In 2012, I made one of the hardest decisions of my life. After almost 20 years of marriage, things were just not where they needed to be and I asked my husband for a divorce.
I had many personal reasons for doing this which I will not go into here, but it was the right decision and I have never once regretted it. However in the months after he left our home, the divorce was heading to court and decisions were being made about the custody of my kids, some very disturbing things began coming to light.
How We Got There
My husband had never been good with money and some of his personal habits had put us into debt which I was already aware of, but what I was not aware of at the time I asked for the divorce was that he would wipe out our checking and savings accounts, take cash advances on all of our joint credit cards and take a loan out in my name.
At first in my naivety I thought for sure the court would require him to pay me back every dime and rectify what he had done. However as the court process continued, it became clear to me that things would not play out that way and they would be holding us both 50/50 responsible for the debt. While I was not at all happy with this outcome, I figured at least I only had to figure out a way to pay off 50% of what was owed instead of the whole thing.
As the months went on I began doing my best to make payments where I could and when I could, but after talking to several of our creditors I was told he was not doing the same. I talked to my lawyer and everyone I could and became more and more frustrated with the fact that despite a judgement saying he had to pay for 1/2, he was not going to do so and since my name was on everything too, whether he paid or not, I would be held responsible. Unless I wanted to spend more money to take him back to court and get yet another piece of paper to say he had to pay his share, there was nothing I could do.
The Breaking Point
At this point I felt pretty lost. The creditors were demanding more money to cover his side of the things and the stress was piling on and then as if things could not get any worse, the company I was currently working for decided to let go of all of their work from home staff and I got 2 days notice that I was out of a job. I got to work trying to find another job right away and in the meantime met with a financial adviser to see if they could help me find the best way to get myself out the situation I was in. I met with one and then another and both told me the same thing. The only thing they could see me doing that made sense was to file for bankruptcy.
I went home that night and at 2 am in the morning sat on the floor in my living room surrounding by all of my bills and cried. I cried hard and I cried long and when it was all over I had made a decision. I refused to file for bankruptcy. I refused to let the man who had already taken so much of my life take another 10 years from me in bad credit. It was time to come up with a plan.
Now before, I get into how I actually paid off the debt, there is no secret formula and no magic pill. It took a ton of hard work and a lot of sacrifice, but the end result was incredibly worth it and I am so glad I did it. In 5 years I paid off 37K in debt and raised my credit score 175 points. How did I do it? Goals. Lots of little goals.
The Start of a Plan
That night after crying myself silly, I sat down and started on a plan. The first part of plan was to get a better perspective on where I was at. I grabbed an old empty notebook and got to work.
First I sat down and wrote out all of my regular monthly bills. My house payment, my car payment, car insurance and utilities, groceries and gas. This was everything I needed to get through the month.
Then in that same notebook I wrote down every single debt owed starting with the largest and going down to the smallest.
At first looking at everything I owed it felt completely overwhelming. How on earth was I going to pay all of this off by myself? The interest alone was adding on every month. It felt impossible but I was not ready to give up yet. I knew if I could figure out how to do it there would be no stopping me.
The Budget
The first thing I did was started with my budget. I needed to see how I could save more money and spend less each month. I looked at all of the ways we could cut back and lower our monthly budget. I called utilities and got on budget billing, I spoke with my cable and cell phone company and got my bills lowered down and even found ways to save money on groceries and gas. In the end I was able to cut about $300 out of my monthly budget which did not seem like much, but would go a long way towards my end goal of paying everything off.
The Debt
Next I spend a whole day calling every single debtor we owed. I knew if I could explain my situation and that I ultimately wanted to pay them back instead of just writing them off with bankruptcy that they would be willing to work with me. It took more convincing with some, but in the end I was able to get several to agree to stop adding interest, stop adding on late fees, lower interest rates and even a few that cut me a deal if I got the debt paid off in a certain amount of time or was wiling to agree to a specific monthly payment. I was very honest with them and never promised more than I knew I could pay.
Getting to Work
Next I put all of my efforts into finding jobs. Yes I said jobs, plural. Being a single mom with one child on the spectrum I knew I needed work that would be flexible and since I had been working from home for the last 5 years or so, I really wanted to find more work in that arena so I applied for every work from home job I could find. It took me about 3 months in all, but by the end of those 3 months I was working anywhere between 6 and 10 part time jobs some with as little as a few hours a week with others as much as 20-30 hours a week.
To Be Continued….
And this is where the real work began! In part two I will discuss how I set goals and what I did to pay off the debt and get where I am today. Financially free!
