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I am a prime example of WHAT NOT TO DO

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Contributor

I am a prime example of WHAT NOT TO DO

Hey guys, 

 

I started off building my credit when I was 18...I got my first credit card through FNBO with a 300 credit limit and over time had a solid credit score and was in outstanding financial shape.  At 20yo I had a networth of about 50k with zero loans. I came to this website in search of the perfect credit score, and I litterally jumped off the deep end.  As you can see by my signature line, I ammased a freaking awesome display of plastic...I had this huge wallet that would hold all of my cards, I would pay with my RITZ card any chance that I had to see the face of the clerk as he felt the weight of the card.  

 

Fast forward a few years.  I'm 27yo with zero active credit cards, with $116,000 in debt (105k credit card debt), a credit score in the 500s (if I'm lucky). I make 96k a year, and I'm dead broke.

 

Credit is serious business--I thought I understood that a few years ago, but head knowledge is only 20%...habbit is the 80% that matters.  I have nothing against anyone who has or uses credit cards...I have nothing against anyone who uses this site (obviously, because I use it)...I'm just saying "be carefull".

 

I'm filing chapter 13 bankruptcy this week.  I will be paying $2100 a month for five years in order to pay off my debts (becuase of my income, I do not qualify for a chapter 7 discharge).

 

Stay classy, and be real.  I was irresponsible--now I'm making up for it on the ramsey plan.  No more loans. No more FICO score.  Hopefully forever.

 

Feel free to follow me in the bankruptcy section from now on Smiley Wink


My Wallet: AMEX Platinum | Citi AAdvantage Exec $20k | Chase Marriott Rewards Premier $12k | United MileagePlus Club 8k | FNBO $25k | Chase Military Officers Club $9k | Discover IT $5.5k | BankAmericard $30k | PENFED Platinum Cash Rewards $10.5k | Barclay Rewards $6.15k | USAA AMEX $15k | USAA MC $16k | NFCU Flagship Rewards $25k | Logix $15k | Chase Ink Cash $12k | Paypal MC $5k | Walmart Discover $5.4k | Chase Freedom $2k | Sallie Mae $2k | Target RedCard $300 | JP Morgan Ritz-Carlton Rewards $5k | BoA Alaska $1k

Message 1 of 35
34 REPLIES 34
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Super Contributor

Re: I am a prime example of WHAT NOT TO DO

Thanks for being honest and in that you may help someone 

Good luck keep your head up and start your build 

 

You will learn and become a better person as a result 

Before you app think...
Have you done your research of the CC?
Does it fit your spending?
Do you have a plan for the bonus w/o going into debt?
Can you afford the AF?
Do you know the cards benefits? Is it worth the HP?
Message 2 of 35
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Re: I am a prime example of WHAT NOT TO DO

OP: I'm curious as to why you'll be paying $2100 per month. Did you propose to pay off 100% of your unsecured creditors in your Chapter 13 plan? The reason I'm asking is that creditors treat a bankruptcy the same way (blacklisting) regardless of the amount they're repaid in a bankruptcy.

Maybe you should ask your attorney to recalculate and see if you can pay less per month.

I wish you the best of luck.
Message 3 of 35
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Contributor

Re: I am a prime example of WHAT NOT TO DO

Due to the view of my state's bankruptcy court, if you can repay 100%...then you must. Otherwise your repayment plan will not be approved. It's a pain in the butt for sure, but I'm not too worried about it. Paying the 2100 a month will effectively reduce my "usable income" to 75k per year. I already live well below my means so this will not be an issue. I'm GAZELLE INTENSE!!!!

My Wallet: AMEX Platinum | Citi AAdvantage Exec $20k | Chase Marriott Rewards Premier $12k | United MileagePlus Club 8k | FNBO $25k | Chase Military Officers Club $9k | Discover IT $5.5k | BankAmericard $30k | PENFED Platinum Cash Rewards $10.5k | Barclay Rewards $6.15k | USAA AMEX $15k | USAA MC $16k | NFCU Flagship Rewards $25k | Logix $15k | Chase Ink Cash $12k | Paypal MC $5k | Walmart Discover $5.4k | Chase Freedom $2k | Sallie Mae $2k | Target RedCard $300 | JP Morgan Ritz-Carlton Rewards $5k | BoA Alaska $1k

Message 4 of 35
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Contributor

Re: I am a prime example of WHAT NOT TO DO

Also, not too worried about being blacklisted...I seriously have no intention of ever being in any kind of debt again. I most defenitly won't ever have another credit card. The only future loan that I see as a possibility would be a mortgage; however, even that is possible without a credit score as long as you can find a good company that knows how to manual underwrite.

I've come to the conclusion that a FICO score is quite pointless. When I was 80k in debt and making 50k a year, I had an excellent credit rating. Post BK I will have extreme cash flow and a substantial savings account...however a poor FICO score. FICO scores are not a good measure of financial fitness...just a good measure of how well you have paid credit companies. *w/ the caveat of paying credit card bills every month--however, it's still a bad habit and a dumb premise in my personal opinion.

My Wallet: AMEX Platinum | Citi AAdvantage Exec $20k | Chase Marriott Rewards Premier $12k | United MileagePlus Club 8k | FNBO $25k | Chase Military Officers Club $9k | Discover IT $5.5k | BankAmericard $30k | PENFED Platinum Cash Rewards $10.5k | Barclay Rewards $6.15k | USAA AMEX $15k | USAA MC $16k | NFCU Flagship Rewards $25k | Logix $15k | Chase Ink Cash $12k | Paypal MC $5k | Walmart Discover $5.4k | Chase Freedom $2k | Sallie Mae $2k | Target RedCard $300 | JP Morgan Ritz-Carlton Rewards $5k | BoA Alaska $1k

Message 5 of 35
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Frequent Contributor

Re: I am a prime example of WHAT NOT TO DO

Refreshing!

 

Too often on the forums I read of only the biggest and baddest new CLs...your post was a great piece of advise and one I am so pleased you had enough transparency to post.

 

Being on the rebound after a ton of medical bills and choosing not to BK...I cherish every step of the journey. Your post hopefully will be a beacon for those that could easily stumble and have no recourse....but to weather the storm and know that 7 years is a long long haul. (Make payment arrangements and stick to them, it will keep many off your various boards...we sometimes only paid $50. a month, but the docs did not report us to collection agencies, we found being humble was only best presentation to those many we owed.) 

 

Wishing you only the best and hope your circumstances improve in 2017....

 

Blessings to you and yours.

(Fico scores 580s 6/2014 - Now 720 EX 709 EQ 735 TU) FINALLY made it in the 700 Club.
Message 6 of 35
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Senior Contributor

Re: I am a prime example of WHAT NOT TO DO

Thanks for the report...it takes guts to share all that. You don't mention a job loss or health problem, and it's not mortgage or auto debt, so I'm assuming this was from just general overspending.

 

Do you feel like premium cards fueled your spending...either as part of some quest for rewards or trying to have a lifestyle appropriate for the cards? Or available credit on anything was a problem?

Spend: BofA Premium, BBP, Schwab Platinum, Freedom x 2, Costco, Discover
Perks: IHG49, Hyatt75, Delta Platinum
SD/AAoA Ballast: Arrival, CFU, DC, ED, QS
Retention games: BCP, Marriott Brilliant
Mostly earning MRs and cash back as I use up hotel and airline points spread across several programs.
Message 7 of 35
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Established Contributor

Re: I am a prime example of WHAT NOT TO DO

Matt - I'm not sure which state you live in but I'm in NJ - I filed in Aug 2009, was making > $100k abs had less CC debt than you and I was able to file CH7 BK.

Just wanted to share my experience- maybe you can seek advice from another lawyer.

Best of luck!
Penfed Platinum Sig Visa $33k, PenFed PLOC $25k, NFCU Cash VISA Sig 22k, NFCU Visa Flagship 22k, CAP1 Venture $23k, CAP1 Venture One $15k, NFCU NAV Check $15k, Barclays Arrival $13,2k, DCU VISA 5k, Cap1 QS 7.5k, WF Finance 3.5k, Merrick 2.2k, Barclays Apple Financing 6.1k BestBuy 5k >Ch7 BK filed 8/09; DC 01/10 EQ 636 Nov 13;
EQ08 718 | TU 731 | EXP 728
Inqs: EQ 11, TU 8, EXP 11(last 2 yrs)
Goal 750+ In the Garden til

Message 8 of 35
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Moderator

Re: I am a prime example of WHAT NOT TO DO

Very brave of you to share your experience with complete rawness. I know it sucks right now, but many of us have been there (I almost thought I was reading my story until I got to the RITZ! I've never had one). The good news is you can come back from it. It might take awhile......and that's ok! 

 

My BK was 5-2012 and just this past July I started rebuilding. Up until then, I was the cash queen. I didn't have any cc and didn't want any! But in today's world, at some point credit may become a necessity. So I started rebuilding. 

 

Im happy that I'm smarter, more of a planner, and more cautious this time around. The most important chapter after rock bottom, is the knowledge of how climb back up and to avoid past mistakes. 

 

I wish you much success! I look forward to following your journey! 

 

 

Got some pruning to do... No more new cards!
Message 9 of 35
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Contributor

Re: I am a prime example of WHAT NOT TO DO

WasCB14,

I think it was like "man, I have arrived"..I have a solid job, a great credit score, they've opened up these credit lines to me--that must mean that I'm worthy to live this life style. I liked the rewards points, and I generally liked the feel of having the buying power involved with my cards. However, the debt was all brought about by overspending and being financially irresponsible in general sense.

My Wallet: AMEX Platinum | Citi AAdvantage Exec $20k | Chase Marriott Rewards Premier $12k | United MileagePlus Club 8k | FNBO $25k | Chase Military Officers Club $9k | Discover IT $5.5k | BankAmericard $30k | PENFED Platinum Cash Rewards $10.5k | Barclay Rewards $6.15k | USAA AMEX $15k | USAA MC $16k | NFCU Flagship Rewards $25k | Logix $15k | Chase Ink Cash $12k | Paypal MC $5k | Walmart Discover $5.4k | Chase Freedom $2k | Sallie Mae $2k | Target RedCard $300 | JP Morgan Ritz-Carlton Rewards $5k | BoA Alaska $1k

Message 10 of 35
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