A Story of Hope
I have written once before and was received graciously by you. Thank you for being a source of grace.
For about four years now, I have been a regular reader at fourwinds. You have made a difference for me. The story below is one I began writing in August of 2008 as I faced the consequences of debt based living.
I realize that my story is long and that I am asking for much of your time. I hope you find it worth your time to read this story. I hope you agree that it is a story of hope and that it may help to empower others to have different feelings about their own life and choices.
I have chosen freedom, knowing there are both gifts and its prices. It is my intention to be gracious whether I am experiencing a gift or a price.
Thank you for all that you do. Thank you for planting a seed from which prosperity has grown. The light shines a bit brighter over here now.
Wishing you well,
ah
Debt Based Living
So, I read a story about a possibility for prosperity. It said that everyone would be forgiven $300,000 worth of debt. That would mean I would be debt free. What an amazing feeling.
I could open the door in the morning knowing that I was living within my means. Working one full day and two mornings a week, I can support my life. A life that includes going to school, volunteering in work useful to others that I find satisfying, time to hike, time to ride my bicycle, lots of time to be still with my own thoughts and feelings
When I first started out, I had no debt. In 1973, I graduated college and began a corporate job with a weekly paycheck. It was easy to fall into a groove. That first year when I filled out my 1040 tax forms, I had no deductions so I paid full taxes.
Home loan interest was a deduction. So my new husband and I bought a house. It made good financial sense to pay interest rather than rent since interest was deductible. The more I paid in interest the less I paid in taxes.
Never mind what made sense for me or my husband or our relationship. A home in the suburbs replaced the apartment that was close to where we worked and played. And while we’re at the game of buying on credit to reduce tax liability, let’s buy new cars and anything else we can put on credit.
Inflation was high which meant that whatever was bought with today’s dollars was a bargain compared with what the same item would cost in the future. Never mind our needs, our decisions were based upon greatest economic value.
Thus began a life time of being in debt. A slave to the paycheck that was already spent before it was received. Oh, there were moments when the debt bothered me. Then I would spend only on necessities and become obsessed with zero balances.
When my marriage ended, I paid everything off and made a commitment to stay out of debt. That worked for a while. And then things changed.
When I made that commitment, I worked in the corporate world and generated income far in excess of my needs and desires. After my son moved out, I quit that job for which I had no passion and left the corporate world that had no heart. I freelanced as a computer programmer, working fewer hours and looked for something that felt worth doing. I had no debt.
A door opened in an unexpected direction. I became fascinated with acupuncture. Within a few weeks, I was on the road checking out schools of Chinese medicine. Within a few months, I had been accepted at the school of my choice in Santa Cruz, California.
I cashed out my life insurance policy, sold my house and gave away rooms full of furniture. What I could not part with I packed in tidy new boxes, all the same size, easy to handle and store. I moved to a heavenly forest near the ocean and near to school.
I thought I had enough cash to make it through the four year program. After a year, I had spent well over half of my savings. Even working part time, I began to prop myself up with the huge lines of credit remaining from the old days as a corporate executive.
By the time I was ready to graduate at the end of 2005, I had over $60,000 of personal debt on those credit lines. Through the magic of student loans, I was able to shift the load of debt to a new source which freed up my credit lines for the task of supporting me while I built a private health care practice.
A year of debt based living added back on to my personal unsecured debt. For the next 18 months, I generated income sufficient to support my life yet not quite enough to fully service the mountain of debt. I acquired more debt to service the existing debt.
Credit card companies made it much more difficult, too. Where interest rates had ranged from 8 to 12 percent when I acquired the debt, the lenders moved quickly to double those rates, with some tripling and more. In a few months, the interest on my credit card debt became twice what I paid in rent each month.
And my student loan was still in deferral, piling up interest charges that added to the principal. In this moment, the monthly payment would be almost three times what I pay in rent and would continue for at least 20 years.
As long as I take 6 units at the local junior college, I can keep the massive debt of the student loan in deferral. That’s about $200 a semester in tuition and books plus 6 hours a week in class and another 6 to 12 hours a week on homework and studying.
This is actually a blessing, allowing as it does for me to treat an excellent college as an intellectual smorgasbord. Unless I die during summer or winter breaks, there will be two classes that I get to start but not finish.
August of 2008 was a turning point for me. I did a spreadsheet and really looked at my financial reality. It was stunning. If I continued to service all that debt, I would be unable to pay the rent due in just three weeks. For me, the Day of Reckoning had arrived.
I phoned Freedom Debt Relief. Brian was very nice. While he could not actually do anything for me until my payments were in arrears, all I had to do to “qualify” was to stop making payments. “Stop making payments” was Brian’s first piece of advice.
Brian offered to look at my situation and make a tentative offer, pending my becoming delinquent. I faxed the most recent statements from each credit line. Turns out, Freedom Debt Relief could not bring debt servicing low enough for me to also pay rent.
Interesting. Now what? Bankruptcy?
In that moment, I was current in all my payments with the next one due in about two weeks. I thought about my situation all the time. What would be right? What would be fair? What would be possible?
I asked myself what it was that Freedom Debt Relief was doing for me that I could not do for myself. What is the service I was buying? Yes, buying.
For three years I would be paying Freedom Debt relief about 80% of what I had been paying to the banks just to service the debt on those credit lines. I was certain those banks would get little, if any, of what I paid. My guess was that Freedom Debt Relief would buy my debt for 20 cents on the dollar (most likely even less).
Freedom Debt Relief would be buying me as a client. If I paid them off, they would triple their investment in the three year payoff period. During that time, my credit score would make it very difficult to get new credit.
If I did not make the debt relief payments, their investment in me would become new “bad debt” to be written off and sold, the cycle repeating again and again.
I realized that what I would be buying was an “advocate” to plead my case of poverty, as well as someone else to receive any/all collection letters and calls. At the end of the contractual payoff to Freedom Debt Relief (three years), my credit score would somehow magically become good again.
Bottom line, I was buying a lie of a credit score and someone else to stand between me and the banks (or their representatives).
The first part is easy. Be it known to any and all, I am requesting a credit score of ZERO. Life works better for me when I operate on a cash basis. If I can’t afford it, I don’t buy it. I save for what I want. I actually want less. There is just no good reason for me to have credit.
The next part of the service I would be buying is to have someone receive those collection calls and letters. I don’t need someone to do that for me. Actually, no one needs to pay attention to that distraction. Those calls and letters are just words; hot air from employees quoting policy with no personal interest in a happy ending.
I had already tried to negotiate with some of those banks. Each time they raised their interest rates, I phoned to plead for mercy. They are not there to negotiate. They only open to that option when payments are missed. As long as I was current, there was not one bank willing to hear me.
Everything pointed to the same course of action. Stop making payments. First of all, I could then afford my lifestyle. I would be living within my means, which feels like a moral imperative glowing with truth and shining like a beacon from the days before 1967 when credit cards were invented.
I have no material assets. There is nothing to take from me. There is nothing to Lien on. There are no wages to garnish. No bank account. As is the case with fee for service providers, we agree beforehand exactly what each exchange will look like.
As long as I did not allow myself to be distracted by the calls and letters, the simplest course of action was to simply follow Brian’s advice and stop making payments.
After 6 weeks of not paying the banks, there were about 30 collection calls a day. I screened calls by caller id. My sole task was to delete messages.
The calls bothered me not at all. There was no element of surprise. And I already made the choice to no longer participate in the credit game. No action required. My job was to observe, to pay attention.
What I actually felt was amused. I felt safe. I was clear that I did not want to participate. I did not feel fear. I was not hiding. I made a choice to disconnect.
And the most predictable thing in the world happened. All of a sudden, they were paying attention to me.
Ah, so now you want to talk. Very predictable.
When I told them that their jump to 39% interest would soon result in my no longer being able to pay at all, they said to call back in six months. It amused me that in less than those six months they were phoning every day.
There is Stephanie at Discover that I almost wanted to speak with. She called every day leaving the exact same message. She wants to help me. Let’s work this out. Working this out means getting me to agree to send them money. I am no longer interested.
Is this fair? Doesn’t everyone else have to carry a slightly heavier load because I have abandoned paying the banks?
Even if that were true, which is logical but probably not true, still I stand by my choice. In every moment since September 1, 2008, I have been modeling living on a cash basis. I have been modeling living a credit based lifestyle (meaning cash) instead of a debt based lifestyle (confusingly called credit).
If I want to drive my car, I have to have cash to fill the gas tank. I have to already have done the work to earn the money to buy the gas. And I have to choose to spend the money on the fuel for my car. If that money is earmarked for rent, I cannot choose to spend it on gas.
Sometimes I wonder if I am the leading indicator for the universe; the accurate reflection of the results of debt based living. Within two weeks of my first missed payment, September 8, 2008 to be exact, the stock market crashed.
Oh, the media did not call it a crash, although financial wizards of integrity certainly did. Smoke and mirrors covered up the truth within a week. Which changes not at all the essential truth; the situation for United States of America was (and is) the same as my situation last August.
Debt based spending has the same results whether it is a person or a government.
Pyramid schemes fail when there are not enough new recruits for the base of the pyramid. When the birth rate drops, the pool of recruits drops. When confidence in the pyramid drops, some portion of the pool of recruits chooses to not participate.
While the crash was not reported as a crash, the effects of the crash were the same. The winter of 2008 was a season of fear. Loss and fear grew while hope and dreams shrank.
Loss and fear caused a drop in business for many service providers, me included. My services fell out of the budgets of some clients while others negotiated for lowered rates. New clients were a thing of the past.
By the end of 2008, my income level had fallen to the point that I was again facing insufficient funds to pay rent.
All that winter of 2008, I felt the urge to believe in scarcity. Consciously, I resisted that urge. I continued to believe in the truth of abundant supply. I know that the work I do has intrinsic value and that investing in my self is the best investment I can make.
January of 2009 was challenging. Somehow the funds to pay January’s rent appeared. I could not imagine where February’s rent would come from. At the end of January it would be my 54th birthday. Would I be celebrating … or would I be homeless?
I could not pay rent but I could buy brandy. Cold rainy days passed by unnumbered in a brandy-soaked haze. Internet video sites provided mindless distraction.
And then my son offered to help make my dreams come true. I was so embarrassed and overwhelmed by his offer, all I could do was thank him profusely and ask for some time to compose myself.
The advice from everyone was to let him help me. And so I did. My friends helped, too. One gave me clothing appropriate for business meetings. Another did my hair and makeup the day I went out to find work. Others told me where to go, who to meet, what to say. I walked out of that salon feeling loved and confident.
The first place I went was exactly the perfect place for everyone to win. The new clients I needed were right there, amazed that what they had been looking for simply walked through their door.
I was able to pay February’s rent and felt confident about the future. By Valentine’s Day, I had everything I needed to live within my means doing work that I love with plenty of time to pursue my passions and also give back to my community.
F.E.A.R. False Evidence Appearing Real. The truth is that we are divine beings having a human experience. We are as free as we believe we are.
To everyone that believed in me when I doubted my self, thank you. To my brother who listens through the brandy and the tears, thank you dear soul partner. To my son, my greatest teacher, you are the gratitude and joy that my tears are made of.
One Year Later …
September 1, 2009 I celebrated the anniversary of my choice for nonviolent nonparticipation. It has been an amazing year. I am happy with my choice. The gifts are amazing. So are the consequences.
Wishing you well,
ah