Declaring War on My Debt

At time of writing this post, I have three debts of $2,650 + Interest, and one debt in collections (which I will detail later in this post). This is a significant improvement from a couple of years ago where I owed nearly $40,000. Needless to say, I have declared war on the money I owe to banks, and other creditors and taking on my financial mistakes with a vengeance.

This however is not without sacrifice. I had to make some serious decisions in my life, and I am sure some people will disagree with my actions, but the ideal is to live meagerly now so I can have a better life later. Some people will want to get out of debt so they can buy a car or a house. I don’t see me having such options available to me. In reality, the idea of owning a place I can call my own is a fantasy rather than a dream. So why am I doing it? Well, first – it is the right thing to do. Second, when I seen a light at the end of the tunnel, I had to make $125 in minimum payments per month to be on good terms with the companies I deal with now. Considering that I live below the poverty line, this is a serious challenge that will never end unless I first fix my life, and second attack my debt with the ferocity it deserves.

So, what did I start doing? Well – first I started with the debt that is in collections. The one in question, the company says I owe $2100, whereas I only owe $800. Since they refused to fix their incompetency, I told them that I will deal with them when I take care of everyone else. If I was to make payments to them, they will have no reason to resolve their problem. I expect to save the $800 sometime in 2018 and will give them a call to see if they are willing to be reasonable. If not, we will both just have to accept the consequences of that choice they will make. Simply put, I will either owe and pay $800, or I will pay nothing.

Now, as for the student loan, I was able to qualify for Total Permanent Disability Loan Forgiveness. There are some conditions I have to agree too, and if I have earned income of more than $16,000/year in the next three years – I will have to pay the loan back. I receive about $9,000/year on SSI.

For a portion of 2016, I made improvements on my debt, and eventually decided to cut everything I could not justify, and reduce as much as possible. This is lifestyle I will have through 2017 while I am declaring my debt war. First, I chosen to eliminate anything that was not needed or important. I looked at my utilities, and did everything I can to reduce those. There are a number of evenings where my lights will remain off and will just watch videos in the dark. This along with CAP – my electric bill is $20. My Internet is $30. One time – Comcast tried to increase the bill. I called them immediately, and informed them they will need to bring it back to $30, or I may not be able to continue to have Internet. My home phone is $10 (with use of the Internet), and my cellular phone is $0 with the use of Lifeline. I receive $100 in food stamps, and this is my entire food budget. This is not enough to eat 3 meals a day. I decided to eat 1 meal a day every day until I take care of my mess. Since I have a dog, I make sure he has the dog food he needs, and I also make sure I have the medicine and bus fare I need.

I have a couple of bills in my name on the behalf of another person. I will not do that anymore in the future. So far, the current bills in my name on other’s behalf is paid on time (with some nagging), however I had other bills where the parties didn’t pay. This naturally hurt me, and therefore those people will not get any such help in the future even if I was financially sound. A few select people also borrowed money off of me, and chosen to not pay it back. From now on, when someone asks if they can borrow money, I will hear can they have money. So with me reducing my essentials, justifying the non-essentials, and stopping all of the money that was bleeding out, it was time to start my surgical strikes.

When I started 2017 – I had 4 debts in good standing + the one in collections mentioned earlier. After paying my essentials, and automatic recurring bills – I pay the minimum balance on my accounts in good standing. What money is left that hasn’t been allocated goes to my lowest balance debt. Earlier this month, the first of my debt in good standing has been terminated.

The date of me writing this post is 26th of February of 2017. On March 1, I will pay all of my bills, and the minimum balance of my 3 remaining debts. However, I will then strike my lowest balance debt again. I will expect another casualty as another debt will be killed off. The remaining two in good standing will not go down so easy.

If all works out to my favor, I will expect to eliminate debt 3 in June. In July, I should get a reinforcement reserve of $400. My dog will hopefully get to the vet office for an annual checkup, and vaccinations. I am hoping for this to cost $100. The remaining $300 from the cash I will receive as well as what I have been devoting to my debt will be targeted on my last debt. This last debt will be expected to be put to an end in October.

Once the last of my debt in good standing is dealt with, I will save the $800 to deal with the collections. When this money is saved (sometime in the first quarter of 2018), I will call the company and give them a final ultimatum. Either recognize the bil as $800 and send a new official debt notice for that amount. I will then send a money order and it will be paid. The second option is to continue to insist it is more than $800 and get nothing. With the attitude this collector has, I could care either way. Even if this last debt never gets killed off – it will be crippled. The collection agency already placed a derogatory mark on my credit score, and if they thought they could take me to court – they would have. There is nothing more they can do to me, and I will make sure they understand that. Now some might say – just pay the $2100. If I owe only $800, that is all I will pay.

Now, there will come a time I will be out of debt. When this happens, I can decide if I wish to add to my food budget, or have services I don’t need (such as entertainment). However, some practices will be continued. If someone was to ask me for money, I will only give if I can give it. If I would get it back, great. No more bills will be in my name. If the ones I have now were to be dismissed, they will not be reactivated. And for the future, if I should need something – I will take the money that was going to my debt and apply it to savings. However, since I am permanently disabled and not able to work. I only have SSI as my income. Their rules say if I have more than $2,000 – I could threaten my income. This will mean I will one day have to live less frugal. But if everything works out the way I am planning, 2018 will be a bit more better than the last few years were.

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