In debt...Loads of it; somewhere north of $100k in law school loans alone. A few thousand in credit cards, maybe. Take the bar exam, then spend a few months traveling -- probably the best thing I ever did for myself. Rack up a little more credit card debt, but not that much. At that point, in for maybe $7k. Manageable.
Begin looking for a job, with no success whatsoever. Take another bar exam. And then a third. A top-20% law school GPA and carrying three different law licenses does not seem to be helping my job-hunting fortunes. In the mean time, do contract work for other attorneys for $20 / hour, knowing that they were charging their clients at least five times that rate for my work. Realize that all of the attorneys for whom I was doing work were their own boss, but not one of them was smarter than me. Bite the bullet, hang my shingle, start my own practice.
No capital available to me other than credit cards. Become an expert at reading the fine print attached to balance transfer checks, and manage to borrow more than $30k at permanent interest rates of 3 to 7%. Become an expert at robbing Peter to pay Paul; across 10+ credit cards over 5+ years, no more than 5 total late payments -- most the result of a failure to press the right button on a web page somewhere -- none more than 30 days. Other than my carried debt as a percentage of my available credit, my credit report always has been -- and remains to this day -- spotless.
In 2006, settle my first big case and having grown well tired of moving every 12 months or so, purchase the condo I was renting from the owner. Pay more than I prefer, but didn't care so long as I didn't have to move again. And besides, I'd already lived there for 6 months, liked my neighbors, and liked my neighborhood. How often does one get to test drive real estate?
Being self-employed and having an insufficient income history meant that in order to be able to acquire financing to purchase the condo, I needed to utilize a sub-prime lender, Aurora Loan Services ("ALS", whose trademark once proudly boasted that it was a division of Lehmen Brothers Financial, recently bankrupt and now defunct). My loan calls for me to make payments of interest only for the first 5 years in the amount of about $1,100. After that, payment of interest and principal varies with the prevailing interest rate published in the Onion on the last Thursday before each full moon...Or something like that. Of course, like everyone else, I paid no attention to any of that, as my mortgage broker assured me that by the time it started adjusting, my solid income history would mean no problem re-financing. Unfortunately, that advice was wildly incorrect.
Four years later, no lender will re-finance a property to more than 80% of its appraised value, and my condo is worth $30k less than the price at which I purchased it. In other words, in order to re-finance of my property, I would need to bring at least $30k to the closing table. Uhhhh...Yeah...Right.
Contact ALS regarding my loan, inquire as to whether a modification might be available to convert my variable-rate mortgage to a fixed-rate mortgage, which would lower my payments and secure their investment. They decline on the basis that I "make too much money". Not missing the message, I cut my own salary.
This, of course, means that someone will not get paid this month. I have already decided it will be Chase. That is step 1. I intend to use my failure to pay Chase to get ALS's attention that they might be next. They, at least, will be given a choice by the end of the year: Modify my mortgage or you're the next parasite that I'll starve. Chase deserves no such dignity.
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