How I made the change

February 21, 2009 at 8:58 am (Uncategorized) (, )

I’ve never actually explained the reason I started my debt-free journey, so I thought I’d tell the story.

In 2004 I had no debt. I had a business with an ex-boyfriend, and it went well, but when we split up, he wanted me (understandably), to pay my half of the inventory expenses of purchasing the items we sold. Before that, he was the one fronting the money (he had the income, he started the business, and I was younger, in school, with no available income). I had to take out an SBA loan to do so. I was also in the last year of my degree at college. I would make money, but then never quite pay off the SBA loan. Then, in the next 2 years, I decided it wasn’t working out working together like we were, so I wanted to break it off completely. I had to take out a personal line of credit from the bank to pay out my share. I could have slowly paid it off but I didn’t.

At this point I graduated from college, and tried to make a living making art. Not fully successful, but I was so used to not having to hustle to pay the bills that I basically rested on my laurels. I got a part-time job in the arts about a year after I finished, but that didn’t fully pay the bills (on $12/hr, part-time, no benefits, and I was responsible for all taxes). After about 2 years I realized it was a big problem, and had to get a real job. I couldn’t live on borrowed money anymore. So I did get a job, also in the arts. It’s a good job, pays relatively well, for the industry, but wasn’t like I was making $60K a year, either. It was a liveable wage, not excessive, but just enough.

So fast forward to last year.  I would go through cycles of binging and purging. I would buy a lot, and use my loans to pay for my living expenses, since I had used them all on other inconsequential things. Then I’d get a big paycheck and pay it all on the loans, not leaving enough for living expenses. You see the problem.

I realized by last summer that I was in really bad shape but didn’t know what to do. I always wanted to see if I could find a credit counselor to give me some advice about how to go about fixing things. I’m not adverse to paying off my bills, but I couldn’t quite figure out how to do it. I thought I might be able to be pointed to some method of consolidating everything together, with a lower payment, and just one bill due a month. (I see now that that would still have been a disaster).

About this same time, a very good friend had been telling me about her family’s debt troubles and how one of her friends, who is a debt lawyer, was helping her family figure it out and turn her credit situation around. I thought to  myself, Hey! This is what I’ve been looking for! I called her up, made an apointment, and stopped in for a visit. That’s when it got scary, fast.

 The whole meeting was about which bankruptcy I qualified for. I had just gotten promoted to being a manager, with a relatively large jump in salary. Along with that came required longer hours, and a lot more overtime, as I stayed late to close the building several nights a week and picked up extra shifts as much as I could. I was making a lot more than I had been. Apparently I may have been making too much – I would probably fall into the chapter 13 bankruptcy income bracket. If you make over a certain amount, then you can’t just wipe the slate clean like with chapter 7, you have to be put on a mandated budget, pay a percentage of all your debts and be on this program for 5 years. It was horrifying and a serious wake-up call to what bad shape I was in. I mean I knew it, but I didn’t really KNOW it, at least until that point.

I didn’t feel like there was anything else offered to me. Maybe that’s what most people want to hear and that’s what she was offering. Either way, I said ok, let’s do it, and left with a hefty pile of paperwork to fill out. Oh, and a really heavy feeling in my stomach.

I was scared enough to immediately start assembling all my information together, as needed, for the paperwork. The first step in the process was to pre-qualify for bankruptcy. I had to prove my income, see which chapter I fell into, 7 or 13, then go through some on-line counseling session to prove I was ready for it (I think that’s what the process is; I didn’t actually go through it, as I’ll get to shortly, but that’s what some of the details I remember from my meeting).

So I began getting my debt house into order. I found all my bank statements, my pay stubs, you name it. I started figuring out how I spent and on what in the last several months. The previous 4 months of budget history was really enlightening. I was spending like crazy, with no rhyme or reason. I was oblivious to my bank account balance, with the resulting overdraft fees coming as no surprise to anyone who has been there. Overall, it was really dismal.

It was at this same time, feeling terrified and sick to my stomach, that I thought there’s no way, what does bankruptcy really mean? Is it really “no big deal” like our culture makes it out to be? So I thought I should do my homework. I turned to the internet and started looking for bankrupty information. I wanted to see people’s stories of who had been through it, how it went, how difficult it was, and what the ramifications of it all were. I found a few blogs, but nothing that really was what I was looking for. Instead, I found all these websites about personal finance and getting out of debt, on one’s own.

Wow. Maybe all of you reading this can understand what an amazing concept that was to me. I didn’t really have anyone to talk to about this. I briefly mentioned it to my boyfriend, but never to my family. I have never even really gone into depth with my friends. So to see a community of people struggling (successfully) with it, and telling their stories, their innermost feelings about it, and even HOW to do it, well, it was really inspiring. I got hooked. I started reading blogs day and night and saw that it was possible to do this myself.

I never did get my questions about bankruptcy answered to the degree I wanted, but I decided not to pursue it after all. I decided to do it myself. By mid-October I had put my first budget together. I continued to read blogs all the time. Then in early November I decided to start my own blog. I figured, what the heck, I was infatuated with the subject, and maybe it would help me stay focused on it, longer.

The rest is public history. You can read my progress yourself.

The things that have changed is that I feel knowledgeable and finally in control of the process. I know there’s a light at the end of the tunnel and I am confident I’ll reach it. It will take a few years, but I can do it, and I’m satisfied knowing the journey will be a success.

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2 Comments

  1. mike said,

    Thanks for sharing that. It was great to hear your story and I can really identify with your situation. I am a photographer also. I have been in the business for 25 years and have had great times when I was able to get out of debt and bad times where the debt has piled up. I have a couple ideas for you. For Photoshop you can get a copy on ebay
    Photoshop cs or cs2 are fine for most things. GIMP is a free version that does a lot that Photoshop does.
    I have a 15 years with Photoshop so if you have questions please feel free to contact me. I have had severals shows myself but used them more promote my commercial work.
    I wish I had gotten on the “getting out of debt” band wagon a lot sooner but am glad to be worjing on it now.
    As to how you got all the debt from the business originally I don’t quite get why you had to pay half the inventory if he was the one supplying the finance. It seems like that is a point I would address and look into more.

  2. debtmaven said,

    Mike, thanks for your comments. I just started shopping for CS3 online and see that I can get a cheap version now that 4 is about to come out (or I can use my bf’s educational discount to get a edu copy). I have no questions on photoshop, but thanks, it’s a daunting program if you don’t use it regularly. On a side note, I do work trade for a local photo school, and sit in on someo f the photoshop classes while I TA the classes, so I am learning still!

    A note about the business – my partner bought and paid for everything in a foreign country (it was a very niche market of items from a third world country, he had the language and cultural skills to make deals with people overseas). He sent them to me, I did everything online, sold, mailed, received the money. We’d split the profit, but I’d also pay my part of the inventory costs at that time. When we settled up the business, I had to put in my share at that point, since I hadn’t been. It was definitely more than fair that I owed it. Basically, my debt is a result of no job for a year, and a part time time for most of an additional year (I used all income to pay for living expenses rather than paying down the loans I received).

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