DEBT IS DUMBI hit bottom in March, 2007. I found myself with crushing consumer debt that I couldn't pay.(full story here)
Amazon.com card $4566.51
Simmons VISA $5783.55
Capital One MC $6893.15
Lowes Credit $1876.00
Yahoo Visa $33011.45(no, that's not a misprint)
Total CC debt of $52130.66. Add to that another $8000 or so of student loans, and I owed more than $60,000 with no way to pay it back.
Ok, NOW what??? I was seriously considering bankruptcy, and had made an appointment with a BK attorney. But, I found an e-mail discussion group(more like a support group) that discusses Dave Ramsey's financial principles. He has what are called "Baby Steps" to get out of debt.
1 - $1000 to start an emergency fund
2 - Pay off all debt using the Debt Snowball
3 - Three to six months of expenses in savings
4 - Invest 15 percent of household income into Roth IRAs and pre-tax retirement
5 - College funding for children
6 - Pay off home early
7 - Build wealth and give! Invest in mutual funds and real estate
But in order to do that, I have to somehow get my expense lower than my income. First steps:
Cut up all my credit cards. When you're in a hole, STOP DIGGING!
Cancelled my Netflix subscription. Got the student loans deferred for a year. Cancelled my home phone line, so I use the cell for everything now. Contacted my creditors to explain my situation. Chase held two of the cards, the Amazon card and Yahoo. I was able to enroll in a hardship program that would drop the interest rate and monthly payments for a year. This was/is instrumental in getting me back on the right track. Previously, my Amazon payment was $100/month with a 18% or so interest rate. The Yahoo payment was $800 with an 15.22% interest rate. I think the rates on both had gone up because the balances were so high. With the hardship program, the Amazon payment dropped to $46/mth, and the Yahoo payment dropped to $324/mth. The interest rate on both cards dropped to 6% for 12 months. The student loans still accrue interest, so those balances will climb for a while.
| Creditor |
Starting Balance(3/1/07) |
Current statement balance |
last statement date |
Paid off since 3/1/07 |
Payment |
Projected payoff date |
| Lowes |
1876.00 |
451 |
8/17/07 |
1425.00 |
0 PAID! |
Sep 2007 |
| Amazon |
4566.51 |
4350.76 |
9/23/07 |
215.75 |
46 |
Jul 2009 |
| Simmons VISA |
5783.55 |
5331.43 |
9/23/07 |
452.12 |
107 |
Jul 2010 |
| Capital One |
6893.15 |
6478.67 |
8/17/07 |
414.48 |
127 |
Mar 2011 |
| Yahoo VISA |
33011.45 |
31190.00 |
10/5/07 |
1821.45 |
324 |
Sep 2013 |
| Student Loan Corporation |
4368.08 |
4732.58 |
-364.50 |
deferred |
unknown |
|
| Nelnet Student loans |
3213.61 |
2923.70 |
289.91 |
deferred |
unknown |
|
| TOTAL |
59712.35 |
55744.95 |
3967.40 |
I'll be updating this table monthly. The projected pay off dates will of course change as time goes on. The original projection was August 2013. I need to shorten that time. I've been looking for a 2nd job, but unfortunately haven't found anything yet. And, I'm not sure what's going to happen in April 2008 when the Chase card hardship program ends.
I'm also in the process of selling off a bunch of stuff to help pay this down, through a combination of eBay, Amazon, half.com, Craigslist, and CheapCycle. So far I've sold two music keyboards, two sound modules, a flute, a Saris bike rack, a DVD player, VCR, and several DVDs/CDs/books. It isn't much in the grand scheme of things, but every little bit helps.
--Eldred
Currently on Baby Step 2
Ebay ID: epickett Current auctions
Amazon.com ID: epickett63 Total earned 8/11/07 - 8/25/07:
Half.com: http://shops.half.ebay.com
Amazon.com: $111.61
I am also working on selling more items mail-order. Half.com: $122.11
If you would like to be on our mailing list, please send --------
your name and mailing address to the e-mail address at the Total: $349.62
bottom of the page. Mailing list customers will receive
special discounts and deals!
Milestones: 3/28/07 - last CC use - I paid my cell phone bill
8/11/07 - created and posted this page. 6/11/07 - BEF of $1000 complete
--------------------------------------- 8/23/07 - Lowes credit paid off
8/28/07 - Opened Ebay store! More to come later.
9/12/07 - Yes, I need to do some more updates. Sales have slowed down a lot, and I had a couple other stupid things come up. I'm still trying to get back on track.
I have a challenge with a lady on one e-list to see who can pay off their current snowball CC first. I challenged her even though her ballance was $400 lower than mine. I *got* challenged by a lady on another list to see who could list the most items for sale in September. While I jumped out to an early lead, it's only because her internet connection has been flaky. Apparently she normally lists 40-50 items a day. I'm lucky to list 40 in a WEEK... In other words, I'm gonna get KILLED... :-)
10/13/07 - UPDATE: I actually won the listing challenge! She never got a chance to list any stuff on Amazon, even though she did some on Ebay. So she's going to send me a book as a prize. Cool... :-) I've discovered that the lady I challenged in the CC payoff contest will likely win easily. Her card is scheduled to be paid off by May 2008. Mine won't be paid off until June 2009, unless I get an huge amount of cash from somewhere. If I could find an extra $600 per month, I could pay it off in April 2008.
I've also agreed to be 'arrested' as part of the Muscular Dystrophy Lockup 2007. I need to raise $1200 in bail by Wednesday, Oct 17. Please consider donating.
2007 Lock-Up
I've acquired a domain for my ebay sales website. Please check http://www.PPSpecialtyGifts.com
Questions, comments? Please send an e-mail to epickett(at)gmail(dot).com