My Epic Journey Out of $30,000 of Debt

No matter how long you’ve been frugal, just about everyone wrestles with large bills and debts at some point in their lives. You’ll be going along fine and something blows you out of the water. Maybe it just wipes out the emergency fund, or maybe it does a whole lot more damage, leaving you in a deep dark hole that you slowly have to dig out of. It could be medical, legal, or some act of God that just cleans you out above and beyond anything you can prepare for. (I live in Tornado land, I’ve seen this first hand!)

In my case, I was hit with a string of huge life events over several years that made it feel like I would never climb my way back out of that hole. And let me tell you, the truth really is stranger than fiction. I could not make up the crazy stuff that’s happened to me in the past few years. If I can pay off $30,000 in medical, credit card and consumer debt, anyone can. Let me tell you my story.

I’ve been frugal for most of my adult life. In 2007, my world got shaken up for a while and just kept going. I got divorced after 17 years of marriage, most of which I spent as a stay at home mom. I had worked on and off, but had dedicated my life to raising my children. I found myself with no job, no support system and (regrettably) no lawyer. It didn’t help that I was also severely depressed after years of being told I couldn’t do or be anything beyond a simple housewife.

For a while, I actually believed that. It was a deep, very dark hole. And without anyone fighting for me or supporting me, I lost almost everything. My ex husband made six figures and wasn’t about to lose the house, the kids, or anything else. This was his home state, and he was surrounded by family and friends he’d known since childhood. I’d been isolated for years and had none of those luxuries. What he promised would be an “amicable” divorce, turned out to be a nightmare. But there is no such thing as an amicable divorce. In fact, they are all nightmares.

I had all of my health checkups and routine tests done because I knew I would lose my health insurance in the divorce. Two days after my divorce was finalized, my very first mammogram came back with a lump on it and I had to go in for biopsies and extra testing. It was frightening, but everything turned out to be ok. But that peace of mind cost me a chunk of change at a time when I had none. I tried to make the best of things, cramped into a tiny apartment and seeing the kids as often as I could.

Credit cards and a small amount of temporary alimony was the only way I survived as I searched for a job and went back to school. Eventually, I was able to start a career in IT making entree level pay (about $10-$15/hr), but now I also had a student loan payment for the next 15 years. For a while I worked two jobs and went to school. Any free time was spent with kids. Things got better, and I was able to find a nice little house to rent so I had more room when the boys were over. As soon as I moved and finally had some money, my ex husband took me to court for child support. This time I did hire a lawyer (more $$$). It  was a big, long, crazy costly mess.

Shortly after, I met my current husband, got engaged, had a baby and got married. In that order. And went on an unpaid maternity leave. We paid cash for everything we could, but of course there were more bills, especially medical ones. Somewhere in there, my oldest son came to live with me, graduated high school, went to college, and then later moved in and out a few times. All during which I was still trying to pay off credit cards, pay child support, and pay for daycare. I found myself drowning in bills despite my ninja frugal skills. Many, many times I had to choose between food and gas to get to work just so I could do it all again.

I had read and reread Dave Ramsey’s book, The Total Money Makeover many times and tried to implement his baby steps to climb out of debt. The problem was, it was hard to even get Step 1 done (save $1000 in a small emergency fund) because money was stretched so thin. A lot of that was credit card and medical debt. I tried negotiating with the credit card companies and the hospitals to get the payments lowered and give us more time.

That worked with varied results. The hospitals at the time were much better to work with than the credit card companies (I’m not sure that’s true any more). GE Money, which handled my Walmart card and my Paypal Plus card, were the worst. For some bizarre reason, the Walmart card side of things were great, but the PayPal Plus side was a NIGHTMARE. They would charge the wrong amount, go back on agreements, try all kinds of bizarre tricks. I documented every call  made over the course of a year and who I talked to. I could not get a straight answer navigating their nightmarish maze of automation and customer service reps.

Finally I decided to go with a local, reputable consumer counseling credit service (CCCS). The one in Peoria, IL had been around for over 40 years helping people get out of debt and they were wonderful. They were able to get all of my interest rates down (in some cases, to 0%) and together we came up with a reasonable five year debt management plan. All of my credit cards were closed, which was fine by me. I never wanted to see them again.

My family could breathe again, barely. Every time we thought we’d see a savings, such as lower daycare rates as the baby got older, the rates would get hiked, or gas and food prices would increase, but at least we could now keep up. Every month, I’d go in to make my payment and chat with the ladies in the office. They offered all kinds of programs to help people manage their money better and stay out of debt.

Over time, I got a few raises, my older kids grew up and left home, and my teenager came to live with me. No more child support, but plenty of challenges. When I could, I made extra payments to my debt management plan. Usually I’d throw part of our tax return or a raise towards it. Things were looking good. Then our rent was raised to a ridiculous amount, the water bill tripled and payroll taxes in Illinois went up by 66% overnight. Our lovely politicians had voted in the middle of the night to raise them while everyone was sleeping. Nice. Every gain seemed to be met with a setback, but the baby’s medical bills were finally paid off (using Christmas money, birthday money, tax refunds, and whatever else we could scrounge).

We were getting crowded in the small home we were renting, and it was definitely time to find our own place. There were some great programs for veterans being offered in Illinois, including a $10,000 grant for buying a home. CCCS also helped by giving me great references since I could show I was paying my bills off on time and had a great payment record. After a year of intense house shopping, we were able to buy a hundred year old farmhouse on five acres of land in a gorgeous part of the state. The entire process was a total nightmare, but with the help of family and friends, we got an amazing deal and moved in.

Strangely, our entire budget came out dead even. Owning a house on five acres + taxes cost the same as renting the flimsy two bedroom home we were squashed into before. We were on a well, which eliminated the water bill. Daycare was much cheaper, but I had to commute 125 miles a day (round trip), so the gas budget was more and I had less time at home. A garden helped with the food bills, and we even started raising chickens. I continued to throw what I could towards the debt management plan, which was still shrinking.

Shortly after, we found out there was another baby on the way. Through the pregnancy I commuted and tried to keep myself healthy. I had a normal delivery and was only in the hospital for 36 hours, but the bills came out to over $6000 after health insurance paid their part. Crazy.

We managed to make our way through another unpaid maternity leave, and continued to keep everything paid. But there was no room at the daycare for the baby, so they would have to go back to the more expensive one near Peoria that we’d had our little boy in before. And now we’d be paying twice as much. I’d be hauling two tiny children over 60 miles each way every day, while nursing. I returned to work in November, dreading the bad weather I knew we’d all be driving in and wondering how we’d be able to afford Christmas at all.

Then a tornado hit Washington, Illinois and wiped out a good part of the town. All the windows of our daycare’s infant room were smashed out. The tiny apartment I had rented during the divorce was completely destroyed. The whole town looked like a war zone! Thankfully, this was on a Sunday, casualties were low. One man died, which was still very unfortunate, but it could’ve been so much worse. The tornado had literally gone between two churches full of people during worship service. Insane.

This meant I had no daycare for the kids for a while. We made emergency plans to put them in the small, more affordable one close to our new home, and that arrangement stuck. It was about half of what we’d been paying in Washington. With the savings, I was able to pay off the debt management plan completely in four years instead of five. More breathing room!

We were still dealing with the baby’s medical bills and the hospitals were incredibly aggressive this time around. I didn’t know where I’d come up with $6000 to pay them off. I was still commuting 125 miles a day through crazy winter weather, still nursing, and so exhausted I nearly crashed a few times. After a couple of very close calls in the same day, I knew it was time to find a new job. I had been looking on and off for a while, and finally found one close by. I would have to take a big pay cut, which came out to exactly what I was paying in gas to commute so far. I figured I had really taken that pay cut when I moved.

So I changed jobs and changed industries in the middle of winter. I had a new office and a shorter drive, and lots to learn. Two weeks later, my car broke down and ate up our entire 2014 tax return. We had record cold weather that year, and my husband could not get outside to work on the car. He’s a master auto mechanic and has the skills, but we had a tiny one car garage full of stuff and no place but outside to do repairs.

The hospitals were now threatening to sue over the medical bills, even though the baby was only 6 months old. I decided to cash out my 401k from my last job and pay it off. I didn’t have much in there. I had stopped contributing years before when I had started paying child support. So the money was what the company had put in for me. 3% of my salary for several years. After paying taxes on it, it was enough to cover the medical bills and refill our emergency fund. So we did it, and finally found ourselves completely clear of all of our debt except my student loan and our mortgage.

Seven years of craziness. We accomplished a lot in that time, and had some really awful setbacks. Some were our own fault, some were caused by others, some were random acts of God. I tell you this long, crazy story to show you that it IS possible to pay off huge amounts of debt even when the sky is literally falling. Not everyone would agree with some of the choices I’ve made. Looking back, I kick myself for some of them. But I did the best I could with what I had at the time. We can’t go back. We can only go forward. Maybe that’s a blessing in disguise.

Unfortunately, the sky is still falling. Kind of. My husband has been laid off twice in the past year. It’s always been our goal to survive on one income, and we’re almost there. Unemployment is helping for now, but will run out in November. Hopefully he’ll find something by then, but if not, we’re looking for other ways to get through it. We know we will. We always do. We do our best with what we have and keep on going.

Some Takeaways: 

Here are the things I’ve learned through this process:

1. Your debt does not define you. You are still you regardless of what’s in your bank account, or what isn’t. In fact, nothing you own or don’t own defines you. You define you.
2. Don’t let other people tell you what you are worth, or are not worth. Your worth comes from inside of you, and also from God. It doesn’t come from other people.
3. Keep going no matter what. Always keep the end game in mind and try not to get distracted or discouraged by the crazy things life throws at you. They are almost always temporary, though it may not feel like it at the time.
4. Tomorrow always comes, whether you want it to or not. Try to use your time wisely and meaningfully, especially with family.
5. Your kids will grow up so fast your head will spin. Treasure every moment you can with them.
6. Enjoy whatever season of your life you are in, no matter how hard it may seem right now. Look for the good.
7. Never give up. Never.