Last summer, I saw a train wreck coming and was able to avert it by making a pre-emptive strike. Although I had rejoined my 12-step group for compulsive debting after falling off the wagon big time, the amount of money I owed on credit cards each month was way more than I was earning. I was continuing to debt by maxing out my overdraft account each month and bouncing checks. And I had virtually no savings readily available.
After reading Jerry Mundis’ book
Without any emotional ties to my situation, they helped me come up with a spending plan where my needs were put first and I was able to live very comfortably within my means. This meant no more living in deprivation – I actually had money each month to buy underwear, get my hair done by someone other than Ms. Clairol, and pay the mortgage in full and on time each month.
But it also meant contacting each of the credit card companies and telling them what I could pay each month, which was far below what they wanted me to pay.
This was particularly scary because in 20 years I had never NOT paid my creditors what they wanted when they wanted it.
As I called each of the credit card companies, I was adamant that I wanted to pay them every dime I owed them. I was also adamant that I had to do it on my terms – and my terms did not call for me to pay them off while I struggled to keep a roof over my head and food on the table.
Anticipating endless harassing phone calls, I requested during each initial call and in a follow-up letter that the credit card companies not contact me by phone, but instead only via letters. I reminded them that under the law, they had no choice but to abide my by request not to call.
Finally, I requested that they stop charging me late fees. And, I explained about seeking help from Debtor’s Anonymous.
During each of my phone conversations, I took copious notes and remained very professional – even during one phone call with a guy from Chase who was obnoxious and rude. No matter how much he tried to goad me into a fight, I just kept calmly restating my case and explaining that all he was getting from me each month was X amount of dollars.
Every month after the initial phone calls to my credit card companies, I diligently wrote out checks for what I could afford and sent them with a letter re-stating what I had already said on the phone. Even if my creditors hadn’t agreed to my terms, they accepted the money. And, whenever I had extra money available, I also sent this to the creditors so they would see that I was serious about wanting to pay them back.
Eventually I was able to work out repayment plans with each of the credit card companies. They all lowered the interest rates they were charging me and they all stopped tacking on late fees.
They all also pointed out that I was ruining my credit score; but as I pointed out, I was going to ruin it one way or another because I couldn’t afford to pay them what they wanted, so why not just be upfront about it and save us all a lot of grief.
As you can see by my debt totals over there on the left, my debt is no small potatoes. It will be years before I am debt free unless I win the lottery (probably not going to happen), or suddenly lose my mind and throw all my retirement money toward the debt (definitely not going to happen).
All I can do is not add to the debt by not using credit cards or overdraft accounts; and keep chipping away at that grand whoppin’ total “one day at a time.”