I had hoped it wouldn't come to this

Posted 12.11.08

After about 6 years of painfully having credit card companies look for ways to pull the rug out from under me, I've decided to file bankruptcy. Chapter 7; you know, the REAL one?

I wish I would have looked into this a long time ago. You see, I've been running my own web design business for about 3 or 4 years now, and by year 2 I had picked up a nice chunk of debt. Maybe about 30K or so? Not a big problem, because my credit was pristine and I had decent interest rates all hovering around 10%. I also had a credit score well above 700 at all three reporting agencies, and above 740 at two of them. For the uninitiated those are awesome credit scores.

In the previous years I had never missed a payment, and had only been a day or two late once or twice - ever. Those occurrences did not affect my accounts, and happened long before Bank of America bought out the banks who had issued me credit.

Unfortunately my good standing was not good enough for Bank of America. After a "routine credit review" they decided I did not deserve the interest rate I had agreed to open credit with. I had not been late on any payments when this happened, I had an excellent FICO score, and I carried a balance and paid them interest. I was in all ways an ideal customer for them.

But they wanted more, so up went my interest rate to 24%. When questioned they could give no specific reason and they wouldn't lower it. After a few months and lots of angry phone time I got it knocked down to around 21%.

The result? My monthly payment went up. My finance charges more than doubled. And my debt which had finally stabilized started to snowball.

This was around the time when I was actually starting to make a modest profit, and I had to piss it all away on my new expensive credit plan. Talk about crushed dreams.

Fast forward to now and that 30K has turned into over 60K. But not anymore. In a couple months I'll be right back to 0. I'll have a nasty blemish on my credit report, but I don't care. Great credit didn't seem like it mattered much so I don't feel like I'm losing anything.

My only qualm is the credit lines I have with Wachovia, who were honest and didn't play games with our agreement. I had turned to them to try and consolidate, but they were only willing to do part of the amount I needed to get off my other accounts and it ultimately I just couldn't escape. It's unfortunate that they have to take a hit along with the bad guys. Maybe they should have a few lobbyists pushing against unfair credit practices and laws. In this case it would have been to their benefit.

If I had it all to do over I would have defaulted as soon as my interest rate jumped unfairly. I recently learned if you default and ignore them for a few months they suddenly become willing to settle for much less than you owe. Like 20 cents on the dollar less.

I wish people weren't so afraid of defaulting when banks step out of line. Taking their profits when they misbehave is the only force that will make them stay honest. And we're the ones who give them those profits so the responsibility lies with us.

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