But understand there’s some risk for me. Wait until you see just how reckless Lou Carlozo, the intrepid personal finance journalist, once behaved.
What’s more, you might think this story is so over-the-top that I made it up. If only.
My woes started, as many a wild ride does, with Hollywood schemes, rock and roll dreams and a few bad money moves that brewed a fiscal perfect storm. I was a full-time rock musician at the time, and I’d just read an article that director Robert Townsend had financed his 1987 movie “Hollywood Shuffle” entirely on credit cards.
So I applied for a few cards. I got one, then two. Then eight or ten. It amazed me how easy they were to get.
I started cash advancing left and right, pumping money into an album my band was recording at a big-time recording studio. When the bills mounted — first to $5,000, then $10,000, then over $20,000 — you’d think I’d have batted an eye. Nah. ’Twas free money, or so it seemed. How rock and roll!
During this time, a close family member noted my newfound cash pool, and assured me he could multiply it through an IPO investment. He asked me for a few thousand dollars: Why not? This guy was smart, charming and I had every reason to trust him. Besides, it wasn’t my money.
Then came the twister.
Expenses for the album spiraled, most of them billed to me. Then the family member, a problem gambler in his past, took my money to the racetrack. In a few days he squandered it all: More than $12,000. That’s when it hit me — it wasn’t really my money. And I had to pay it back.
Like that, I found myself more than $30,000 in the hole. Trying to kill off that debt on a waiter’s salary proved impossible, especially when my band released the album and it tanked, selling fewer than 200 copies.
Despondent and depressed, I called my older brother Joe, who’s a CPA. He told me about a non-profit called the Consumer Credit Counseling Service. Today, that organization exits as Money Management International — and if not for their help, I would’ve landed in bankruptcy, debtor’s prison, or worse.
As a non-profit credit-debt counseling and education agency, MMI can do a lot for you, as they did for me. First, they helped renegotiate better interest rates and payment terms with my creditors, who didn’t want to see me default. Once I had the debt tamed a bit, I found better-paying work and landed a debt consolidation loan. I made my payments like clockwork, even as I took care not to rack up any more bills.
But I still had to learn financial discipline. I didn’t like living at home as a 26 year old, but it helped me save on room and board. I sold much of the fancy music gear bought on the credit cards, recouping some lost funds.
And I repented my free-spending ways. The CCCS folks taught me to “write it all down” — that is, to use monthly budget charts to track daily spending. As any successful dieter knows, you do much better when you record every bit of your consumption.
If you have out-of-control spending or bad debt problems, I can sympathize. I felt ashamed and powerless. But making a phone call marked a crucial first step for me. At MMI, there’s no charge for the first counseling session, and once you get a debt management plan, the fees to set it up and maintain it are manageable.
As a non-profit community service organization, MMI has a long history behind it that dates to 1958. In that year, consumer credit card debt didn’t even exist — hard to believe, eh? American Express issued its first charge card that year, and BankAmericard (now Visa) came along eight years later as the first card that allowed consumers to carry credit balances.
Fast forward to March 2012, when we average $14,517 in credit card debt, according to NerdWallet’s analysis of Federal Reserve statistics. And while that’s down from $16,383 in March 2010, it’s not nearly as low as it should be. I’m guessing that if you’ve read this far, your debt could be much higher.
If so, here’s what to do: Call MMI at 888-441-1744. They’ll answer 24 hours a day, seven days a week. (Don’t confuse the work they do with private “credit repair” agencies, which often charge exorbitant fees and have dubious track records.)
Also, take heart. If you’re anything like I was, you didn’t get into the mess overnight and it will also take time to dig out. My excavation took two-plus years, and plenty of sacrifices. I ate out less. I limited spending to $40 a week. Amidst all the belt tightening, the band broke up. The rock and roll lifestyle had become too expensive.
Do I have any regrets? I’d rewrite huge parts of my story if I could. But as for telling it to you, I have no reservations whatsoever. If you’re in debt despair for whatever reason in this Great Recession, I want you to know that you’re not alone. Help is available. Redemption is possible.
I believe that with our finances, as in all areas of life, we shouldn’t strive for perfection, but course correction. When I made my mistakes, I was fortunate to learn from them. I’ll never repeat my nightmare again.
Perhaps you feel it’s too late to turn things around. If so, I understand. But there’s another way to look at it: If you start addressing your debt difficulties today, you’ll beat the New Year’s resolution rush by a good two months.