Couple Uses Credit Counseling and Rids Themselves of $92,000 in Debt!

October 17, 2011 | Posted By: Bobby Dee | Categorized in: Finance
It would seem like everybody is in debt now a days. From entire countries like the US, Italy and Greece, to your average American consumer on the street, everyone is overextended and looking for their “bail out”. Your average American is walking around with over $15,000 in credit card debt, but then there are the exceptions, like Jerry and Sue Bailey who had an unbelievable $92,000 in credit card debt.

What’s even more amazing about this story is that they managed to avoid bankruptcy, take total control and accountability for their debts and eliminated the amount they owed. This didn’t happen overnight, it took a lot of hard work and determination, but in 5 1/2 years they managed to eliminate all the debt and credit cards from their lives.

This massive turnaround earned them recognition from the largest non-profit, credit counseling accreditation organization in the US, the NFCC (National Foundation of Credit Counselors). They were awarded the Client of the Year Award, the NFCC made their announcement at their annual conference in San Francisco.

$92,000 in Debt Doesn’t Disappear Overnight

Mr. Jerry Bailey, an associate pastor at Grace Church in Jackson, MI, managed to keep the elephant in the closet for over 10 years. From 1992 to 2005 the credit card debt managed to mount up as a series of unexpected expenses, two daughter’s weddings and an unanticipated leaky roof that needed immediate repair which all went on the credit card.

"We got caught up with 'More is better' and 'how much is enough'," says Jerry Bailey. He managed to keep the financial woes under wraps, and from his family, his wife Sue had no idea of their monetary predicament but then came the phone calls.

"My first clue was when the people started calling our house," Sue Bailey says. "My husband is very loving and very protective, to a fault sometimes." The final straw was when Jerry was forced to put his daughter’s wedding reception on the credit card, and they finally decided to tally up the total damage of their credit card charges for the past 13 years and came up with a staggering $92,000.

Don’t Answer That Phone; Don’t Open That Mailbox

The creditors were relentless and they never stopped calling. The Bailey’s mailbox was chock full of bills, and credit card statements. Nobody in their home answered the phone without first checking the caller ID, and if the phone call was from a creditor they would forward it straight to voice mail. Walking to the mailbox was a source of anxiety and stress because they knew what awaited them, a pile of credit card bills.

In 2005 they reached out to their credit union for some guidance, they had a little over $92,000 in credit card debt spread over 17 accounts. The banker looked at their dire financial situation, shrugged his shoulders and recommended that they file bankruptcy. This went against the Bailey’s principals and were firm believers that paying what they owed was the right thing to do. When they affirmed that bankruptcy would not be an option for them, the banker gave them a number for a non-profit credit counseling agency that was based out of Michigan in hopes that they could offer viable alternatives to bankruptcy.

Non-profit credit counseling agencies have been around for over fifty years; spreading financial literacy and helping consumers manage their credit card debt. They also are experts at the art of negotiating with creditors, and use a DMP (debt management plan) as a tool to lower interest rates, waive fees and eliminate the overall debt load for their clients. This is not “debt settlement”, which is completely different process all together, which can end up hurting consumers in the long run. Credit counseling and the DMP, for most people, is simply the most effective way to eliminate debt with little or no impact on your overall credit score.

The Bailey’s problems didn’t disappear overnight, it took a lot of hard work, determination, commitment and 5 ˝ years to finally rid themselves of their credit card debt. Today the Bailey’s are enjoying their debt free life, gone are the days of avoiding phone calls and their mail box. Now the Bailey’s can completely understand the importance of savings and setting up some sort of financial safety net for rainy days.

The NFCC recently released a poll that stated that only 35% of Americans had a $1,000 emergency expense account, so there are many consumers out there that are living paycheck-to-paycheck, or even worse, depending on their credit cards to cover their expenses.

Of course the Baileys’ wish that they could of avoided their financial disaster in the first place. “We'd tear up the credit cards," Sue Bailey says. The main thing that they learned from this entire financial fiasco was the importance of a savings account. 20/20 hindsight tells them that if they would have saved a little money month-to-month they could of avoided having to depend on their credit cards.

Ridding yourself of nearly a six-figure credit card debt is not an easy feat, but with a little determination and help from a free debt counseling organization may help you on your journey towards financial freedom and peace.

Bobby Dee is a personal finance blogger and works for one of the top Christian debt relief organizations in the country whose credit counselors have been helping consumers for over 20 years.
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