A debtor's success story

iVillage Member
Registered: 04-19-2003
A debtor's success story
1
Tue, 10-04-2005 - 8:43pm

I realize this is a support group for those in debt, but I thought I would share my story and hopefully provide a little encouragement along the way.

I got my first credit card shortly after graduating from college. I had a job, and was only re-paying student loans at the time (no rent, car note, etc) and so using a credit card seemed like an innocent enough luxury. Little did I know that this "luxury" would eventually cause me misery.

As a working girl in her 20's, I enjoyed what so many others were enjoying--vacations, a constantly growing wardrobe, eating out, clubbing, shopping, shopping, shopping. Within 10 years, I had accumulated well over $30,000 in credit card debt. On top of that, I had student loans and later, student loans for graduate school. I was drowning in debt. My income was not keeping up with my spending habits. The madness was so far gone, that I had several credit cards with the same company, and I didn't know which one I was paying and which one I wasn't. This caused me ever increasing anxiety and sleepless nights, but because I needed to feel better, I continued shopping. And then the phone calls began--at work, at home..there was no respite for me.

I hit bottom one day in 1999 when I sat down with a stack of bills and realized that I just didn't have the money to pay them all. I had no savings, no safety net to rely on. My parents were older and living on a fixed income. I had no boyfriend or husband to bail me out, and my friends were in no better shape than I was. Besides, I was too ashamed to talk about my troubled relationship with money and how I had managed to sink to such a low. Here I was, a supposedly intelligent and educated woman who was out of control with her spending and barely able to come up with the money to get on a train to work every day.

My only hope was to take out a mortgage on my home. The home was already paid for by my parents, and I had inherited the house after my father's death. It pained me so to mortgage something they had worked all of their lives to secure. The fear and guilt were eating at me. But what choice did I have? It was either that, or declare bankruptcy. By that point, I'm sure my credit score was shot, but I was too afraid to even check it. I had no true idea how badly in trouble I was.

So, I contacted a mortgage company and got the ball rolling. It was an anxious and nerve wracking experience for me, but after several weeks, I received checks that totalled $90,000 to clear all of my debt. You heard right...$90,000. That was the total of my debt, between credit cards, car loan and student loans. I took $8,000 of that money and bought a new furnace for my house, since the old one was spewing black fume every time I turned it on and it was only a matter of time before the fumes killed me. It'd say that was a pretty necessary expense!

Being debt free, other than this mortgage that I now carried, was the most amazing experinece of my life. I opened up a savings account (my bank had closed my old savings account for lack of deposits..sheesh) and started to slowly build an emergency fund. Three years ago, I re-financed my mortgage, got a lower interest rate and have been able to stay debt free ever since.

And what about all the credit cards? I closed them all down, except for one. In total, I got rid of 22 credit cards. I've since learned that doing that probably sank my FICO score to the basement, but psychologically, it was what I needed to do. I had to remove the temptation, much the way an alcoholic has to stay away from the bottle.

Today, I have just one credit card and the balance is never more than I can re-pay in a month (maximum of $1,000 at any given time). I have a decent savings account and I add to it faithfully every payday. My car is seven years old but still running and I own it outright. I have a retirement plan at work that I can now afford to contribute towards. I have replaced my addiction to shopping with other activities. Every time I am tempted to spend, I remember the anxiety and worry of being in debt and it stops me cold. I'm almost 40 and planning for my retirement is now the focus of my life.

So, my message to all of you is this--it can be done. You can dig yourself out of the black hole that is debt. I was lucky that I had a home and equity to sacrifice. I have vowed to never again fall victim to the "shop till you drop and pay later" mentality that plagued me for years. But it is a battle that I fight every day.

Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Tue, 10-04-2005 - 9:39pm
Thank you for sharing!!!