Tackling Debt

January 17, 2018

Jason was paying off five credit cards, three of which had interest rates of 20%. His total debt was around $17,000. “I was paying the minimum every month but when a new statement would come it was like I wasn’t paying anything!”

 

How did he get into debt? “Just buying things,” Jason admits. “You can just buy stuff and feel ‘I don’t have to pay this right away.’ The first year might be 0%, but then it’s 10% and it keeps increasing. It’s easy! You think, ‘Hey, I don’t have to pay this for awhile.’”

 

Jason’s dad knew about Tabor and recommended Tabor’s Ann B. Barshinger Financial Empowerment Center for Lancaster County (BFEC). He and his wife, who was pregnant at the time, met with Yvonne, one of the financial counselors. Yvonne went over their income and expenses and showed them how to prioritize their bills so that their paychecks would cover what they needed and have money left over to pay down the debt. Two of Jason’s cards only charged 6%, so Yvonne worked up a monthly budget and payment plan to guarantee the three remaining credit card companies a monthly payment directly from the BFEC in exchange for reducing their rate to 6%, as well. Then Jason paid the BFEC each month and the BFEC distributed his payment to the credit card companies.

 

Jason remembers, “Yvonne showed us how to balance and figure out all our expenses and what expenses we’d have with a baby … how to budget, how to prioritize and balance our bills and expenses with our paychecks.” Jason still received monthly bills from the credit card companies, but he could see that they were being paid and that the principal was actually going down.

 

“What really helped me out was getting a truck,” Jason says. He had been using and making the monthly payments for his deceased grandfather’s truck, but gave it up due to a family conflict. “Working with the BFEC,” continues Jason, “helped my credit score so I was able to get a truck in my own name at a good rate.”

 

He and his wife of nine years work as operators at a mail house near King of Prussia. They would like to buy a house closer to where they work. Having taken care of their debt, improved their credit score, and learned to budget wisely, they are in a better position to pursue their dream of a house.

 

“We don’t buy things like we used to. There’s nothing I really need for myself. I’d rather spend a little on my daughter.”

 

“I’d recommend the Ann B. Barshinger Financial Empowerment Center for Lancaster County for anyone who found themselves in debt. You have a fixed amount you pay every month, and the balances are going down. And as each card is paid off, you’re still paying the same monthly amount and then you really see the balances continue to go down with each statement.”

 

Jason just made his last payment on his Debt Management Plan last August.

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