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American Morning

More Americans Filing for Bankruptcy

Aired November 21, 2002 - 07:43   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


BILL HEMMER, CNN ANCHOR: With the economy right now struggling, it is no surprise perhaps that more Americans are filing now for bankruptcy. Those filings in the second quarter of this year set a record.
In this morning's edition of "Real People and Their Money," meet a woman who filed for bankruptcy about a year-and-a-half ago -- 18 months ago. Now, she's working her way back on top. Jenny Chizmar joins us live today from Denver, Colorado.

Good morning to you.

JENNY CHIZMAR, FILED FOR BANKRUPTCY: Good morning.

HEMMER: Can I get this right a second here? You were in the hole $28,000?

CHIZMAR: Correct.

HEMMER: How old are you?

CHIZMAR: I'm 29.

HEMMER: How did that happen, Jenny?

CHIZMAR: I think it all started when I got the first credit card on the college campus, got my free t-shirt, and I was well on my way to credit card debt. With that credit card came no counseling on how to use that credit card wisely, and pretty soon, things just started piling up when I got my first job and I was well on my way.

HEMMER: What were you buying?

CHIZMAR: Just about everything, and in many cases, it wasn't so much what I was buying, it was just that I was managing my money very poorly. And I was using my credit as a clutch, really, to get myself out of these situations. And then, when I literally felt like I turned around and had thousands of dollars of credit and had no idea of how to take care of it.

HEMMER: OK, now, you had two options essentially: Chapter 7 and Chapter 13. Without getting too technical, educate me and the viewers of why you chose Chapter 7 for your case to get you on the track.

CHIZMAR: Sure. Again, I'm definitely not legal counsel here, but as it was explained to me, Chapter 7 is the total erasing of your debt vs. Chapter 13, which is actually a payment plan established over a number of years, whereby then you receive your debt discharge. So, it can actually be a longer period of time that your bankruptcy is on your credit record.

So, I chose to wipe the slate clean essentially and just start over from the very beginning with the Chapter 7.

HEMMER: Do you have any credit cards today, Jenny?

CHIZMAR: I do have one that I pay off every month.

HEMMER: How much discipline does that require based on your history, I wonder?

CHIZMAR: A lot, quite a bit. And actually, about a year before I filed, I began to develop good habits, and when I finally sat down and realized what kind of trouble I was in, I began to develop the habits.

HEMMER: What kind of habits, though? What did you do?

CHIZMAR: Sure. Budgeting, really just tracking my money. I mean, I think the biggest lesson I learned here was just simple awareness of how much money I was making vs. how much I was spending very month.

HEMMER: Now, do you think you kicked it?

CHIZMAR: I think so. It's never easy, and it's definitely constant vigilance, but I think I'm on my way.

HEMMER: Now, the credit card companies that you owed money, did you ever go to them and say, you know, look, I'm in the hole, I need to work this out, any creative financing you can do with me?

CHIZMAR: Oh, I most certainly did, and it was interesting that when I first approached the companies -- even though I had developed my good habits for about 12 months, I had been making payments on time, and in one case, I had never made a late a payment on a credit line -- but there was still no leeway from them to lower my interest rates. So, I had to go forward with the bankruptcy option.

HEMMER: Hey, what would you tell folks who are watching this who might find themselves in a similar situation? Your advice to them is what in a word or two?

CHIZMAR: Bankruptcy is not the first option, it's not even the tenth option, but it is an option. And if you have to do it, you can recover and you can make it.

HEMMER: You're debt-free, right?

CHIZMAR: I am.

HEMMER: Completely out of the hole...

CHIZMAR: Absolutely. HEMMER: ... $28,000 paid back and clean. Congratulations to you.

CHIZMAR: Absolutely. Thank you.

HEMMER: Good lesson learned, Jenny.

CHIZMAR: Thanks.

HEMMER: Jenny Chizmar live in Denver this morning, "Real People and Their Money" -- appreciate your sharing your story with us today.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.







Aired November 21, 2002 - 07:43   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: With the economy right now struggling, it is no surprise perhaps that more Americans are filing now for bankruptcy. Those filings in the second quarter of this year set a record.
In this morning's edition of "Real People and Their Money," meet a woman who filed for bankruptcy about a year-and-a-half ago -- 18 months ago. Now, she's working her way back on top. Jenny Chizmar joins us live today from Denver, Colorado.

Good morning to you.

JENNY CHIZMAR, FILED FOR BANKRUPTCY: Good morning.

HEMMER: Can I get this right a second here? You were in the hole $28,000?

CHIZMAR: Correct.

HEMMER: How old are you?

CHIZMAR: I'm 29.

HEMMER: How did that happen, Jenny?

CHIZMAR: I think it all started when I got the first credit card on the college campus, got my free t-shirt, and I was well on my way to credit card debt. With that credit card came no counseling on how to use that credit card wisely, and pretty soon, things just started piling up when I got my first job and I was well on my way.

HEMMER: What were you buying?

CHIZMAR: Just about everything, and in many cases, it wasn't so much what I was buying, it was just that I was managing my money very poorly. And I was using my credit as a clutch, really, to get myself out of these situations. And then, when I literally felt like I turned around and had thousands of dollars of credit and had no idea of how to take care of it.

HEMMER: OK, now, you had two options essentially: Chapter 7 and Chapter 13. Without getting too technical, educate me and the viewers of why you chose Chapter 7 for your case to get you on the track.

CHIZMAR: Sure. Again, I'm definitely not legal counsel here, but as it was explained to me, Chapter 7 is the total erasing of your debt vs. Chapter 13, which is actually a payment plan established over a number of years, whereby then you receive your debt discharge. So, it can actually be a longer period of time that your bankruptcy is on your credit record.

So, I chose to wipe the slate clean essentially and just start over from the very beginning with the Chapter 7.

HEMMER: Do you have any credit cards today, Jenny?

CHIZMAR: I do have one that I pay off every month.

HEMMER: How much discipline does that require based on your history, I wonder?

CHIZMAR: A lot, quite a bit. And actually, about a year before I filed, I began to develop good habits, and when I finally sat down and realized what kind of trouble I was in, I began to develop the habits.

HEMMER: What kind of habits, though? What did you do?

CHIZMAR: Sure. Budgeting, really just tracking my money. I mean, I think the biggest lesson I learned here was just simple awareness of how much money I was making vs. how much I was spending very month.

HEMMER: Now, do you think you kicked it?

CHIZMAR: I think so. It's never easy, and it's definitely constant vigilance, but I think I'm on my way.

HEMMER: Now, the credit card companies that you owed money, did you ever go to them and say, you know, look, I'm in the hole, I need to work this out, any creative financing you can do with me?

CHIZMAR: Oh, I most certainly did, and it was interesting that when I first approached the companies -- even though I had developed my good habits for about 12 months, I had been making payments on time, and in one case, I had never made a late a payment on a credit line -- but there was still no leeway from them to lower my interest rates. So, I had to go forward with the bankruptcy option.

HEMMER: Hey, what would you tell folks who are watching this who might find themselves in a similar situation? Your advice to them is what in a word or two?

CHIZMAR: Bankruptcy is not the first option, it's not even the tenth option, but it is an option. And if you have to do it, you can recover and you can make it.

HEMMER: You're debt-free, right?

CHIZMAR: I am.

HEMMER: Completely out of the hole...

CHIZMAR: Absolutely. HEMMER: ... $28,000 paid back and clean. Congratulations to you.

CHIZMAR: Absolutely. Thank you.

HEMMER: Good lesson learned, Jenny.

CHIZMAR: Thanks.

HEMMER: Jenny Chizmar live in Denver this morning, "Real People and Their Money" -- appreciate your sharing your story with us today.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.