Dealing With Crisis

When debts balloon, escape can seem like the only option.


I received another E-mail in response to our recent stories on 20-somethings and personal finance. This time, it was from a woman in Cheyenne, Wyo., who says young people today don't know what "real" debt is.

She writes that she and her husband are in their 60s and 70s, respectively. They had run their own headhunting business but came upon hard times during the slowdown after 9/11. While they had been earning between $70,000 and $90,000 a year, they soon ran up credit card debt of $100,000 while trying to maintain their lifestyle on much less income. By 2003, their credit card debt had reached $180,000, and they had used up all their savings. They refinanced and settled with some of their card companies, but there's still more debt. The woman, who asked to remain anonymous, writes:

The phone rings constantly with calls from computers representing collection agencies. They go unanswered. Meanwhile, [I] continue to keep getting lucky enough to earn enough money to pay the mortgage and keep alive a couple of credit cards and not fall behind in any other monthly costs such as utilities, supplemental health insurance, etc.

But the computer calls from India and elsewhere continue regarding severe delinquencies of 10 credit card accounts.... [I'm] considering a plane ticket to an unknown island and disappearing.

It is quite a disturbing story. As always, tips or words of wisdom from those who have been there are welcome.