Great blog as well. Thank you. Will follow you from now.

Very good points in the comments, mellen.

“I heard a lady say ‘I deserve this’ as she reached for a food item in the cooler case. Do any of us really deserve anything?”

Well that’s kind of depressing, isn’t it? I actually think we DO deserve things. If we’ve worked hard for something, is it wrong to feel entitled to a little reward or indulgence?

I mean think about it. What’s the alternative? To go through life constantly believing we don’t deserve ANYTHING? That everything we have, we don’t really deserve? What kind of horrible, self-loathing attitude is that to carry through life?

The truth is, Mitchell’s situation is exactly the reason bankruptcy laws exists. Mitchell should bite the bullet, get his ducks in a row, then file bankruptcy and be free of this albatross. There’s no reason to sacrifice the next decade of his life living like a pauper. It’s UNSECURED debt. The risk is built into the interest rate. The banks expect to lose their money in some cases, and let’s face it, Mitchell’s is a textbook candidate.

Mitchell will never be this young and healthy again. No way would I waste 10 years passing up traveling, enjoying dinners with friends, and everything else out of some bogus sense of “obligation” to a money-hungry corporate conglomerate bank that only cares about profits.

Bottom line: Assuming there are no cosigners on this debt, Michell should get his housing situation in order (that is, rent a place he is certain he can afford and that he’ll be comfortable staying in for 7 years), get himself a reliable vehicle that’ll last him for 7 years, build up a small cash emergency fund ($1000), taking it from the credit cards if he has to, then he should file bankruptcy.

Just declare bankruptcy and walk away, otherwise paying back this debt is going to become your life’s work, and that is not something I would want to have written on my tombstone.

I don’t think we should judge Mitchell without more information. $100,000 in credit card debt, in addition to being from medical bills, could also be from a business that went bust. It’s not necessarily irresponsible spending.

Almost there, I’m glad you were able to use the HELOC to get out of debt, it can work for some people. The reason most of us are against it is that it would only work if the person was totally committed to paying off their debt. The majority of people who put debt on their HELOC aren’t, and end up even worse off.

I’m intrigued.
So did you work to stop the connection between the self-esteeem problem and the spending, or on improving self-esteem?
How did you go about that?
It’s a simple little sentence, but a sure candidate for “easier said than done” – my self-esteem problem and low confidence is closing doors for me in life, and I’m finding it hard to ignore the negative subtexts in my thought patterns or to improve them.

Example: Broad advice like never pay off your cards with a HEL is usually accurate but there’s some situations where it could make sense. The reason it’s so bad is because most people don’t adjust their spending behaviour (see article and point above) and so end up where they were before, plus the HEL.

If however the debt is the result of one-time or old expenses, you’re confidently and consistently living below your means but maybe unable to shuffle things effectively (Joan-post 13) then it could be an effective solution. I’m not suggesting it’s absolutely something she should do, but it may be worth looking into.

The expression “never say never” didn’t come out of nowhere. Generalized advice like never use an HEL (or credit cards) potentially deprives people who may benefit from these. Granted they are potentially dangerous tools (and you can’t count on a bank to tell you that), but you cannot assume you know what’s best for others and what they can/can’t handle.

I want to suggest one more thing for the list: Enjoy the items you already have! I can’t tell you how many times I look around my home now and see things I haven’t used in a long time that I use and get a whole new experience using. The upside of that is no new expense.

I took your advice a couple of months ago. My husband and I have $40K in credit card debt over 5 credit cards. I was so overwhelmed with the bills each month. We were only making minimum payments on each. I would try to pay a little more on one, but wasn’t consistent with which one. We were not living within our means. I was depressed and overwhelmed by our debt. I read one of your articles about an option to take out a home equity loan or a personal loan to pay down credit cards. We went to our bank to discuss our options. We qualified for a personal loan, but not a home equity. We took out the loan and the bank payed off and closed out all 5 charges for us. Thank God. I don’t know that we would have closed the cards and would have reverted back to the same bad habit. We were paying between 7.99%-13.99% in interest between the 5 and now we have a 9.99% fixed.
I feel like we have a better understanding of our monthly bills, I am not so overwhelmed and we can’t turn to charge cards anymore for the little things. If we don’t have the cash, we don’t get it. We just cancelled a camping trip we planned with friends because we don’t have the cash to go. Before we would have just charged the whole weekend and said we’ll pay it back with our next paychecks, which never ever happened.
It is so hard. It has been a huge break in our bad cycle. But harsh reality hit us in the face that we will never get ahead until we pay down the debt. We are now living within our means. It takes sacrifice and retrainig our thought process, but I am so glad we did it.

Like it or not, if someone cannot pay their unsecured debt, it falls off your credit report after 7 years. It is downright foolish to use equity from your home to pay off the credit cards. You will be liable for this debt no matter what. Someone does this, then loses their job in this economic climate, they might find themselves and their dependents homeless. It is probably going to be challenging in this environment to convince credit card companies to lower interest rates when they are skittish about consumers’ ability to repay and raising them to ridiculous highs. You may be able to find a reputable credit card counseling service who might be able to help you with repayment plans, but be wary of those who ask for a lot of funds upfront–these are scam artists who take the money and run. In the short term, the best approach is to pay as much money as you can afford to each month on the card with the highest interest rate, and pay the minimum on the others. When you pay off the first one, throw the extra money at the card with the next highest rate. I highly recommend Suze Orman to learn more about managing finances smartly. Also, really take a hard look at where you spend each dollar, and separate the wants from the needs. You may find more funds to throw at your debt if you do this. Good luck.