How I Got Into and Out of $45,000 in Credit Card Debt

Walter was one of millions of Americans financially swept under during the Great Recession a decade ago. Before the downturn, he and his wife owned a large home in western North Carolina where they were raising two young children, paying for it all with a solid job as a network engineer for an international technology company.

Then, like some sinkhole opening under his comfortable life, everything went haywire. The economy tanked, Walter lost his job and for six months struggled to find work in a faltering economy. There were few prospects in the Carolina mountains, and the couple started covering expenses with credit cards. It didn’t take long to rack up $45,000 worth of debt, a problem that Walter admits was partly due to poor money management.

Finances grew more desperate. For six months, the family had no luck trying to sell their home, which had become a drain on their sharply reduced income. Walter knew demand for information technology professionals was stronger in Charlotte, North Carolina’s largest city, so he and his wife decided to lock the door and move.

Walter and his wife, who both have master’s degrees, rented a townhouse. They found jobs, but his wife lost hers after a year, adding to their problems. For a while they continued paying the mortgage on their old home, but the drain of more than $2,000 a month was more than they could afford, and they decided to stop payments and accept foreclosure.

Though Walter’s new job eased their cashflow problem, growing credit card debts were eating up their income. The balance on the cards rose to around $45,000, and they could only afford to make monthly minimum payments – enough to keep them solvent, but not enough to reduce their debt.

“We were in a desperate struggle,” Walter said. He said his wife followed a dream to become a high school teacher, a career she enjoys, but one that pays less than her old position as an executive assistant. The balances on their eight credit cards continued to grow.

“I was staring down bankruptcy,” Walter said. “It was bad.”

In 2013, Walter was in his mid-40s, his kids were approaching their teens and the family financial road map seemed to end at a brick wall. Walter decided to act. He called InCharge Debt Solutions.

“We just decided we couldn’t do this on our own,” Walter said. “We decided that we needed help.”

InCharge arranged a debt consolidation plan with the family’s creditors. Walter agreed to cut up his plastic cards and to pay $987 a month for 4 ½ years to settle his debts.

The plan wasn’t without pain, but Walter said his monthly payments were no larger than the minimum-balance charges he’d been paying on his cards. Each payment reduced the balance on what Walter owed.

“The debt management program meant a real adjustment to our lifestyle,” Walter said. “We moved from using credit to living on cash. As a household, we were in the 93rd or 94th percentile by income in the state, but we became extremely frugal.”

Walter bought a used car for $2,000 and only used it for work – no pleasure driving. And the family stopped eating out. Still, paying for growing children and rent ate through the income.

“I get paid, and the money had a shelf life of about 20 minutes,” Walter said. “It almost all went immediately for groceries. InCharge sent us some information about how to curtail grocery bills. It wasn’t something I’d thought about before.”

The couple clipped coupons and no longer ate out. Walter dropped his cable television service and thought twice before buying anything. During the years under InCharge’s nonprofit debt-management program, he took his kids on one vacation, to Disney World, taking advantage of every deal he could find.

Clothing was another problem. Growing children require new clothes, but Walter and his wife shopped for bargains and delayed spending on themselves.

Even during the years of austere living, though, Walter managed to save retirement money through an employer 401(k) retirement plan, and the couple built modest college funds for their children, the oldest of whom will be a high-school senior next year.

This spring, after nearly half a decade of pinching pennies, the ordeal ended. Through sacrifice, Walter’s family will begin a new phase of debt-free living. He said it’s a terrific feeling, and he reminds anyone trapped in financial quicksand that escape is possible.

“My biggest advice is to accept the inevitable lifestyle changes,” Walter said. “Cut you entertainment budget to zero. Stop going to restaurants. Look for sale items at the supermarket and never waste leftovers.”

Walter said there are three options for getting out of debt: “You can decrease spending, you can increase your income, or you can do both. We did both, and with the management plan, it worked.”

Joey Johnston has more than 30 years of experience as a journalist with the Tampa Tribune and St. Petersburg Times. He has won a dozen national writing awards and his work has appeared in the New York Times, Washington Post, Sports Illustrated and People Magazine. He started writing for InCharge Debt Solutions in 2016.