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Credit card debt and foreclosure: A family's heartbreaking story

South Carolina families experiencing credit card debt may sympathize with a recent story making headlines. A family heavily in debt pledged to turn around financially and make positive money decisions. The change in attitude came when they found themselves in credit card debt by over $40,000. For them, the number represented a threshold that neither of them thought they'd ever cross.

The beginning of their financial troubles came in 2002. The couple moved in together and started a publication company. Believing it would take off and generate a much-needed income, the couple continued to finance the company by using their credit cards. Eventually, the financial strain became too much and they shut the company down. They found full-time jobs and raised their combined household income to $150,000 per year.

The Seattle-area woman admits making several mistakes along the way and being partially responsible for the debt mess. She acknowledges living beyond their means by eating out frequently and taking vacations. When money became tight, she continued to finance their lifestyle by using credit cards.

Soon after beginning to work full time, they began to pay down their debt as much as they could, close to $2,000 per month. They became responsible with their spending, took fewer vacations, rarely ate out and were able to completely wipe out the credit cards with the highest interest rates within two years. But soon after, the nation spun into a financial crisis. The woman lost her job and the man had his hours cut by half and wages diminished by 10 percent. Their annual income is now half of what it used to be.

Although they managed to avoid complete financial ruin by paying off their credit cards, they are now unable to pay their mortgage and owe about $82,000 more than the house is worth. The family is awaiting foreclosure on their home and saves the money meant for the mortgage payments so they will be able to afford a place to live if and when the house is taken by the bank. Thus, even with the best of intentions, the family may still lose their home through no fault of their own.

For South Carolina families in similar circumstances, bankruptcy protection often offers an opportunity to stop foreclosure while addressing credit card debt and other obligations as they search for a plan to achieve economic security once again.

Source: New York Times, "One Couple's Ordeal With Credit Card and Housing Debt," Tess Vigeland, March 21, 2012

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Reed Law Firm, P.A.
220 Stoneridge Drive,
Suite 301

Columbia, SC 29210

Phone: 803-726-4888
Fax: 803-726-4887
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Reed Law Firm, P.A.
1807 West Evans Street,
Suite B

Florence, SC 29501

Phone: 843-679-0077
Fax: 843-679-0667
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