 Former
credit card connoisseur triumphs
Perez Hilton: from
big debt to celebrity blog success |
Perez Hilton says his life -- and his finances --
has drastically changed.
Hilton, whose real name is Mario Lavandeira, was once
a debt-ridden college student who declared bankruptcy. Now he's
earning a reported six-figure income with his popular and controversial
blog that covers celebrity gossip.
"I am happier than I've ever been because I'm doing something
that I love for a living, and that's really rare and I acknowledge
it," Hilton says.
Not too long ago, the now 28-year-old was like many
others in "Generation Debt": a struggling college student
heavily reliant on credit cards.
Generation Debt has been defined as those ages 18
to 34 who are overwhelmed with both credit card debt and student
loans.
"Credit cards are used by many of these debtors to
close the gap between expenses, needs, low starting salaries and/or
costs of living on your own," says Carmen Wong Ulrich, author of
"Generation Debt: Take Control of Your Money -- A How-to Guide."
"The availability of easy credit and the 'norm' of
having credit card debt have created a climate of plastic-is-OK.
Some young adults have more trouble discerning between 'needs' and
'wants' when it's so easy to plop down a card and deal with it next
month," she says.
Living
it up
A couple of impractical decisions threw Hilton's life into a tailspin.
During one semester at New York University, he decided to study
abroad, in Spain. He ditched his cautious use of credit cards and
soon ran up the balances on his accounts.
"I had this kind of mentality like, you know, I may
never be in Spain again and I may never be in Europe again. So let
me just do this and let me just do that," Hilton says.
"I spent so much and I kept telling myself: You may
never come back. This may be a once-in-a-lifetime thing. It's OK
to spend all this and you will figure out how to pay it all back
later."
When Hilton returned from Spain
he wanted to move out of his NYU dormitory to an apartment. That's when his financial
situation went from bad to worse. He didn't have enough money for a deposit. So,
he took out a cash advance on one of his credit cards. Hilton was soon thousands
of dollars in debt, attending school, working part-time and trying to pursue an
acting career. He didn't have enough to pay off the
debt, so he rolled the debt onto other credit cards.
"I could put all the money on a new credit card to
get a lower interest rate, but then I still couldn't pay it all
off."
He continued to collect credit cards and continued
to charge everything. He finally got to the point where he had nearly
a dozen credit cards and more than $50,000 in debt.
In the fall of 2005, Hilton became one of the thousands
of last-minute filers seeking to erase most of his debt in a Chapter
7 liquidation plan before the changes to the new
bankruptcy law took effect.
The
credit dilemma
The availability of credit is a big part of the problem with members
of Generation Debt, according to Todd Mark, director of consumer
relations for Consumer Credit Counseling Services of Greater Atlanta.
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