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Wednesday, August 27, 2008

After 9/11 Creditors Told Me, "There's Nothing We Can Do"

My husband worked on the 81st floor of Tower One in the World Trade Center for a company called Network Plus. On September 11th his entire office managed to climb down all 81 flights of stairs and escape just minutes before the buildings started to collapse. His boss guided the entire team of salespeople down and encouraged my husband to continue when he felt tired. At one point my husband’s boss even left the team in order to help carry a woman in a wheelchair down the stairs to safety. Miraculously, she survived as did everyone in my husband’s company. As the highest office to have every member survive, Oprah Winfrey even had them appear on her show.


The ordeal was stressful enough for us to deal with, and after a few weeks passed the company he worked for went out of business. They tried to survive by relocating but the entire city was in such turmoil that the company simply couldn’t make it work. I realized that my husband was the bread winner and I had no idea how we were going to pay for our bills. We had managed to accrue quite a lot of credit card debt and now had only my small teacher’s salary to pay for it all. As the bills continued to pile up I started to make phone calls to the credit card companies with the hopes of working out a payment plan. What ended up happening instead was my filing for Chapter 7 bankruptcy.


Before September 11th I had a credit score of about 650 and had over $10,000 in credit card debt. My payments were always on time and I rarely had any problems. Most of my debt was due to department store credit cards such as Macy’s, Ikea, Express and Spiegel. I also had an electric bill that I couldn’t pay and a cell phone bill which piled up. The interest rates were sky high, over twenty percent for each card and I knew if I didn’t work something out I was going to sink fast. Paired with the late fees I knew it would happen quickly if I didn’t do something fast. The largest amount I owed was to American Express and since they require payment within thirty days they were the first company I called.


To say that American Express is cold-hearted would be a nice way of describing them. I explained to the representatives over numerous phone calls that I wasn’t looking to get out of paying the $2,000 I owed them but that I needed more time than the thirty days. They could care less. They didn’t even sound sympathetic when I spoke to them nor did they seem to care about my situation. As if programmed like a robot, each representative I spoke with said the same thing to me, “there’s nothing we can do”. They would take nothing less than the full amount owed and as long as I didn’t pay it the late fees would continue. The late fees started to add up into the hundreds as November rolled around.


The other department stores sometimes sounded sympathetic when I told them about my situation but could do little to nothing to help me. The representative I spoke to at Spiegel was distraught to hear about my situation and immediately put her manager on the phone. He explained that there was little he could for me except to lower my interest rate from a 22% to a 12%. He waived one late fee for me but gave me no extension.


I found that no one really wanted to do me any favors at all. I explained to each one that I simply needed a two month period during which no late fees or other charges would be given to me. Even when I explained that I would be forced to file for bankruptcy they still gave me the same line – “there’s nothing we can do”.


The only company that helped me out was the bank that issued my student loans. Citibank immediately issued me forbearance for my student loans and gave me no problems whatsoever. They were nice and understanding and were actually the only company that did anything to help me during the difficult time.


My credit score began to plummet as did my credit history. After I filed for bankruptcy in December my score dropped to the low 500’s and stayed there for years. I couldn’t rent an apartment and I had a hard time getting utilities without paying a deposit. The funny thing was that my husband found a new job within months and our income was back where it was before, but none of that mattered when companies looked at my credit report.


Today my credit is back up to a 620 but is still marked with the bankruptcy. If the credit card companies had taken the time to work with me they would’ve had their money and I would’ve kept a clean credit report.

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Tuesday, August 19, 2008

The End of an Affair

Most people love money. So many people today choose to buy expensive material things and validate themselves by these purchases. Money helps people feel important, to take control, to make a statement about who they are. Money becomes a best friend, a family member, and a lover. Obtaining money is all some people can think about and all that they believe in. It doesn’t matter how they get it or who they hurt in the process, as long as in the end they get the money they need to feed their addiction.

Some people don't have the means to gain the money they desire but this doesn't stop them from having irresponsible flings with it. Even though these people may be late on their bills, they will go out and buy something they can't afford just to make themselves feel better. And it will usually work. During the heat of the moment people who make an impulsive purchase will feel like they are at the peak of their happiness. And when the feeling disappears they'll likely feel guilty, ashamed and regretful. Not much different than a one night stand.

Like all love affairs, my own love affair with money was short, sweet and tumultuous. It was both satisfying and completely unsatisfying at the same time. And similar to many love affairs, mine began at work. My job as a sales representative on Wall Street in New York City started up a love for money that would only go away after it ran its course. It became a love-hate relationship in which I began to spiral out of control.

Making a ton of money as a person who wasn’t even good at her job seemed like everything I ever wanted. I was renting an apartment in a top building and I was able to buy anything I wanted. I shopped in boutiques, purchased the newest cell phones the day they hit the market and treated people to dinners and drinks. What I didn’t realize at the time was that I was building my life around money and money was the thing that was in control.

After I lost my job the love affair became quite rocky. I no longer had the sparkle of admiration I once felt towards money since it was now seeing less and less of me. I moved out of my elevator building apartment into someone’s rental in their house. I went from having a washer, dryer, dishwasher, microwave and air conditioner to having none of these. The quiet of the building I had lived in was replaced by screaming landlords who constantly argued with each other. Instead of shopping at boutiques I started shopping at Old Navy and other discount clothing stores. Eating out and partying all the time was replaced with staying home and cooking dinner.

Some people in my situation would have never given in to the evil tricks that money played on them. These types of people would have picked themselves up, got a new high paying job and started up their love affair again. They would believe that they were back in control, but of course this would just be another trick money would play on them. The second time around would likely be more passionate than the first, and it would become a lifelong addiction that created life for those who chose it. People that would never dream of a real life affair find themselves embroiled in controversy and secret desires.

But love affairs rarely end up so happy in the end. If they do, it takes a lot of pain and struggle to get to the end goal and a lot of people get hurt in the process. I chose to end my love affair with money by replacing it with something real, a true love that was not based on sneaky escapades and under-the-cover operations. As you look back on the choices you’ve made thus far in your life, ask yourself, are you in the midst of an affair?

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Thursday, August 07, 2008

The Student Loan Dilemma

The Student Loan DilemmaWhen I decided to go to college I knew that no matter where I went I was going to take out student loans. My parents didn’t have much money to pay for college and I had little to no savings for the occasion. Instead of thinking about money and how much the bill would add up, however, the school advisor was limited to helping me choose a school. After all, I was going to have a college degree in four years so what’s the difference how much my student loans added up to? While there are some kids that have a strong and dedicated desire to be something great like a doctor, lawyer, or dentist, most kids planning for college simply go to get a degree in whatever interests them by their junior year. If you plan on going to graduate school at a hard-to-get-into college then the undergraduate school may matter. If you are going to graduate with your bachelor’s and get a job, I’ve learned the institution really means nothing.

I chose to go away to school in upstate New York where most of my friends were going. I had no clue what I wanted to do but knew that I qualified to have just about everything paid for by my student loan. The majority of the loan was through a private bank while just a minute amount was funded through the government. An even smaller amount was given as a grant that I wouldn’t have to pay back. At 18 years old, I didn’t think twice. I packed up my belongings and headed off to what would become the best four years of my life.

After I graduated college, my loans totaled over $20,000. I slowly paid off the government loan which was around $3,000 and deferred payments on my private loan. Although the rate was pretty good at 4.41% I found it impossible to pay the $390.00 monthly payment with my newly acquired job. I applied for consolidations and was denied multiple times. Since the rate was good everyone I spoke to acted as though the $17,000 should be easy to get rid of. But I didn’t go to school to be a lawyer or doctor, I graduated with a degree in Psychology that I settled on after 3 years of trying to figure out what it was I wanted to do. In fact it seemed as though my college degree was more of a high school diploma and all the places I applied to could care less what I studied, only that I had the degree. Completing 4 years of college showed dedication and an aptitude for learning and that was all anyone seemed to worry about. My job was in sales and I had no idea how I was going to pay back the money I owed.

That was 8 years ago. Today my loan now totals over $19,000. The interest keeps building up and the payment remains at $390 a month, a nearly impossible amount for a person that makes $30,000 a year to afford. Now that I own a home I’m going to try the consolidation process again to see if that will help. After all, isn’t better for me to pay something rather than nothing? It would seem from the $2,000 in interest they’ve made that the answer to that is no.

While going away to college was a great experience, was it really worth the price of a new car? I could have easily got the same degree at a local community college for less than half the price and to be honest most employers could care less where the degree came from.

My answer to this dilemma is a big fat resounding yes.

While many kids may seem like they are just going to college for the sake of it, who are we to make that choice for them? I am happy I was given the chance to decide for myself and will do the same for my children someday. Limiting a child to a local community college when they have aspirations is like telling someone who wants to be a police office they can only be a security guard. Yes, many of them will fail and end up protecting the local mall anyway, but isn’t it worth it to give them a chance?

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