A few years ago when interest rates were way down, I decided to look into consolidating debt and refinancing my home, which I own with my husband.  We were using 12-15 credit cards on a regular basis, but had never actually added up how much we owed.  When I did add up all those figures, I realized we were over $90,000 in debt.  WOW!  I couldn't believe things had gotten so out of control.

I had to do something about this mounting debt and all these payments that were sucking the life out of us. We didn't have an extra dime after making just minimum payments and were still using credit cards on a regular basis.   We needed debt help.  There were several advertisements on TV promising to help you live normally and pay your debt at the same time.  I contacted several CCA's (credit counseling agency).  It seems I was refused by all.  The most painful truth of all....a credit counselor attorney told me that filing bankruptcy looked like the only alternative.   

The interest rate and payment minimum on every card  was already as low as it could be and always paid on time.  We had perfect credit and I wanted to keep it that way.  Before we ended up so far in debt we would never see daylight, I wanted to get help. I freaked knowing my husband was going to be disappointed in me and would soon be aware of how bad our financial situation really was. I was frightened as to what was going to happen to us because of it.  He didn't take care of the bills, I did.  He used the credit cards, but I did a whole lot more spending than he did.  He trusted my decisions, and I let him down. 

 
Even though for a long time we were short each month, there seemed to be enough because of all the constant balance transfers.  Sometimes, actually often, I kept some of the cash and spent it on every day normal living. The problem snowballed.  Because our credit was so good, daily by mail we were inundated with checks for as much as $10,000 from the credit card companies.  Oftentimes the checks were blank.  Whether it was to transfer a balance from another card, or if  just wanted to go shopping, it felt like there was no limit.  I knew Peter had robbed Paul in order to make the payments for a long time, and the truth now was about to come out. We had far more going out a month than money coming in.  I just didn't bargain for what was going to happen next. 

 
One of the CCA's called me back!  I was thrilled.  He promised to help get part of the balances forgiven and percentage rates lowered.  The highest rate was was around 9%. My minimum payments would be less, but I still would have barely enough money to make it. He promised after 3 months of timely payments, our minimum payment would be slashed almost in half if we needed to do that.  Something I knew we could  live with.  I was in awe this guy could help me.  I literally felt the burden of my debt and guilt float up and blow away.  It was important to me to repay what I owed.  He just made a dream come true.  No bankruptcy. By this time my husband was somewhat aware, but not completely.  I wouldn't have to crush his faith in me after all! I wouldn't have to feel so guilty that things went dangerously out of control.  I was ecstatic there was an option to make it right.

We SIGNED POWER OF ATTORNEY over to this company to represent us with our creditors.  We paid an initial fee of  well over $1000.  The immediate advice from our new found fiduciary: "Do not make another payment to your creditors, because they would not make a deal through a CCA if we weren't delinquent."  That information didn't feel right.  My bills were paid on time.  I had to trust them though.  That was the end of April. 

By mid May my phone was ringing off the hook.  Creditors were demanding payment.  I patiently repeated a similar message to each one.  "Such and Such CCA would be sending out my payment soon. Look at my good record of payment. I have every intention of honoring my bill."  I truly meant every word.  That excuse didn't last too long with them.  My phone didn't stop ringing. The calls continued into June, even though I sent the CCA the amount  required to pay my entire monthly payment.   By the end of June very beginning of July, it was clear there was a real problem. Not one of my creditors had heard from my CCA.  The CCA admitted that they had "overlooked" putting us into their system.  I was furious (which I think kept me going) and literally beside myself with disbelief.  I tried to get the guy to talk to me, demanding an answer as to how he was going to fix his mistake.  He had zero remorse.  I believe the CCA had caller id.  Many times when I called them you could hear the phone pick up, but then would hang up before answering. I was just about nuts.  During that time, only one of my creditors agreed to a separate deal that they told me couldn't get any better even with a CCA. I had to take it, but honestly at that point I didn't know who to trust.  The phone did not stop all day and into the night, creditors wanted a payment.  I was a frazzled bundle of nerves.  

 
The interest rates had sky rocketed on all  of the cards and minimum payments went completely out of reach.  We were in serious financial trouble.  After struggling to no avail with CCA #1 for 4 or 5 months, I contacted the Attorney General's office. Even though I felt somewhat responsible, I couldn't allow the CCA to get away with such a serious CRIME.   The payments were never made by CCA. None of what was promised came to light.  The CCA had no license to offer their services in my state. I foolishly never checked on the validity of the company.

The AG put me in contact with Florida's Fraud Unit (that is the location of the CCA).  Thankfully, I got back my initial fee.  The CCA paid each of my creditors for the months worth of payments I had given them.  The CCA was supposed to reimburse me the literally thousands of dollars in added interest because of their "mistake".  That money was never returned to me and I didn't have it in me to fight to try and get it.

The reason I held on with CCA#1 as long as I did was because I was told I couldn't switch CCA's for five years. Once I was set up on a program it was imperative that to stick with it.  WRONG.  I found another CCA and told them my horror story.  CCA #2 also promised they could help me.  This time I checked the company out through the Better Business Bureau. 

CCA #2 quickly and efficiently contacted all of my creditors and helped get me started on timely payments.  What a relief.  However, the budget was almost impossible. I still sparingly had to use credit cards, because there simply was not enough money to go around.  I was miserable knowing that for the next several years, we only had enough money to barely squeak by. We managed though. 

Unfortunately for us, my husband went permanently disabled the following year.  He received a monthly disability insurance (paid through the union) check for six months.  At the end of six months, which was the day after Christmas, we got a call there would be no more checks because the doctors had deemed him permanently disabled.  They told us retirement disability should be paying him. We had zero income from him, after the first of December until the end of February.  I gave it my all to try and keep our creditors happy.  They would not work with me in any way. Sorry to say it was a complete relief when we decided in April (just two years after contacting the first CCA) we had no choice but to file bankruptcy. 

I thought this was important for your readers to know. Two years of paying  more than a whopping $1,500 a month for just credit card payments we ended up  $120,000 in debt!  Our furniture was old, a normal 27" TV, no big toys (snowmobiles 4-wheelers etc.), no vacations, our house still needs windows replaced.  Did we spend that much? No.  Between fees, interest from late payments and still using the cards to live we incurred well over $20,000 from the start of contacting debt help. There was zero forgiveness from the credit card companies, even though I had a bogus CCA. The CCA's are actually FUNDED BY THE CREDIT CARD COMPANIES.  The new company however more efficient than the first one, still approved a budget for us that was impossible. Their goal was getting us on a payment arrangement (it was mine too), but it couldn't be lowered enough so we could still make our other bills as well.

 

Cut up your credit cards.  Keep one for emergencies if you must.  Do not impulse shop with a credit card, think long and hard before you make a purchase....Is this necessary? Then pay off the balance each month.  I do not understand how or why, but the credit card companies are allowed to offer, give, lend, whatever term you want to use, with no accountability as to how the money will be repaid.  I have referred to them as legal loan sharks.  Go to a bank at least they make sure your income is enough to repay the amount you want to borrow. Take control of your  spending before the cards and their lure ruin your credit or worse.

I live in a state where homes are not exempt in bankruptcy. Had it not been for my husband being disabled we would have had to give up our home, a high price to pay for carelessly using too much plastic.  Bankruptcy was the last resort and will hurt us for a long time to come, but we have taken steps to rebuild our credit.  Not because we want to go into debt again, but the price we pay for many things we have to have such as insurance, is affected by a bad credit score.  Our vehicle is old and needs to be replaced.  We can get a loan, but we have to pay an incredibly higher percentage rate. 

 

What did I learn from all of this?  It is POSSIBLE to LIVE WELL WITHOUT CREDIT CARDS. Take the steps necessary to get them out of your every day life. The very design of their payment set up will keep you PAYING FOR A LONG TIME!  Keep track of how much you spend. 

 

Advice from our attorney: Do not consolidate credit card debt onto your home.  I am so thankful we didn't.

 

STOP using your credit cards.  

 

Sincerely,

 

Sharon Lapierre   

194 Prescott Road

Manchester, Maine 04351

207-621-1794

 rocky2acres@adelphia.net

 

PS I would be happy to be contacted by anyone with questions.