 ½ years of school, so |
| Before you agree with that statement however, take | | | | only 1 ½ years worth of school loans, which by |
| a look at the whole picture.A credit card is usually a | | | | the way, kick in as soon as you drop out of school, |
| person's first experience with credit, and the ability to | | | | regardless of your reason (ff course there is |
| acquire debt. Typically as soon as someone turns 18, | | | | forbearance and deferment, but interest is always |
| they are bombarded with offers for credit cards, | | | | involved). So where did it all come from? A little bit of |
| student credit cards, special "gas" credit cards, and | | | | everything, and a bad downward spiral. Once the |
| "first-timer" cards. This is a great thing in the sense that | | | | credit cards got to high to pay, and the car payment |
| one can start building credit early in life, but with that | | | | got to extreme, one can simple apply the formula for |
| comes many dangers that can quickly out weigh the | | | | compound interest to everyone he/she owes because |
| pros if not handled properly. Let's say you were given | | | | that's what is going to happen, and fast. I would love to |
| a piece of plastic and told nothing more than "this card | | | | find a mutual fund, or an investment property that |
| is worth $500 dollars, you can spend it on anything you | | | | grew as fast as my debt did once I slipped the first |
| want, and you don't even have to pay it back right | | | | time on my payments, but it's not going to happen, that |
| away! Just give me $10 a month until you get around | | | | kind of growth only happens if you are in the credit |
| to paying it off. Infact we will even raise that amount to | | | | business.So in the end I was forced into bankruptcy |
| $1000 in a couple months, and heck while we are at it, | | | | even with the new law intact. After credit counseling |
| why not give you $5000 to play with." Well if that's all | | | | and debt management, there was no way of climbing |
| you were told, you would be excited and grateful for | | | | out of my hole. After going through this, I did a little |
| such a generous offer of course! At this point you | | | | research and found I was not alone, and not the idiot I |
| might be saying "C'mon, everyone knows there is | | | | thought I was. There are thousands of young adults |
| interest, and that you need to pay off your balance in | | | | who went through the same thing, and ended up in the |
| full, and if you miss a payment they will default you to | | | | same mess. And so brings me back to my original |
| a 30% interest rate, and if you use your card too | | | | question; who's to blame, the consumer or the credit |
| much and carry a high balance you will get a bad | | | | companies? I believe it is not wholly one of the other. I |
| credit score, and you CAN go over your limit and get | | | | believe it is the consumers fault for not providing |
| charged $30 or more, and there could be a | | | | education to other consumers while still in high school. I |
| membership fee or annual fee....." Now just wait a | | | | also believe it is in part the fault of the credit |
| minute and read that again. Do you really think every | | | | companies and their willingness to get rich off of |
| 18 year old that just got a credit card offer in the mail | | | | others, regardless of their age and the potential |
| knows everything I just listed? Regardless of how | | | | outcomes. There needs to be more regulation, and |
| smart you are, if no one tells you about something, you | | | | there needs to be more education. My goal in this |
| are not going to know, at least not until it's too late. The | | | | article is not to bash the credit companies, or to point |
| worst part is, this is just credit cards I'm talking about, | | | | blame at anyone in particular. Rather, I just wanted to |
| and that's only the tip of the iceberg.So what iceberg | | | | share me story with others, and the things I've learned |
| am I talking about? I'm talking about the one that sank | | | | through trials and tribulation. Hopefully this will help in |
| my financial ship, and the same one that sank so many | | | | some way save others from the mess I've |
| others by the age of 21. In the three years from 18 to | | | | encountered.I've compiled a website to help with all |
| 21 it is possible for someone to acquire so much debt, | | | | Debt related issues. It is a free ad-supported site, so |
| that they are forced into bankruptcy as an only way | | | | feel free to read some of the articles and check out |
| out. So how does it start? It starts with the credit | | | | some of the links I've collected. The address is R. |