How Anybody Can Go From $50,000 In Debt To Being Back In Black

For many people, the story of their debt is a little bit like the parable of the frog being slowly boiled in water. People, like the frog, only realize there’s a problem when the damage is already done. Before long, they’re neck-high in debt and think that they have no prospect of paying it off.

This is the situation that Lisa Curls found herself facing towards the end of 2004. She and her husband had lived together for many years, and they were just a couple of days away from celebrating the birthday of their three-year-old son. Lisa had the party planned and all the kids invited, but just two days before the birthday, her husband left her. Without a second income and a child to look after, Lisa’s financial situation began to deteriorate.

According to Martin Long, former Trustee for the U.S. Bankruptcy Court, Lisa’s situation is all too common. People get into trouble financially after divorce, especially if their finances are dependent on another person to provide a source of income. Then, like Lisa, they spiral into a cycle of debt and depression with bills mounting up, but no ability to deal with them.

Lisa said that her ex-husband’s attitude towards money was bad. She had debts for everything, including overdrafts on her personal account, a business overdraft of over $2,000, store credit card loans and various other loans from different companies, which when added together came to more than $50,000. What was worse, Lisa was told by her divorce lawyer that none of her personal debts could be transferred over to her ex.

Lisa, therefore, developed a plan to clear her debts over the next four years. Here are some of the things that helped her clear her massive pile of debt.

Ask Questions Before Buying

Thanks to the bad money habits that she and her husband had gotten into, Lisa wasn’t used to reining in her spending. She would head to the mall on a Saturday and just take anything she liked the look of. This resulted in enormous debts on her store and credit cards which drove her to the brink of suicide.

Since then, her attitude has changed. She always asks herself whether she really needs something before buying it. If she likes a pair of shoes but has some in her closet already that will do the job, she’ll just walk straight by.

Consolidate The Debt

Lisa also ran into another problem when she tried to clear her debts. Her debts needed to be repaid during the height of the financial crisis. Back then, companies were passing debt instruments between each other, trading securities and so on. As a result, Lisa found multiple companies ringing her up, asking her to pay them back the same sums of money. In total, five companies claimed that she owed them the money for her bank overdraft.

Live Within Your Means

Lisa said that she found being in debt frightening. She suggests that everybody lives within their means, otherwise they could risk it all. Doing this, she managed to pay back the money she owed and moved on with her life.