Growing at the Speed of Failure
Debt on the Run – Write-Up on MainStreet.com
When we started our married life out, we were neck-deep in credit card debt. Not just debt, but past-due collections debt. Here is bit of our story as written by Jeanine Skwronksi. The whole story can be found here.
Original story by Jeanine Skowronski
NEW YORK (MainStreet) — When the Federal Reserve announced earlier this month that credit card debt had risen for the first time in two years, many economists touted it as a sign of recovery. However, Americans may want to charge wisely. Last year, the average personal debt in this country – not counting real estate loans – stood at an astounding $10,168, whereas during the late 1940s and early ‘50s, that average was closer to $2,000.
How do Americans amass so much debt? It’s not the big purchases, Dave Jones, President of the Association of Independent Consumer Credit Counseling Agencies, tells MainStreet.
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Related Articles“It is the impulse buying that really adds up,” Jones says. “It’s not big-ticket purchases. People are very good at tracking those items. They know what they are spending on them.”
But unlike the big purchases, the small ones soon add up, affecting payments on larger loans and creating what Jones calls a “snowball effect.”
We asked our readers to share their financial woes, and as expected, most didn’t end up in debt by taking out a bad loan or making one large purchase. It was a series of unfortunate, often small, events that led to the big money troubles.
Read on and learn by example as these consumers describe how they got in and (thankfully) out of debt.
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Debt on the Run
When Matthew Peters and his wife Fiona accumulated more than $38,000 in past due credit card bills, they tried to deal with the debt by avoiding it.
“We decided to move from Madison, Wis. to Scottsdale, Ariz.,” Peters says. He adds that they didn’t notify their creditors because they didn’t have a phone, so they believed they couldn’t be contacted. Of course a few weeks into the move, a credit collector called Fiona at work.
“He berated her and threatened to send a sheriff to her office and server her papers as well as garnish her wages unless we began to repay the collection companies,” Peters tells MainStreet.
“We got so scared that we got serious about paying everyone back immediately. We stopped spending money on anything that wasn’t necessary for life support. We had no phone, TV, internet, didn’t dine out, go to movies,” he says. “To communicate with family we would use a $6 a month voicemail and make calls from an outdoor phone at a Burger King across the street with a calling card.”
The Peters coupled their newfound frugality with part-time consulting gigs on weekends. They also took on freelance work after-hours.
“Within 18 months of the terrible phone call from that credit collector, we were debt free and had almost $30,000 cash in a checking account,” Peters says. They also moved back to Wisconsin and now teach others how to get out of debt efficiently.
