How Matt Paid off $23,000 in Credit Card Debt
Matt Holladay knew he was in trouble four years ago when he sat down at his computer and Googled the word “bankruptcy.”
Holladay and his wife Denae had $23,000 in credit card debt and owed another $10,000 on an unsecured personal loan. They were both working and trying to keep up, but the best they could do was minimum payments. The interest alone on the debt was eating them up.
“I’d make a payment every month and the balance would never change,” Matt said. “It was frustrating and really disheartening.”
That’s when he asked the Google search engine for some help.
“Everybody told me that bankruptcy or a debt consolidation loan was the only way out,” Matt said. “I looked into a consolidation loan and that wasn’t going to help. It was like moving a bunch of stuff from one room in your house to another and saying you cleaned up. You still have a mess, you just moved it somewhere else.”
So he Googled bankruptcy and the first story that came up offered help and a phone number for InCharge. He called and asked about filing bankruptcy, but the credit counselor advised him to slow down. She asked if he had researched debt management as a solution.
“Debt management? That wasn’t even a term in our vocabulary,” Holladay said. “I had never heard of it.”
Debt management is the program InCharge offers to consumers who have enough income to pay off their debt, but may need some education on money management and help putting together a budget to make it happen. The credit counselors at InCharge asked Matt and Denae about their income and spending and came upon a familiar theme.
“We were using credit cards irresponsibly,” Matt said. “We both sort of knew that, but money was one of a handful of topics we never talked about. It was an emotionally charged topic in our house so rather than start an argument, we just avoided the subject.”
The Holladay’s credit card spending wasn’t all that unusual – gas, groceries, clothing, visits to restaurants – but there was never enough money at the end of the month to pay off the balance. Matt had a job at an auto body shop that gave bonuses at various times “and I promised myself I was going to use the entire bonus to pay down our debt,” he said.
“But I never did.”
Then came that one event that brought it all to a head. The Holladay’s decided to take their daughter Emma, who was four at the time, to Disneyland in California.
“We basically paid for the entire trip with the credit card,” Matt said. “Air fare, hotels, eating, tickets to the park … everything.”
A month later, the bill for that trip arrived and so did the rest of the usual monthly bills for rent, utilities, phones, etc. The couple realized there wasn’t enough money to pay rent so Matt had to use his credit card for a cash advance to avoid eviction. They had reached the cliff financially.
“I was heartbroken and felt totally helpless,” Matt said.
Fortunately, that’s when he learned that a debt management program – not bankruptcy – could bail his family out.
“When I called InCharge, I was met with compassion and understanding,” Matt said. “I was surprised to learn that I had some options. We became more self-disciplined and learned to set goals every month. My wife and I call it ‘Squeezing the Lemon.’ It turned things around for our whole family.”
Matt began checking their InCharge account online every month and celebrating the success as the account balance declined.
Denae suddenly became interested in how this was affecting their credit score. She regularly checked the progress there, with the same enthusiastic result.
The formerly forbidden subject of finances became a regular topic of conversation. When the couple paid bills at the end of the month, if there was any money left over, they threw it at their balance and saw the pace of success increase.
What started as a 60-month program to pay off $23,000 of credit card debt took the Holladays only 40 months. Matt says their credit score spiked from the low 600s to above 750 and they were able to get a loan for a new house and a new car in the last year. Along the way, they welcomed a baby boy, Cairo, to join now 10-year-old Emma.
“Living within your means shouldn’t be a foreign concept for young adults,” Matt said. “We have a comfortable home, an affordable mortgage, a nice savings account and we’re making strides on a retirement account.
“We learned a lot about managing money and even more about ourselves because of the relationship with InCharge. We are going to be forever grateful to InCharge Debt Solutions for helping us gain financial independence.”