How to get out of debt and take back your life from

someone who’s been there!

Dear Friend,

The stress of mounting debt really getting to you?  Are you worried that you are cutting out fun things like going out to dinner, but your debt is still getting larger?  Do you have a knot in your stomach every time your mail gets delivered because the bills just keep coming?

Hey, I’ve been there.  I didn’t want to get into debt, but it happened.  The stress it caused really affected my life in a way I’d just as soon forget.  Getting out of debt was all I could think about, but how could I do it?

I’d like to share my experience with you in hopes that you can find the relief from debt that I did.

How I got into Debt

How did I get into debt?  Through divorce.  I had the house and the two kids, and 90% of the bills I had before the divorce with 50% of the income.  How did you get into debt?  Well, divorce, health issues, death of a spouse, job loss, flood, hurricane; many ways that are out of your control.

I had to realize how I got into debt before getting out of debt was possible.  Does any of this sound familiar to you:  The bills are coming in and you find that you can cover most of the ones you have to pay but pay a little less on the credit cards.  That’s what I did.

You see the credit card balance growing so you start to cut out thing like going on vacation, going out to dinner, getting nice gifts for your family.  But, the interest rate is so high on the cards that paying the minimum doesn’t help much.  Then, your car breaks and that expense goes on the card because you don’t have the cash.  It’s a vicious circle.

The Real Problem

I didn’t plan on getting into debt, but I had to recognize that my debt problem was really as cash flow problem.  I was spending more money than I was taking in.  I wasn’t spending foolishly, and had cut out most fun activities that cost money.  But through the divorce my income simply wasn’t large enough to cover all the costs of living.

What could I do? Could I increase my income?  Like most companies, the one I worked for handed out 2% raises, and I was lucky to get that.  Could I get a part time job?  With two kids under the age of three that was impossible.  I lost weight worrying about it.  I felt sick often.  There literally was a huge weight on my shoulders.

The Solution 

My solution to getting out of debt?  I had to restructure my debt to match my income.  I had to take high interest debt and make it low interest debt.  I had to take short term debt and make it long term debt.  I had to get those monthly payments to be below my monthly income.

The first thing I did was call the bank that held my mortgage.  Interest rates were down so I figured I’d refinance.  Well, the bank told me I wouldn’t qualify for a new mortgage because my income was too low!  I never missed a payment but hey, the bank’s formula said I didn’t qualify.  Sorry.  The bank said I couldn’t afford the house I lived in. Pass the Rolaids!

I needed help to restructure my debt.  But how?  Much to my surprise there are companies out there that can help.  There are companies that know bad things happen to good people and that a personal bankruptcy can be avoided.

I found several companies that took into account the fact that my credit rating was still decent.  I talked with two of them and took the best deal I could get. I was able to get a new mortgage!  I had to get a 30 year mortgage (I had 15 years left on my old one) to roll my credit card debt into my new mortgage.  But the interest rate was low and the reduction in total monthly payments gave me some breathing room.

I now made more every month than I owed with some margin for problems like a broken car.  I’m not living the high life, but getting out of my debt problem is such a huge relief I feel like I’m living like a king!

Now, a few years later my income has improved and I’m paying down my only debt, my mortgage.  I’m living again.

If you have debts, get some advise from pros.  They can present options that you probably haven’t thought of.  For most people there is a way out.

Do yourself a favor, and take the time to read the information on this site.  It will help you determine your options and what is best for you.  You’ll be relieved you did!

Scott Peters