From Unemployment to $40K in Debt: How Ryan Beat the Odds
Unemployment is something that can happen to the best of us. As of February 2021, around 20 million Americans were unemployed. Just because it’s a common occurrence, that doesn’t make it any easier to deal with—especially when your job is your primary source of income. Savings will only take you so far if you’re unemployed for longer than you expect.
What happens when your account runs out of steam?
Some turn to loans, credit cards, and family support. These are some things Ryan resorted to when his career took an unexpected turn. High interest rates, however, took a bad situation and made it worse.
It all started when Ryan lost his job…
If you’ve ever lost your job, you know how devastating it can be. Job loss can be especially unnerving when you don’t have an emergency fund. You may wonder how you’re going to pay bills and meet your basic needs.
In addition, there’s no telling when you’ll find a new job and how long the unemployment spell will last. Ryan shares, “Unfortunately, what I thought would be a temporary unemployment timeframe turned into months.”
Credit cards became his means of survival…
Bills don’t care whether you’re employed, so Ryan had to find a way to cope until he got a new job. He turned to credit cards to get by.
“I lost my job and began to rack up credit card debt as I struggled to get by. My income had left me, but the bills were still there. I turned to my credit cards to make do while I searched for a new job.”
Putting bills on credit can get expensive quickly. The average interest rate on a credit card is currently around 16%. This means if a credit user leaves a balance of $3,000 on a credit card, they end up paying over $2,000 in interest charges while making minimum payments.
By the time Ryan blinked, he was in 40k debt…
It wasn’t long before Ryan found himself in debt; he racked up $40,000 worth. It can feel impossible to get out of such an exorbitant amount of debt, especially when you can’t escape high interest rates. Considering the average American has $2,980 in credit card debt, Ryan was in deep.
“The credit cards I was using began to run out of room. My attitude toward life in general was on the decline, and that was negatively impacting my ability to interview well.”
High interest rates were the straw that broke the camel’s back….
Ryan felt defeated as anyone with mounting debt would. The interest charges made it feel impossible to get ahead. Even if he got a job, how would he move beyond paying interest on his debt? To effectively tackle debt, it’s best to pay more than the minimum payment.
His financial challenges began negatively affecting his mental health. Studies show people with debt are three times more likely to have mental health issues like depression, psychotic disorders, and anxiety. In Ryan’s words,
“The debt snowballed with interest charges that left me feeling defeated and depressed. I was absolutely ashamed of the hole I had dug for my family, and I couldn’t see a way out. I was nearly resigned to the concept that I’d be stuck working my butt off forever in order to pay for the mess I had made.”
He mustered up the courage to call up Consolidated Credit…
Ryan had reservations about using credit counseling and debt consolidation services. Like many others, he thought it was too good to be true.
“While I had heard of credit solution plans, they seemed insanely intimidating and a bit too good to be true. I wasn’t quite sure they were legit. Plus, calling an absolute stranger and admitting my stupid decisions didn’t sound too exciting.”
When you’re in debt that’s beyond your ability to pay off, you have several debt relief options. Some include a debt management program, a consolidation loan, and bankruptcy. Feeling hopeless and defeated, Ryan took a leap of faith and contacted Consolidated Credit and never looked back.
“Finally, I worked up the courage to call Consolidated Credit. It was a turning point in my life. They were understanding and helpful with creating a financial plan I could get behind. I felt my tension immediately disappear and my hope was restored.”
It was almost a walk in a park after that call…
Ryan enrolled seven cards into the program, and a credit counselor guided him through the credit counseling process. He felt supported and relearned some financial basics he’d abandoned.
“They helped me budget and get back to the basics that I had strayed from. They talked through it all with me and spent the time to get the real picture of my current life, and also acknowledge the struggles I had experienced. I was very surprised and thankful. I could see a way out for the first time.”
Ryan’s interest rates went down by about 20% on most cards. This made paying down debt easier as he could focus on what he owed and not worry about that number increasing.
7 cards and less than a lifetime later, Ryan is on his way to freedom…
Now that Ryan has the tools he needs to overcome debt, he’s staying on task and paying his debt down. He’s been enrolled in the program for two years and has made significant progress. Here are some of his learnings.
“Since that initial call, I’ve learned to stick to the financial game plan they created with me and I’ve been ecstatically watching my debt melt away. I’ve learned to live within my means and the budget that I have. I’ve learned to get by and support my family without using credit cards. I’ve learned that there is still some good in the world and that there are still some strangers who are ready and willing to hear you out and help however they can. With each paid off card balance, I’m increasingly happier and my financial future’s never looked so bright. I can’t wait to complete my plan and be debt-free.”
We asked him what he’d do once he pays off all his debt…
Paying off debt doesn’t happen quickly for everyone—it often takes time and consistency. However, Ryan is closer than he’s ever been to paying off his debt.
We wanted to know what he plans to do after his final payment. Here’s his response, “Cutting up all my cards and burning them! I saved them in my safe and I’m waiting for that occasion.”
Here are a few words advice you can thank Ryan for later…
Ryan recommends Consolidated Credit because in his words, they’re “Understanding, helpful, and easy to work with.” He says if you’re in debt and reluctant to seek help, take the dive and you’ll thank yourself later.