How My Family Stopped the Debt Cycle: We Paid off $35,000 in 4 years

At her worst moments, Kim Smith was suffocating from the chokehold $35,000 worth of credit card debt had on her household.

Sometimes, she broke out a spiral notebook, which documented the minimum payments for nine different credit cards with nine varying due dates. The bookkeeping alone was exhausting. The numbers were staggering.

“I learned hard lessons about how quickly things could get out of hand,’’ Smith said. “I didn’t know where to turn. I thought bankruptcy was going to be the result. I was about ready to throw in the towel.’’

Then Smith, a resident of Veazie, Maine, learned about InCharge Debt Solutions. She thinks it was through a Google search, where she randomly sought help.

Working with InCharge’s certified credit counselors, she found hope.

The mountain of debt peaked in 2013 at $35,000, but after four years in the InCharge Debt Management Program, she erased the last dollar of debt from nine credit cards.

4 Years to Pay off $35,000

“They said it would take 48 months and that turned out to be pretty accurate,’’ said Smith, 44, who works full time in a surgeon’s office, handling transcription and electronic medical records. “When I got to the end, I just wrote a $1,400 check — two month’s worth of payments — because I wanted to knock it out.

“When it got to zero and InCharge notified me that I had successfully completed the program, that was a thrill. I felt like I had accomplished something. I’ve seen how bad it can get. Now I’m determined to stay disciplined and not let this happen again.’’

Like most people who get overwhelmed financially, Smith questioned how it ever happened to her. She realized there were no easy answers.

Her intentions financially always were good, but she was never able to build a stable career and she wanted to provide things for her two children.

“In a way, I wish there was some exorbitant purchase to point to or some crazy things we never should have bought,’’ Smith said. “I wish I could say we all went to Hawaii on a whim. Maybe that would make it easier to explain.

“I feel like we’re decent with keeping a budget and living within our means for the most part, which is an ironic thing to say when you end up $35,000 in debt.’’

Smith said she was “blessed’’ to find InCharge and its counselors, who gave her the confidence to tackle her debt. In turn, Smith said she’s eager to use her experience for help and inspiration.

“When you’re deeply in debt, I think there’s a real shame-based component,’’ Smith said. “People feel embarrassed by it. They think others are saying, ‘Boy, they must have been really stupid to have gotten into that kind of debt.’

“I didn’t have one specific crisis that put me there. It was one small thing and one medium thing after another. The furnace broke. We needed the plumber. We needed the orthodontist for braces for my daughter’s teeth. I’m going to stand in the truth of it and not be ashamed. Thanks to the help of InCharge, we can now celebrate the fact that we overcame this.’’

Smith said her debt was set in motion by one factor.

“Looking back, if I had more money coming in full time, things would’ve been different,’’ she said. “I fell into a hole, a bad pattern, right from the beginning.’’

Smith received an English degree from the University of Maine, but never pursued a teaching certificate because she had married and had her first child at age 22.

Even in college, Smith said she began a habit of using credit cards to purchase things that she couldn’t necessarily afford. She remembers running up a $10,000 credit-card bill, then paying it off. The balance climbed back to $5,000 and again it was paid off.

But the pattern never stopped.

“I liken it to losing weight,’’ Smith said. “When you get on a diet or eat better or exercise and the weight comes off, you think the goal has been achieved. In reality, you never stop working on that goal. If you stop, the weight comes back.

“Things kept building and building. We’d get a better (credit) offer, then transfer that balance over. But the promotional rate would run out, we’d go to another card and then it was trouble.’’

Deeper in Debt After Divorce

Smith got a divorce and their debt was divided, but the spending didn’t stop. While she was raising her son Adam and daughter Emma, she kept bouncing from job to job. Like many single parents struggling with finances, she couldn’t catch a break.

“That has been the journey of my adult life, trying to find a career niche,’’ Smith said. “I’ve worked in customer service, real estate, transcription, you name it. I went back to graduate school and got a master’s degree in counseling. I did some counseling and teaching, but couldn’t find a fit there, either.

“I became a teacher at a community college and was having a lot of fun doing it. It was basically working full time at an adjunct professor rate, about $9,000 (per year), so I was still supplementing things with credit. When you don’t work for six months and you charge everything, it’s hard to overcome that.’’ Smith found unemployment and credit card debt to be a lethal situation that put her further and further behind.

Thirteen years ago, Smith was remarried to Ryan, a high-school teacher who she met at graduate school. Ryan brought no debt into the marriage.

“I handle the bills, but my husband was aware there was significant credit card debt,’’ Smith said. “I’d tell him, ‘Don’t worry about it, we have enough for the minimum.’ But ultimately, we needed to worry about it. We needed the help InCharge could provide.

“There were plenty of times when I wished I could do anything to make that $35,000 go away. I didn’t want to pay the price for my bad choices. It was hard, but we got it done and I’m proud that we did.’’

My Children Have Learned To Avoid Debt

Smith said she has learned a lesson. So have her children. Besides being debt free, one of the biggest benefits has been teaching her children how to avoid credit card debt.

“They saw the struggles and what it took to get out of debt,’’ Smith said.

Her son, Adam, is 21. He has an associate’s degree in Early Childhood and works at a school with pre-kindergartners.

“He has a car loan, but makes that payment,’’ Smith said. “He could have a big mountain of debt. He gets credit card offers every day, but just tears them up.’’

Her daughter, Emma, is 18. She has received a presidential scholarship (worth about $8,000 per year) to the University of Maine, which will cover most of the tuition. Living at home will make things easier, but she’s tempted to go in with friends and live in an apartment near campus.

“We’re in ‘negotiations’ over this,’’ Smith said with a laugh. “We want to be practical. She knows what that means.

“She has taken personal finance classes. I talk to her a lot about money. Her eyes are wide open and she knows that money isn’t magic. It’s a real thing. If you want more, you get up and go to work. Those are reminders we all need to have.’’

Overall, Smith said she has a “blessed family.’’

“There was never a time when we went hungry, never a time when we didn’t feel safe and warm in our home,’’ she said. “The credit cards served their purpose, I guess. We finally got them under control and I’m forever grateful to InCharge for helping us to go in the right direction.’’