"I wanted in my heart to pay what I could, but I couldn't see no way out. When you can't see no way out, and when they start hunting you -- dropping lawsuits on you and this and that. But I didn't let it get that far."

He signed up with Debt Free, one of many loan-consolidation programs that, for a fee, bundled his debt and collected one monthly sum. Willie had 15 cards. Why so many? They were living off the cash advances, and each card had a limit of $500. He assumed that cash would be "cheaper to pay off" when in fact cash advances are assessed at a higher interest rate than purchases. That was a first lesson.

"If you got it to give it, then that's fine," he says, "but if you don't, you can't just go and steal it. You know what I mean?" Every month, he says, the "money wasn't increasing, it was decreasing." Willie had no assets: no home, no car. His furniture was bought at Goodwill -- "if you want to call that an asset."

"You're living day to day," I said.

"There it is there."

What Willie feared the most was that his creditors would begin "garnishing my checks." Without rent money, "I'd have no place to live and I'd be back out on the street. Once you start going [in] that direction, what does your life become? A nightmare." Willie had been homeless years before. "It's not a good feeling. It's hard; you don't get the respect. You're out there, every man for himself."

The month before he filed for bankruptcy late last year, Willie saved enough money to make all 15 minimum payments. He says it was the least he could do. Those people needed their money, or at least the small portion of it that he could pay.

The worst part of bankruptcy, he says, is having to abandon his dreams. "I wanted to one day, if things got better and I went to buy a house, use those credentials [of good credit]. That's the only part that got to me. I want to be that A student. Now it's, like, they pull my file up and -- oops, bankruptcy. I don't feel like I did a bad thing. I feel like I didn't expect the worst."

The problems with debt led inexorably to Willie and his girlfriend splitting up. I asked whether she tried to help him pay any of the debt or whether she had saddled him with it.

"There it is there," he says, meaning the latter. "She hates that it happened. Now she says, 'I didn't mean to.' I couldn't [do any] spousal abuse for that fault there. Things happen. The best thing for me to do was to try and figure what I needed to do [for myself] without any hard feelings. The bottom line is I'm the one who's going to take the total loss."

After he paid the lawyer, Willie "went straight home and took the scissors" to his cards. "It wasn't like I was losing anything; I was already losing something just by having them. It was a relief."

Willie now says people should have a credit card or two, but they should be careful not to exceed the limit "in case something happens in the long run. You get a lot of cards, it's just like handing you cash. You have visions, but you don't have the vision to see what's going to happen later on down the road."

Willie's family had no monetary problems while he was growing up. "My mom was the money manager. She owned two houses. My dad was out working. My mom did all the budgeting. She had a bachelor's degree; she was bright. Coming up, we had a foundation. I had some good parents. Back then, it was all about pinching and saving -- saving for rainy days. We didn't get everything we wanted. It wasn't about going to the ATM machine; it's all about plastic now." Today, he says, if anyone were to make a big purchase with a stack of bills, "They'd be looking at you real hard."

Now 46, Willie works for a nonprofit demolition company called the Alpha Project running a crew that tears down houses or staffs lines during fires. He's been doing it steadily for ten years. He makes nine dollars an hour and has never had a raise.


The nine debtors and three attorneys seat themselves before the trustee. Overseeing the day's 341(a) hearings, he sits at a desk with a laptop computer and sheaves of paper. Behind him are two large signs, one in English and one in Spanish, warning people that the FBI investigates all bankruptcy crimes. He calls the first case. He asks for a picture ID and a Social Security card. Then he administers the oath to the debtor: under penalty of perjury, you must tell the truth. First up is Dave, a tile setter from Poway with a goatee and an unwashed dark green T-shirt. He looks to be in his late 20s. A cell phone, snap latched in a leather holster, rides on his belt. Dave states his name and address. The trustee asks: Have you reported all of your income? Have you read your bankruptcy papers? Do you understand what you've read? Have you received any new income since you filed? Dave's answers are sincerely deferential: "Yes, sir. Yes, sir. No, sir."

How much is your monthly income? $1372. Rent? $700. Food? $250. Car? $330.

The trustee accepts the assertions. It's a public airing, though the only public here is commiserating debtors.

Are there any creditors here on behalf of this case? The room is silent. The trustee announces the final relinquishing, ringing the bell of societal forgiveness: "Your debt is discharged," he says. "Sally McCormick?"


Elaine grew up near Fallbrook on an avocado ranch where her father supervised farmworkers. Her parents had not gone to college and knew little about personal finance. Though they could not afford to pay their rent, the family somehow made it from one day to the next. When Elaine's younger sister was born, the family borrowed money to buy a condominium; their monthly payment was steep. That's when "things went downhill." Both parents were working full time, but they had no savings and no idea how to manage their bills. Their situation worsened as they accumulated debt with department stores such as Target and Mervyn's. Within a few years, her parents filed for bankruptcy.

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