The following is an interview with Travis – a fellow personal finance blogger at Enemy of Debt and CareOne. He was kind enough to share his get-out-of-debt story with us as he nears the finish line next month. We hope his story will inspire you and encourage you to (if you have debt) start or continue the journey towards financial freedom.
Can you briefly talk about what your life was like (before “waking up” to your debt woes)?
My wife and I overspent starting at day one of our marriage. We had a good income, and just figured eventually our salary increases would out pace our spending. That never happened. The debt snowballed, and after a couple of years I started to hide from my wife just how much credit card debt we had. The minimum payments were getting bigger and bigger, yet I continued to supplement our income with credit card use. At the time, admitting that we couldn't afford something felt like the ultimate failure as a husband. I would spend my nights, after everyone else had gone to bed, in front of the computer applying for additional lines of credit, and moving balances back and forth trying to lower payments, doing anything possible to manufacture enough funds to make it to the next payday.
What was it that finally caused you to stop and realize you had to do something with your debt?
In June of 2009 we received five identical letters from a major credit card company in the mail, one for each account we had with them. They were changing the monthly minimum payment policy from 1% of the balance to 3%. When I did the math to figure out what that would do to our minimum payments each month, it was painfully obvious that we could not make those payments. We had to do something.
You've been pretty open about your debt (in terms of numbers) – can you briefly list what you had accumulated?
We had thirteen credit cards totalling over $109,000 of consumer debt.
Was your family initially on board with getting out of debt – and if not, how did you convince them to get on board?
We didn't have a choice, and my family accepted that. Not to say there haven't been bumps along the way. When you're used to a particular lifestyle, downsizing can be difficult. But we have never taken our eyes off the finish line, knowing that have been working towards a better life for the last four and a half years has helped keep us moving forward on our path to financial freedom.
Practically – what are some of the steps you took to begin your get-out-of-debt journey?
The first thing I had to do was come clean to my wife about our situation. That was the most uncomfortable conversation I have ever had. I had to admit to the person I promised to share my life with that I had failed her and broken her trust completely.
After that conversation we started to investigate our options. We wanted to avoid bankruptcy, but knew that it may be our only option. We talked to our bank about a consolidation loan, but they were unable to help. We started searching the internet for debt relief options, and over the course of about a week took a crash course of self-education on debt management programs, debt settlement programs and bankruptcy.
After a lot of research, and several phone conversations, we enrolled in a debt management program with CareOne Debt Relief Services. They negotiated a monthly payment at a lowered interest rate resulting in our debt being paid in full in 3-5 years. In exchange for these accommodations, all our accounts would be closed. We make one monthly payment to our debt relief provider, and they disperse payments to our creditors.
Additionally, we had to significantly cut our monthly expenses. It took us a long time to realize just how much we had to downsize our lifestyle to live within our means. But over time, and through constant evaluation of every expense we eventually have ourselves living on a consistent budget within our means.
How has a credit counselor helped you?
Not having those lines of credit to lean on has forced us to live within the income we have. To do that, we had to do make a budget, which is something we had never done before. Our debt relief provider has a wealth of budgeting tools and tips available, as well as an online community where customers go to share tips, tricks and motivation to each other.
What has kept you motivated to get out of debt?
Over the last four and a half years my wife and I have struggled to learn how to budget, and discuss our finances. It's taken a lot of hard work, but we finally have a system that works for us. It feels great to know each week after we leave our budget discussions that we are on the same page with our finances. We know how much money we have, and where it's going. That feels so much better than staring at a computer screen trying to figure out how to shift credit card balances around to make it to the next payday. That feeling keeps us moving forward. Knowing that we have survived this process for over four years, making our family better and stronger, is such an awesome foundation to build on. On February 28th we will make our final payment to our debt management program, and the $2489 we have been paying to our debt will go into our pockets. Having that on the horizon has us running towards the finish line!
What would you say to others struggling to get out of debt – how might you encourage them?
You don't have to struggle with debt. There are options out there, do not be afraid to use them. Educate yourself on all possible debt relief options, pick the one that is best for your situation and go for it. It's NEVER too late to take control of your life back.
Thanks Travis – and congrats on paying it all off next month! Travis will be responding to any comments/questions on the blog, if you have any.
26 Comments
YES! Next month is going to be awesome! And so will the months after that, for that matter. Great a great success!
Nice job paying down the debt! That’s a great accomplishment in itself. You mentioned using CareOne, which has a bit of a mixed reputation. For example, this website seems to think they are evil incarnate:
http://www.consumeraffairs.com/debt_counsel/careone_credit.html
While this one ranks them as one of the best in the business:
http://www.prweb.com/releases/debt-relief/debt-relief-services/prweb10381627.htm
Can you shed any more light on your personal experiences with just CareOne and whether you experienced any of the issues that are mentioned in the link which gave them lower ratings.
Good luck to you in your new debt free life!!!
Hey Andy, GREAT question. Before I answer, I want to make sure that it’s crystal clear that I do not work for CareOne (even though I am a customer blogger for them), I am not expected to tow the company line, or sing their praises. My answer is purely my own, based upon my experiences.
I’ve read countless reviews and articles on CareOne as well as other debt relief companies, and people who have a negative experience generally fall into one of three categories:
1.) Genuine bad experience – let’s be honest, every company drops the ball every now and then. I have read testimonials of customers where the company didn’t do what they promised, or screwed up somehow. That’s going to be the case with every services company. The important thing is that they handle these situations positively.
2.) People Who did Not Understand what they were getting into: There are two different debt relief programs – debt settlement and debt management. (I am enrolled in the latter, just for the record). Potential customers need to understand the differences between the two, how they work, and how they will impact them BEFORE they enroll. I spent a total of 3 hours over two phone calls asking our representative questions, as well as countless hours reading testimonials about how the program works and how to be successful in the program. Before I enrolled I knew exactly what I was getting into before I enrolled and therefore I was successful. If you do not know what you are getting into, or how the program full works, you will likely be disappointed.
3.) People who did not stay involved in the process. Many people who encounter issues do not stay involved in the process – they think it’s a “sign up, set it, and forget it” program. Customers MUST check their creditor statements each month, monitor their proposals and stay involved in the process. If they do not, they may encounter problems.
I spend a good amount of time responding to threads in their online community from fellow customers – it’s my way of paying it forward. It was because of their online community that I was successful, so if I can help others be successful I want to do that. Being in debt SUCKS HARD. It’s difficult to tell someone that is trying to get their life back on track that they could have been successful if only they would have done X or Y.
I personally haven’t had any bumps in the road with the program (other than the ones I created myself by not handling my finances correctly).
I would recommend CareOne to anyone… but I would caution them to first learn about ALL their debt relief options (consolidation loan, debt management, debt settlement, and bankruptcy), and then make an educated decision that is right for them.
Hope this helps….if you have any other questions, feel free to reach out to me via the contact page at Enemy Of Debt, or my twitter handle: @debtchronicles.
Thx for the response. Great and detailed answer. Look forward to reading more from you!
That is fantastic, Travis! Well done!
Love the hot tub story.
So, no that your so close to debt pay off, have you thought about your goals after debt?
Thank you, Celeste! After our final payment we’ll be focusing on a.) playing catchup with our retirement accounts b.) saving for our kids’ college education and c.) working to pay down our mortgage as much as possible. Thanks for reading!
Well done Travis; glad you got there and it feels great, doesn’t it? You know we paid a very large debt as well ($157,000 in three years) and I’ll never forget the feeling when it was all gone – comparable only with getting my driving licence (yep, this was so important) and giving birth to my son. Enjoy the feeling and get some saving and investing goals going – we find that keeping to the habits developed when paying off debt works well for the accumulation of capital to invest. I reckon we’ll be financiall independent in five years.
Congrats to you as well, Maria – I believe our stories were both shared in a post over at BudgetsAreSexy! I completely understand where you’re coming from with how big of a day it was for you when it’s all gone….I imagine it as being life changing – and it will be for us too! Thanks for reading!
Travis, I never, ever tire of hearing your family’s story. I’m guessing that, if you come DTIs, we’re in about the same place as you guys, so your story always reminds me that we CAN dump our debt. Thank you, so much, for being so willing to help others by sharing your story, Travis.
I’m glad that you find inspiration in our story, my friend – that’s why I continue to share our story, hoping that it will help others continue to push forward and take their lives back. It’s unfortunate that we haven’t met in person yet seeing how we live in the same state – one of these days we have to fix that. :)
Phew, this was really rough. Over 100K is not a small number. Happy to see you have taken the right steps and you’re in such a great spot now. Congratulations for your success and never forget the lessons you’ve learned all these years
Thanks, dojo – I appreciate your kind words. We have learned so much about how to talk to each other, who we are, and what is important to us over the last 4 and half years. We will definitely not forget those lessons!
So inspiring to read. My story is almost identical.
My husband and I are on month #3 of our massive debt journey, as well. Even though we are only in the beginning of our 4 year process with a credit consolidation company, I am already feeling like less of a slave to the (mis)management of my monthly shuffle of money.
Any insight on what you did for unforseen emergencies during your pay-off process? I am having anxiety about paying for the future–given kids, house, medical, etc.
I made a countdown calendar for myself so I can peel off a sheet after each payment. Looking forward to it dwindling down!
Congratulations on taking that first step towards getting your finances back on track, Melissa! I wish I could tell you that we did everything perfectly during the 4.5 years we’ve been on our program….but we haven’t. We’ve had to borrow money from people on more than one occasion for unforeseen expenses. The best suggestion I could make is to put together a plan to get an emergency fund started as soon as you can. It may be tough…no, I KNOW it’ll be tough. Thinking back to when we first started our program I know we were struggling just to make ends meet as we were not used to not having any lines of credit. But you have to pinch just a little more to get that emergency fund started. OR, find some kind of extra income to help fund it……for me it was starting my blogging activities as well as secret shopping. You’ll be glad you have it when you need it. :) I’d love to keep in touch with you as you move through the program, Melissa….if you ever need some motivation, or want to ask any questions about how things worked for me on debt consolidation program, please feel free to contact me via my twitter ID (@debtchronicles), or via the Enemy Of Debt Facebook page, or the contact form at http://www.enemyofdebt.com. Good luck!
Wow. An amazing story of resilience!
Thank you, Michelle – it wasn’t easy, and there were times when we were ready to chuck it all and just declare bankruptcy. But that really felt like almost starting over in our quest to get our financial lives back – so we stuck it out, and here we are, less than two months away from being done with the program!
Congrats again on your accomplishment to become debt free Travis! Very inspiring :)
Thanks for your kind words, Blair – although we won’t be debt free….there is some consumer debt that we couldn’t enroll in the program. the good news is that we will have control over our finances, and no longer need the help of a debt relief program. We have a plan to pay the rest of our consumer debt off very quickly. Great to hear from you!
That is indeed an amazing story. Congrats to Travis and his wife. Just under $2500/month for 4 1/2 years! That takes commitment and an incredible amount of discipline. Way to go. I’m curious as to what they bought – furniture, flat screens, hot tub, traveling??????
All of the above, Jim! Interesting story about the Hot Tub….not only was that thing expensive to buy, but we live in Minnesota…and the electric bill to keep that thing hot was insane. When we started our journey to pay off our debt we didn’t realize just how out of synch with reality our spending was. We actually kept the hot tub AND the high utility bill for two more years. One day we woke up and just though, “What the hell are we doing keeping this thing?” Habits are hard to change, but we’re finally living in reality and living within our means.
Wow, what an amazing story! So glad you will be debt free next month, what an accomplishment.
Thank you, Belinda…it has been quite a journey to get here, and we are VERY excited to finally have control of our lives back!
Thank you for the opportunity to share my story with your readers!
Thanks for being open about your journey Travis! Inspiring stuff.