The squeeze<\/p>\n
The obligations they had built their life around did not change. The mortgage came first, so during Ed\u2019s months without a salary, the utilities and groceries went onto the credit cards \u2014 missing a housing payment was not an option.<\/p>\n
Retirement contributions stopped. They also carried a few debts from their higher-income days and racked up more simply by living on credit. By the time Deb lost her job too, they were facing nearly $1,500 a month in debt payments.<\/p>\n
$230 on credit card 1 ($6,500 balance)
\n$160 on credit card 2 ($4,500 balance)
\n$85 on a store card ($2,500 balance)
\n$125 on a medical payment plan ($2,500 balance)
\n$200 on a buy-now-pay-later plan ($2,500 balance)
\n$175 on an auto loan ($2,500 balance)
\n$500 to Ed\u2019s brother ($10,000 balance)
\n$1,475 total monthly payments ($31,000 total balance)<\/p>\n
The debt repayments accounted for over a third of Ed\u2019s take-home pay. After that, they still had the mortgage, utilities, and groceries. Ed\u2019s brother, who had lent the money long before any of this, had hit his own financial trouble and asked to be repaid as soon as Ed could manage it \u2014 at the worst possible time.<\/p>\n
Even so, Ed and Deb were not behind yet. They kept every account current by cutting everything they could and juggling due dates. But they had no cushion. They were one surprise away from missed payments.<\/p>\n
Breathing room<\/p>\n
A 0% balance transfer card<\/a> was the first thing they looked at, and it could have worked if the drop in income had been temporary. But a single card\u2019s limit would not absorb their full balance, and the interest-free window \u2014 usually 12 to 21 months \u2014 would be hard to clear on their reduced income.<\/p>\n A debt consolidation loan was another option, folding the high-rate balances into one fixed payment with a definite payoff date. On $60,000 a year, though, they were not sure that was sustainable.<\/p>\n With over $15,000 in debt and no realistic way to clear it on their reduced income, they decided that a debt settlement program, such as National Debt Relief<\/a>, was the more practical solution.<\/p>\n A debt relief program is a service<\/a> that negotiates with your creditors to settle what you owe for less than the full balance. It is a sensible step when the cheaper options have run out and you cannot repay the full amount. It lowers your credit temporarily and may leave you with a tax bill on the forgiven portion.<\/p>\n For Ed and Deb, that trade was worth it.\u00a0What the settlement bought them was not a finish line but breathing room.<\/p>\n Life happens<\/p>\n