Waiting For The Light At The End of The Tunnel - A Brief Tale of Financial Survival And Credit Card Repayments
By Anonymous
My wife and I are in our early forties and we have three young children. As a result of some bad business decisions we made several years ago, mostly dealing with trying to fund the growth and development of a business idea using credit cards, we ended up with an astronomical debt and have been teetering on the edge of bankruptcy ever since.
In fact, it's a miracle that, for these past couple of years, we have managed to avoid going bankrupt, especially since during most of this time there was no income to make the credit card repayments, and my wife, who used to earn a very good income working in the IT industry, has had to stay at home to care for our young children, the youngest of which was still breastfeeding until only a few months ago.
I'd like to take this opportunity to share with you how we have survived for so long without going bankrupt, how the pressure of the debt has affected my wife and I and what options have been made available to us during this time. Maybe this will help you if you are in a similar situation, and maybe you can help us, by sharing some of your thoughts, comments and ideas after reading this post.
First of all, even though I am by no means a religious person, I really think we have been "looked after" somehow during this time by some Divine force which I don't understand, since the numbers just don't add up. With a credit card debt of almost US$160,000 and no income to service it, my wife and I spent many months living like Indiana Jones making narrow escapes in the deadly jungles of monthly debt repayments.
In the first few months, we sold whatever we had until there was nothing left to sell. We didn't own a house to begin with, nor did we own any of our three cars (all leases), so we couldn't sell those either. Hang on a second, I hear you say ... three cars? Yep, what a nightmare!
A good friend of mine who needed a car for work but couldn't get one due to a bad credit history, has taken over the repayments of one of our cars. After looking at the options and doing some calculations on the second vehicle, we worked out that we had no choice but to keep it, as the alternative would be to sell it for less than the cost of paying it off and ending up with no car and an outstanding debt on the lease.
The third car came later, when my wife recently got back into the workforce and part of her salary package included an allowance for a work vehicle. We had previously sold all of our shares and used up all of our superannuation funds to keep the business going (before we started tapping into credit cards), so that was no option. We had a parcel of land and a small investment property, however, so we sold that off fairly early on, which bought us a couple of months in the beginning of our dreadful journey into spiralling debt.
One of the strategies we used to keep ourselves afloat for a while, was to accept new credit card offers that allowed us to roll over the balance from an existing card to the new one. We would time it so that the payoff from the new company would happen just as the statement in the old card was due. After a while, however, that no longer became sustainable, because the repayment amounts just got larger and larger.
At one stage, when we began to seriously doubt our luck would hold out much longer and we began to look at bankruptcy information, we were disappointed to see that most of the advice being offered, although sensible, did not apply to us. We do not have a house we can refinance and the advice of "cut down on expenses" just seemed too trivial.
I'm not saying that being told to cut down on expenses is not good advice. When you owe $3,500 a month in credit card repayments, however, the idea of spending time and effort shopping for inferior brands just to save an extra $150 a month seems a bit too unreal and hopeless.
Fortunately, at the end of last year, our youngest child was just old enough to be weaned from the breast, so my wife started looking at getting back into the workforce. I had just finished an eighteen month consulting contract interstate that paid only for our basic cost-of-living expenses but hardly touched on the debt repayments (my wife also started an eBay business during this time, which allowed us to juggle some of the payments and her parents refinanced their home to help us meet our shortfalls). She got a good paying job in another part of the country, so we had to move again, which only added to our costs.
Currently, my wife is working full time in her new corporate role and I'm home looking after our three children. Two of them go to school and the youngest, who is only three is home with me all day. When I'm not changing diapers, attending to my little one's needs, or driving the kids to and back from school and other activities, I use whatever available time I have left to build an online business, which is just starting to bring in a little money.
Although my wife and I have a very strong and loving relationship, the stress of this situation combined with the pressures of raising young children has affected our health and the way we sometimes behave towards one another. For example, I find that my frustrations often get the best of me and I am very impatient with the children, especially as the night drags on and they start doing what all kids normally do around bedtime, which is to refuse to co-operate in helping us get them ready for bed.
In May of this year, we wrote to all of the financial institutions we owe money to, explaining our situation fully. Every single one of them we very understanding and ended up granting us a moratorium on our repayments for a few months. This period of grace has given us a little time to breathe and get our heads together to try and get a better handle on our situation.
Although we are nowhere near resolving our financial situation as I write this, if there is anything positive that I can communicate from our experience to others who may be suffering in the same way as my wife and I are, is that you should not try to run away from your creditors.
Instead, call them before they start calling you and always be very honest, open and willing to work with them to find practical solutions to your circumstances. You don't want to make things worse for yourself and your family by adding extra pressure on your health and your emotional wellbeing and your creditors don't want to lose their money, so look to them as part of your solution, not part of your problem.
If my story inspires some comments, ideas or suggestions from you, I'd love to hear your thoughts.
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