Never Give Up on Paying Off Your Debt

When watching the Dave Ramsey Show for the first time yesterday I was impressed at all the people calling in and telling Dave they were now debt free or how much debt they had actually paid off. I once had over $60,000 in credit card debt and paid it all back. I had to cut back and do without for quite a while. Actually, it took me five years to pay off that debt. I was newly divorced at the time and I was left with all that debt and I will admit that I did consider filing for bankruptcy. I quickly decided that bankruptcy was not an option and set the way to paying it all off. Dave also stressed several times to never give up on paying off your debt. This is something I stress to our couple Lois and Clark and everyone else out there facing mountains of debt. You can do it!

I came across another piece of inspiration yesterday after seeing an article about the Hildebrandt Family, who paid off $106,000 of debt. Aside from their mortgage, through frugality, determination, and hard work they are now debt free.

At the start the Hildebrandt's owed $89,000 in credit card debt and $17,000 to family. They had been current on all their payments, but credit card companies began raising their interest rates and ultimately caused their payments to go up hundreds of dollars a month. This is something I feel credit card companies don't understand that raising interest rates on people who are making their payments on time can eventually cause them to begin defaulting on their payments. Of course under the credit card company smackdown creditors will limited on these kinds of practices.

Last week the Hildebrandt's were awarded the Professional Achievement and Counseling Excellence(PACE) 2009 Graduate Client of the Year Award. The award is given by the National Foundation for Credit Counseling.

So how did this overload of debt happen to the Hildebrandt's? It wasn't that they a lived a lavish lifestyle. They lived in a modest 1,000 square foot home with their twin daughters and took vacations to visit their family in the mid-west. They didn't live extravagantly, but they weren't frugal either. They always bought new clothes for the girls. They did have medical expenses related to Russell's diabetes and from miscarriages Kandy had experienced. The also stayed committed to tithing, which they gave ten percent of their income to their church.

Many tried to talk them into filing for bankruptcy, but that was not for them. They were committed to paying off their debts. The couple met with FamilyMeans Consumer Credit Counseling Agency (CCCS) and were able to develop a five year plan to pay off the debt. They new if at least they weren't going to make it they were going to go out trying.

To make it happen the couple cut back on discretionary spending and began buying generic food. They also quite exchanging Birthday and Christmas presents with each other and family members.

Even with cutting back the Hildebrandt's found it difficult to make the required $2,000 a month payments to the creditors. This was half of Russell's take home pay and it was tough. Russell took on a second job in order to make the payments as agreed. He would work his primary job as a chemist during the day, get a few hours of sleep, and then clean grocery stores at night from midnight until 4:30 a.m. Catch a couple more hours of sleep and start the whole process again the next day.

The first two years of the their debt reduction process was a rough one. Working two jobs was rough for Russell. The couple also managed to get by on one car until they received a van from a family member. While the balance on their credit cards were going down, the benefits were not yet noticeable. The couple were determined to pay off their debt. When money wasn't available they simply did without.

After a few years their hard work and efforts began to show. The balances were coming down and some cards were even getting paid off. As soon as one card would get paid off CCCS would use the extra money towards other debts and pay off the credit cards even faster.

The couple had gotten pregnant again during this time and although this would mean more expenses, the birth of another child brought a positive light to a negative situation.

In the fall of 2008 just one year from paying off their remaining debt. The couple began daydreaming about a new home. Even though they wanted a new home they new paying off their debt was first priority.

Months later a real estate called the Hildebrandt's and asked them if the would be interest in a rent to own scenario. The rent would be $1,000 a month with $200 going to escrow for closing costs expenses.

In April, the Hildebrandt's used the tax credit for first time home buyers. With that they were able to swing buying the home and pay off their remaining debt six month ahead of schedule.

The Hildebrandt's are now debt free aside from their new home. Russell has also been able to quit his second job.

The Hildebrandt's still live a frugal life and have come to learn the difference between a want vs. a need. Bankruptcy seemed like an easier solution, but it wouldn't have been as satisfying. They also would not been able to buy their new home had they filed for bankruptcy.

I have done it, the Hildebrandt's have done it, and many others have done it. You can do it too! Just like everything else you can do anything you put your mind to. Just make a plan and never give up on paying off your debt.