MTV's True Life Documentary Shows the Real Cost of Being in Debt

MTV's True Life special "I'm in Debt" is the financial equivalent of one of those "Blood on the Pavement" driver's ed videos. It's horrifying and should be required viewing for all teenagers.

The three twenty-somethings profiled on the show have already accumulated massive amounts of debt with little or no income available to pay it off:

• Amy (22) has $14,000 in credit card debt and is marginally employed. Debt collectors call her constantly and she still splurges on tanning and shopping.
• Daniel (25) has a $900/month mortgage payment, thousands in credit card debt and is in between jobs.
• Ashley (21) has $20,000 in credit card debt. Her debts have forced her to move back home with her parents and consider bankruptcy.

I wish I could find a clip of this show online; MTV only has a summary and slide show. The real star of the episode is bankruptcy attorney, Russell Simonetta. He takes the time to explain the bankruptcy process to Ashley and the impact it will have on her credit. He even goes so far to talk to her about how bankruptcy could stop her from getting an apartment, loan or job in the future. Hooray for Russell! I hope that there are more sincere and smart bankruptcy attorneys out there like him.

In contrast, the credit counselor Ashley goes to see (as required for bankruptcy filings) tries to sell her on a 41-month debt negotiation plan that will damage her credit extensively and only save her $3,000 in the long run. This scene highlights just how worthless the government mandated credit counseling really can be. Luckily, she chooses bankruptcy instead and seems to have learned some valuable lessons.

The show will air on MTV this Wednesday night (3/7) at 8:00 pm and again on Saturday (3/10) at 9:00 pm. Anyone with teenagers, college students, financially irresponsible relatives or debt problems of their own should tune in. Even better, set your TiVo to record and you'll have the video ready to play anytime you are tempted to overspend.

Comments

[James]

Good stuff!

[Lola]

Just curious, how would the debt negotiation plan damage her credit? As far as I understand, filing for bankruptcy is far more damaging to her credit, and will have a major impact on her for many years, while the plan outlined by the credit counselor would actually help build up her credit.

I do agree with you about the lawyer, though. In just the few moments we saw of him, he came across as very competent and thorough.

[EmilyPeters]

Hi Lola! Debt negotiation and bankruptcy both have their place, but each will damage credit in a different way.

When you sign up with debt negotiation you are likely to have a lot of late payments reported on your accounts for a long time. Each late payment will damage your credit for 7 years. Debt negotiation is best for consumers who already have really bad credit.

Bankruptcy damages your credit, but the damage is less widespread and your credit will recover more quickly.

[Dee]

These girls are all a disgrace, why none of them seems to want to work. Ashley, wants to work only part time, and get out easy with bankruptcy, why could she not get a full time job or take on a second job. The girl with the mortgage, why not work two or even three jobs, oh no that may get in the way of the card night with friends or spending time with her man.. Then Amy is just unwilling to work or attempt to find a job, she wakes up at 3pm and then sits on her butt watches TV, instead of hitting the pavement and finding a job. She makes a comment about getting a new number to avoid creditors, why, she is the nuisance, using there money and then refusing to work to pay back her debt...
All of these ladies, are immature and lazy. When I was in college I worked three jobs and still kept a good GPA. All the girls parents need to make them work and pay rent and stop bailing these lazy cows out of there legal issues.. This is sickening, when I watched this I felt angry...