Six Figure Debt

I caught ABC’s Nightline last night on reducing credit card debt.  The featured a woman in Detroit who was swimming in credit card debt.  It was a fascinating segment on how to call the credit card companies to get your APR reduced.  I was aware of this technique but wasn’t sure how easy it would be to actually get the credit card interest rates reduced.  Check out the video, it didn’t seem that difficult.

You will notice that all the debt bars on the right side of the blog have been updated.  I have put together a spread sheet of all our non-secured debt and you can see it in all its glory on the right side of the blog.   In the past I hadn’t included all the damage as I wasn’t serious about eliminating the debt.  The past two months have seen me and my wife get on the same page and get serious about debt elimination.  I think it took me contemplating personal bankruptcy for my wife to really understand the dire financial straights we were facing.

My taxes were finished today and we were delighted to hear that we will get almost $15,000 back from the Federal government.  This doesn’t include the $1,800 we will receive as part of Bush’s economic stimulus package.

 We got the generous return because of the losses we suffered in the sale of two houses in 2007.  Believe me, we aren’t having too much withheld.

So, here is the plan for the $17000.00 windfall.

1.  Pay off the credit card with the lowest balance, currently $4,100.  This will allow us to snowball an extra $86.00 a month toward our debt reduction.  Combines with my car payment that ends in May, we will have $520 a month to snowball on the next credit card.

I was reading a newspaper online the other day and came across an article explaining when and how I was going to receive my “economic stimulus” tax refund.  According to my social security number, my check will be mailed to me on May 9.  We should get $1800, $600 each for my wife and I and $300 each for my two children.  While $1800 is not a huge amount of money, it is a nice chunk of change to throw at our debt.