Nonprofit Organizations Offer Credit-Counseling Programs
Tompor, Susan, Tribune-Review/Pittsburgh Tribune-Review
Susan Bailey saw some signs that she and her husband, Jerry, had some money troubles -- like once when she discovered that a credit card account had been closed when she tried to pay at a register.
She joked that her husband must have cut her off.
She knew things were far more worrisome after Jerry applied for a loan for home repairs at a credit union. He came home and told her that he was not only denied the loan but the loan officer said he should consider bankruptcy.
After that scare, the Jackson couple buckled down, closed more credit cards and worked with a credit counselor through GreenPath Debt Solutions for about five years to eventually get rid of their credit card debt. Even so, Susan, 59, didn't realize until it was all paid off that they once owed more than $90,000 on 17 credit cards.
"I never knew the extent of the debt -- ever," she said.
How does one build up that kind of credit card debt? And even more key, how does one get out?
Dawn and David Van Dyke built up $48,610 in credit card debt decorating a new house and buying gas and groceries.
"Maybe one month, we paid Visa, and the next month, we paid Discover," said Dawn Van Dyke, 39, who lives in Buchanan, a short drive from the Michigan-Indiana border.
"I don't know what we were thinking; there was really no way to get caught up."
Sometimes, the only way out is bankruptcy or foreclosure.
Sometimes, other options sound even scarier.
Every credit card statement has a toll-free number for credit counselors. But the National Federation for Credit Counseling estimates that only about 150,000 people have called, even though the number has been on 500 million statements since February 2010.
For some, it might be worth making a call. Successful consumers say they've experienced quite a relief after dedicating typically three to five years to paying off their debts.
"I am not afraid to pick up the telephone now. I am not afraid to go to the mailbox," said Jerry Bailey, 61, who once had 17 credit cards but eventually paid off more than $92,000 in credit card debt.
GreenPath Debt Solutions, a Farmington Hills, Mich.-based nonprofit financial organization, named Bailey and his wife, Susan, and the Van Dykes as 2011 Clients of the Year.
How did they get out of debt? Jerry and Susan Bailey, who live in Jackson, paid $665 every week for about 5.5 years. Jerry Bailey, who is an associate pastor at Grace Church in Jackson, felt the couple had a moral obligation to avoid bankruptcy.
"We had to really do without during that period of time. It was a very humbling experience," he said. Bailey took on extra work doing weddings and funerals.
How did they get into trouble? Denial, paying for wedding receptions for two daughters with credit cards, buying gifts for a blended family of six children and seven grandchildren, losing income when Susan Bailey did not get as much work as a visiting nurse.
Another factor: Jerry Bailey was a widower before he met Susan, who was divorced. …