Before I explain exactly what I did and how you might be able to use my techniques to

Get Out Of Credit Card Hell Without Declaring Bankruptcy

let me backtrack just a bit and tell you who I am and how I managed to dig the hole so deep.  It wasn't by being a spendthrift.  It was a combination of very bad luck and stupidity.

Let's do the bad luck first:

We're talking about very nasty stuff here, including a totalled truck (just a week after we paid it off), a failed private adoption (that means we had to give our son back to his biological mother and pay the bills anyway), unexpected out-of-pocket medical expenses ($9,900 in 1994 and $10,450 in 1995), and some pretty ugly setbacks in our medical transcription business (the kind that hurt the most.... same work, less money).  

Now I suppose you want to hear the stupidity part??

Well, it was nothing really.  It had to do with scams and some really dumb ventures into the world of "business opportunities."

I hated my transcription service with a passion and wanted out.  My first daughter's childhood was squeezed in between deadlines; 17 years later I was lucky enough to get a second chance, and I was determined that my second daughter's life wouldn't be the same.

Since I'm the entrepreneur in the family and the transcription business was our only source of income, it was up to me to find a way to replace it.   So I set off to do just that.  (If you're wondering, my husband works in the business with me; he's not a deadbeat.)

I started getting involved in multilevel marketing programs, watching infomercials, and going to "work-at-home seminars." (I already had a reasonably successful home-based business, so it shouldn't be any big deal to start another one, right?)

BWAHAHAHAHAHAHAHAHAHA!!

When all was said and done and I added up all the little losses.... $1,000 here, $50 there, $8,500 somewhere else.... they came to $30,000.

The end result of all this?....  

Exactly $56,630.09 in the hole, with (1) a family to support, including a beautiful but very expensive teenager and two babies, and (2) a medical transcription business netting $50,000 a year before taxes.  

I say "I" and "my" because I dug the hole in secret.  My family never knew the extent of the damage until it was too late (picture their shock when they read it on the internet).  

I unwittingly (or dimwittedly?) took them down with me because I really believed that if I worked harder, I could salvage the situation.  (I forgot to take into account that there are only 22 waking hours in the day.)

So what do you do when you're in the midst of something this gruesome and your family has no idea how bad it really is and you can't tell them?

Well I don't know what other people do, but I looked in the yellow pages and made an appointment for a "half-hour free consultation" with a lawyer.

Two lawyers actually, because I didn't like what the first one had to say (and I didn't like him).

But on one thing they were in agreement:

I had to bail out.  I had no choice.  That's what the law was written for, after all.... to give me a fresh start.

So with a healthy sense of entitlement, I would have done just that, screaming, "Hey, it wasn't my fault!" all the way to bankruptcy court.

But I didn't want to walk away from my debt.

Neither do you, or you wouldn't have bought this book.  You would have called one of those T.V. lawyers and gotten on with your life.

And that's what makes us different.

To millions of people, bankruptcy is no big deal.  They have no problem walking away from their debt.  In fact, for some it's a way of life.... every seven years like clockwork.

But not for us.

We may be Rotten Money Managers, but we're Responsible Rotten Money Managers, dammit!!

I couldn't walk away because I knew this whole mess really WAS my fault.  

Lots and lots of people survive a run of bad luck without bleeding the family dry and trying to match the National Debt.  We all make choices in life, and I made the wrong choices.  And because this was all behind my family's back, the guilt was terrible.

Life was going downhill fast.

The phone was ringing off the hook.  

I wasn't destitute, so I sent payments to the scariest people.... the ones who sounded the meanest.  

But I couldn't begin to keep up, so I finally quit answering the phone.  I was always "out." When a client sent a check and I could get a few collectors off my back for a couple of weeks, I miraculously reappeared.

I sent a payment here and a payment there, thinking if I could just hang on a little longer and work a little harder....

But I'm getting ahead of myself again.  

Let me tell you about that blustery day (before the lawyers) when Reality came to call:

I was working (what else would I be doing?) when my husband burst into the office, looking a little deranged and gasping something like, "Holy crap, Les!! The IRS is at the door!!!"

I'm a fast thinker, so I managed to regroup just seconds before the main artery in my brain exploded.

I opened the door a crack and stuck my head out.  In my most charming tone with a little comedy thrown in just in case the IRS had a sense of humor (remember "Do you have any Grey Poupon"?), I crooned,

"Hellooooooo.  I don't suppose I could ask you to return at a more con-veee-nient time?"

"No, ma'am, I'm afraid not."

I figured as much.

So I continued to smile stupidly while I sized up the situation:

Okay, he hasn't got a gun.  That's a good sign.  But if he has to come back he probably will.  And he probably won't be calling me "ma'am."

I decided to let him in.

It turned out to be one of my better days, but let's start at the bottom and work our way up:

It seemed I was several thousand dollars behind in payroll taxes.

(It seemed? BWAHAHAHAHA!!! I already knew that, of course, but since I couldn't pay, I saw no point in working myself into a froth.  It was only the government, after all.)

Somehow I managed to remain upright through the entire conversation, and we worked out a perfectly decent payment schedule.  

What a relief that was!.... as long as I didn't allow myself to think about the fact that I wouldn't be able to pay any other bills at all for the next few months.  And making any credit card payments was, of course, out of the question unless we wanted to trade our house for a shopping cart.

But I wasn't about to let him know that, so I squeaked, "No problem."

Then I signed my life away.

Now I'm sure you've heard your share of IRS horror stories, right?

Well in the form of Mr. Garcia, the IRS isn't half as mean as it's cracked up to be.

After the dirty work was done and we determined that I would not be going to federal prison after all, his friendly side emerged.  He stayed and talked for over an hour.

The first thing he did was put things in perspective for me.  In a nutshell, this is what he said:

(And I hate to be the bearer of bad news, but it's one of those things people like us have to face eventually: You already have a bad credit*rating, and it's only going to get worse if you keep doing what you're doing.  Even if you're still paying bills on time, drowning in debt is a big black splotch on your credit report.)

Then we started talking about numbers, and for the first time, I took a long hard look at what was really happening.

Until that very moment, I had lived with the illusion that I was climbing OUT of the hole just a tiny bit every time a made a payment.

In reality, I was being buried alive:

The payments I was making didn't cover interest and fees, much less make a dent in the principal.  Here are some rough estimates:

The interest alone amounted to well over

$900 per month

And of course I was never able to make a payment on time.  At $25 a pop, late charges came to

$250 per month

And I never intentionally went over my credit limit, but interest and late charges blew the cork right off the bottle.  At an average of $15, "over-limit charges" totalled at least

$150 per month

So here I was, 45 years old, owing more money than my whole family earned in a year.... and still clinging to the belief that I would be able to save us from disaster.

Yeah, right.  

By the end of the month, I would owe another $1,300!!

If you don't owe $50,000 and you can't relate to those numbers, try these:

If you put a lovely $2,000 bedroom suite on your credit card at a typical interest rate (let's say 19.8 percent), and you faithfully make the minimum payment each month, it will only take 30 years to pay it off.

And the interest will only amount to three or four times the value of the furniture.... NEW.

And when the little ones come to spend the night with Grandma and Grandpa 25 years from now, you can tuck them in and tippy-toe back to your own bed, secure in the knowledge that in just five short years it will be paid off and you can afford to quit sleeping on bare springs before you turn 90.

I saw the light.

Now I had to figure out what to do.

I was dead set against bankruptcy.  Only bums declare bankruptcy, and I was definitely NOT a bum.  Stupid maybe, but not a bum. 

(I've got to tell you, my attitude about this has changed somewhat since my experience.  With perseverance and a little luck, I made it.  All my creditors caved in.  If they had NOT, I might still have been forced into bankruptcy, so I understand now that there are two categories of bankrupt people.... the honest ones who make stupid choices and get themselves into serious trouble ONCE, and the dishonest ones who declare bankruptcy every seven years and purposely dig a fresh hole in between because they know they won't have to pay for the stuff.)

I knew free consumer credit counseling was available and that they would be able to make the collectors go away and set up payment arrangements.  But letting a stranger handle our family's money wasn't an option for me.  (I have a few "authority issues" to deal with, and I could never have survived that kind of intrusion).

And realistically, knew I would never be able to keep up the payments and would end up filing bankruptcy anyway.

Things had just gone too far for that.

So this not-so-scary IRS agent told me what he always advised his family members who found themselves in this situation.  I took it to heart, and I got started the very next day.

And one more thing:

By the time he left, I felt better about myself than I had in months.  I finally realized that the vast majority of people in my shoes would have walked away long ago, but I was struggling to do the right thing, just like you are....

And that little boost to my shattered self-esteem gave me the guts to do what needed to be done.

Now before we actually get into "The Plan," it's important that you understand where I'm coming from:

I am not a financial advisor or a credit counselor.  What I know about the law you can write on the back of a postage stamp.  

I am about to lay out for you, step by step, what worked for me.  I had a great deal of family support, both emotional and financial (after I finally confessed).  If you don't, and Plan A isn't feasible, I'll explain, step by step, how to implement Plan B, which I would have done had Plan A not worked out.

I make no guarantee that going through with either of these plans will work for you, nor am I suggesting that it is in your best interest to do so.

But it worked for me.

And it saved my family.

End of snippet.

I can't believe how much better life is now.  I didn't realize how horrible the stress was until it was gone! 

There are 10 dings on my credit, but that's a big "Oh Well."   I mean, who cares?  It's not like they weren't there before, when my payments were late all the time.  And 10 little dings are a lot better than the one big ding of bankruptcy, as far as I'm concerned. 

(How many applications have you ever filled out that ask, "Do you have any little dings on your credit?" or "Have you ever forced a creditor to settle for less than the full amount owed?"  Not too often, at least I haven't.  But I'm sure you've seen that dreaded, "Have you ever declared bankruptcy?" question more times than you can count, am I right?)

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