In August 2000, i got married to S. By our 3rd wedding anniversary, we had racked up some MAJOR debt.
Define "Major", you say?
18 Credit Cards.
21 Creditors.
2 new computers.
1 new house.
1 new car.
new couches for the new house.
new bedroom furniture.
new refrigerator.
Hospital Bills
Doctor Bills
Student Loans...
Is that enough? I'd say so.
With just the Creditors, we were over $60,000 in debt. (not including cars, house, computers, doctors, student loans...yadda yadda yadda...)
It was depressing. We paid what we could, but it wasn't much. The car fell behind. The house fell behind. One by one...credit cards were becoming later and later and later. We really did what we could. We cut our eating out down to almost nothing, we cut off cable, and really, not one morsel of food was wasted. There were nights of coming home to no electricity because we couldn't pay the bill. We borrowed money from parents on countless occasions just to make ends meet. We knew we couldn't afford to sell the house, because there's so much money involved in that. Besides, to get back into an apartment would require a credit check. Need I say more about that? Our car wouldn't fit us, our stuff and our two dogs, so we stayed with the house.
Our phone rang constantly from 8 am to 9 pm with rude, harassing creditors telling us how bad our credit was going to be messed up, and my response was always the same. "You're not going to make it any worse than it already is."
A couple of loans ended up defaulting, and with some more borrowed money, we got a computer paid off.
Finally, when we couldn't take it anymore, we tried some financial counseling, but it wasn't a fit for us and the situation we were in. For you Dave Ramsey fans out there - if it works for you - great. keep it up. It wasn't feasible for us to work the way he thinks you should live your lifestyle.
We finally asked around, and decided to step out on a limb, and try a debt consolidation company. There are a lot of scammers out there, so we had to be very careful. I made a phone call to Money Management International (referred to from here on out at MMI), a Consumer Credit Counseling Service company, and began the process. That was by far the best decision we ever made. It took a lot of time, and we had to gather so much information, and then proposals had to be sent to each company.
Many of the creditors agreed to the proposals, and they even lowered interest rates to almost nothing. Most of them were at 0-1%, one stayed at 17%, one was at 5% or 9%, so they were all in all pretty low. We had to sign an agreement that we would not open any other credit cards, apply for any loans, or ANYTHING that touched our credit as long as we were on this plan. If we did, they could kick us off the plan, and we were on our own again. We had so much debt that the consolidation plan payment was more than our house note each month. For nearly 5 years, that payment was made on time each and every month. Never late. Even when our house payment was 3 months behind - our MMI payment was taken care of.
MMI was so easy and friendly to deal with. If a creditor contacts you, you just refer them to MMI, and MMI deals with it.
Along the way, we've had a few troubles with one or two creditors, and one ended up taking themselves off the program, and then refused to accept a new proposal. Their loss for that time.
Here it is - April 2, 2009, and S made the final payment to our Debt Consolidation Company yesterday. No April Foolin' here.
It.
Is.
Finished.
Oh.
My.
God.
And God is who I owe this to. Without His help, we couldn't have done this. Not only did we keep this up through a major move from Houston to San Antonio, but we managed to keep it going through one of the toughest times ever - our divorce. No matter what, God always provided for us. We had a car up for sale that we ended up being able to keep - we were able to sell our house in a fairly short amount of time, and now we are seeing the rewards.
We have one more credit card to pay off, and it will be paid off in a matter of a couple of months, and then we're done. S was gracious enough to let me skip a few payments when times were tough for me financially on my own, so I will make those up at the end. I can't wait for the day I put that last amount of money into S's account, and then i can actually say "I'm debt free..." It will feel like I just got a huge raise.
Both of us have actually been able to finance cars in these last months of the plan, because our credit shows most of those credit cards paid off.
I can say this: (and this is my advice - ) If you are able to have a credit card that you pay off each and every month, NO MATTER WHAT - more power to you. That's awesome. If you can't pay your debt off each month - I would highly suggest you stay clear of the credit cards. If you don't have the money for it, don't buy it. Everything I buy now is paid for when I walk out of the store with it.
With all that being said, here is a link to a pretty great video that sums it all up. I'm sorry I couldn't add it straight to the blog...
Enjoy!
Stay out of Debt Video (Seriously - watch it...)
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