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Debt in the Ozarks: How One Area Woman Paid off a Mountain of Debt

Credit: thesmarterwallet.com
Credit: thesmarterwallet.com

http://ozarkspub.vo.llnwd.net/o37/KSMU/audio/mp3/debt-ozarks-becoming-debt-free-segment-one_68795.mp3

Karen Catt’s financial problems began around 2001 when she was going through a divorce.  She had no job and took on $14,000 in debt.

Even though she found employment, she knew she needed help.  She heard about Consumer Credit Counseling Services, a non-profit organization in Springfield that helps people who are having trouble paying their bills.  Counselors there educate people about budgeting, using credit cards and other loans, consumer rights and establishing and building a better credit record.  They also can create debt management plans for those who are struggling to pay off bills.

Before she found help, though, it was hard for her to see a light at the end of the debt-filled tunnel.

"It's just like quicksand--the more you try to struggle the deeper you go.  That's how I describe how it felt at the time until--you know, you don't even have anything to hang onto, so as soon as I found out about them I thought, 'well, I'll just go in and see what they have to say,' but I felt like I was grasping at a straw," she said.

But Consumer Credit Counseling Service created a debt management plan for Catt.  And she was finally able to feel some hope of getting out of her financial situation.  First though, she had to be honest—with herself and with the counselors at CCCS.

"These were people I knew I could trust to say, 'here's how much debt I have, and here's where it is.  Some is on credit cards, some is gonna be on, you know, now I'm gonna have rent or utility bills or, you know, some of those are gonna be basic, but I had to first and foremost lay it out there," she said.

She said that was necessary but difficult.  She had a bank manager background and was embarrassed that she had gotten into debt even though she’d once helped others get out of difficult financial situations.

Because Catt was honest about her expenses and income, she says it was easy to follow the plan.

"But if I hid part of my debt, I'm back in that cycle of not catching up or if I pretend that I'm not spending money somewhere I'm spending it I'm not gonna be able to follow  the plan," she said.

Catt had tried and failed to get her creditors to lower the interest rates on her credit cards.  CCCS was able to do that for her.

And she made sure she had someone she was accountable to—someone who would point out when she was veering off the plan.  CCCS counselors made her see that if she went over her budget one month she needed to cut spending by that much in the next month.

The hardest part at first, she says, was being disciplined and not spending money on things she wanted but didn’t need.  That’s easy for her now.

"It is so much easier to make the better choice today is basically how I sum it up.  It's just easier to make that better choice today," she said.

Catt paid off her debt in just 18 months after taking on both a full and a part time job.  Even though she’d had experience helping others get out of debt, she says having someone to coach her made all the difference.

"You could talk to them at any time.  I honestly don't remember if my meetings were weekly or monthly, but I know that I had regular meetings with them to be sure that I was on schedule.  Sometimes you do have to go to someone else to just kind of walk you through it, and you go, 'ah, yes.  I know this,'" she said.

She says the best advice she received when she was facing a mountain of debt was to go to talk to someone who could get her out of the situation.  According to Catt, even if you’re hesitant to do so, at least talk to a credit counselor and see what they have to offer.

"You'd be amazed at how many other people have found a way out of the situation--the relief to have someone to act as your mediator and advisor, so, yeah, so if anyone  else is stressed out, just go meet with them, and listen to what they say," she said.

She suggests just trying to follow a budget for three months and see how it goes.

Today, because of her experience at CCCS she remains debt free.  She says when you go through that experience once, you learn. 

She puts aside a certain amount of money each month for Christmas so she’ll have money to spend on gifts, and she still carefully follows a budget.

According to Catt, a lot of the stress she was under went away once her financial needs were met.  She says you can easily step back into bad habits, but it’s just as easy to step into good ones.

The stories in our Sense of Community Series “Debt in the Ozarks” can be found on our website, ksmu.org.

For KSMU, I’m Michele Skalicky.