Severe Debt, Extreme Measures

Debt has become the American way. So has denial. And super-high debt levels paired with serious denial is becoming almost ubiquitous. While not all debt situations reach critical levels, when they do, the response must be equally severe.

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Kevin, 24, has $19,000 credit-card debt, drives a heavily-financed $45,000 fancy high-performance car ($480 monthly payments) and still lives at home because he cannot afford to move out. He can barely afford to eat because in addition to his debt, he pays $2,400 a year for car insurance and $3,000 on gasoline—all on less than $20,000 annual net income. Extreme debt.

Kevin needs to sell the car and buy a bicycle or a bus pass and get serious about his life. With no new debt and $787 monthly debt payments he can be debt-free in 29 months. He must also sell all of his toys and expensive gadgets, pack his lunch every day, and stop spending on anything that is not absolutely essential, including poker, $50 haircuts and new clothes. Extreme measures.

The Lewis family bought the home of their dreams eight years ago. In order to get the bigger model, the great floor plan and upgrades on all amenities, they opted for creative financing. Their highly leveraged, variable rate mortgage, together with private mortgage insurance (PMI) and a home equity line of credit they picked up two years later, eat up nearly 60 percent of their net two-paycheck household income. Add on childcare, car payments, credit-card debt and life essentials like food and clothing and they are digging the equivalent of a financial grave. Extreme debt.

The Lewis’ must sit down, take one big collective deep breath and get serious about their lives. What is really important? Is it square footage, granite counters and fancy appliances or is it spending time with the kids and the freedom to take the weekend off and enjoy their lives? This family needs to plant a For Sale sign (yes, even in this market) in the front yard today. They cannot afford this home. Period. It’s time to pare down and pack up. Extreme measures.

Meet Patty, 61. Everything was going great until her husband suddenly lost his job along with their health insurance. Patty arranged to enroll in her employer’s plan during the next open season which would commence just four weeks hence. And that’s when she got very ill.

Because she incurred big medical bills before she could enroll, Patty and her husband went from being financially sound to critical in a matter of weeks. Extreme medical debt.

As soon as Patty was back on her feet, she took on a side job. A paper route. Every morning at 3 a.m. Patty picks up the papers and walks her route, carefully placing a newspaper at the front door of each of her customers. Patty lives in Montana where the weather is often severe. So far her coldest morning has been -24 F. She receives $327 net per month—all of which goes straight to the debt.

“It’s not that bad,” said Patty. “I’m getting a lot of exercise and I’m thankful for the additional income.” Essential measures.

Question: What extreme measures have you put in place to conquer your extreme debt? Tell us in the comments here.


Please note: I reserve the right to delete comments that are offensive or off-topic.

  • My husband donates plasma. He brings home around $230 a month.

  • Maryann

    We (my sister and I) cut down everything possible when I lost not 1, but both of my jobs within months of each other in 2008. Magazine subscriptions, stopped renewing them. Newspaper, stopped buying it. Out to eat, stopped going. Buying Avon, no more. Trips to the local gourmet grocery store, which was in addition to our weekly grocery shopping, ended. Air conditioner on all day, every day whether it was warranted or not, stopped. Buying meat, and just about everything else, not on sale or brand name, no longer. Delivery of food directly to our home, cut that off. (Yeah, we eat a lot!) We went to our church’s food pantry a lot during those first few months, too, and glad we were able to do that. Called every creditor we had and reworked loans, at least with the ones who were willing to do that. Of course I had unemployment insurance for a while, so that helped until it ran out. Praise God I was employed full time within 7 months of being laid off, but at a much lower rate of pay so we were still having to make more adjustments. I had a lovely friend who, under the influence of God’s prompting, pay off what I owed on my living room furniture, about $1800. My sister took on more of the household expenses, even though she made less than I did before I lost the jobs. And finally, about a year ago, we let go of the one big expense that neither of us wanted to, our satellite TV package. We’ve learned to do other things in our leisure time–read more, make jigsaw puzzles, cook more (and eat what we cooked rather than going out or bringing in!), spend more time with friends and at church activities. We still watch TV, with an antenna and Apple TV, but no longer to the extent we did before, hours upon hours on end, especially me. If there’s a show I want to see on, say, Food Network, I go over to a friend’s house and have a nice evening there, visiting and watching the show. All was not peaches and cream, however. We got behind on our mortgage and went through 2-1/2 years of negotiating and interminable waiting to see if we could get a modification, which we finally did several weeks ago. It’s been a long road, but with advice from people like Mary Hunt and others, we are on our way back to financial security!

    • joyce

      wow, maryann, you have made quite a few changes to help you in your financial journey. i commend you highly for doing what many are not willing to do when they get in a tight spot. thanks for sharing your story. keep doing the right thing!

      • GaelicWench

        I don’t have severe debt, but still have it all the same. Debt is debt no matter how it’s sliced up, so to speak. I took on extra hours at one of my jobs for the added income. This will go to paying down the debt.
        Maryann cut out a lot of stuff, making a choice to put herself in a better position in the forseeable future. I, too, believe in cutting out many non-essentials, knowing that this setback will be temporary and take me to a better situation soon enough. What’s key is to simply take the bull by the horns and stick to it without let up until that goal is accomplished.

  • Lori

    I rent out my guest bedroom through a website called (I am not affiliated with them in any way.) I also rent out my extra garage space. This is probably more prevalent in big cities. These are great ways to bring in more money.

  • Kathy

    My husband and I sold our dream house after 12 years, for a small loss. Then moved to a small rental in a beautiful neighborhood. Our outgoing monthly expenses have dropped by nearly $1,800 a month! (But really I think it’s been a lot more than that because the hot water heater in our new home had to be replaced recently, but the landlord had to cover the cost… had this been our old house we would not have been able to afford the cost of a new unit!) Smaller house equals less electricity, etc. Tough decision, turned out to be the best decision of our lives. We are both happier, which means are kids have happy, loving parents again.

  • shanahan

    I have taken on cleaning houses on days off of my full time job. Currently I have 4 houses I clean which brings in an extra $700 a month. Now I just need to turn it onto our creidt cards. This brings our income just above even with out debt. We have extremem mediacl debt and back bills because my husband was injured aout 1.5 yrs ago. I also decided to resalavage furniture and sell it online to locals.

  • Sunflower

    It’s a good article but I do have some questions. Regarding the woman in the story, Patty, who lost her insurance: My understanding is that if someone loses their benefits because a spouse lost his/her job, then it’s considered a “qualifying event.” That means the person does not have to wait for an open enrollment period to enroll in their employer’s benefit plan. Is that true everywhere or just some employers?
    Also, even if Patty had been ineligible for benefits at her own job, she and her husband could have used COBRA due to his job loss. I realize it can be expensive, but probably a lot cheaper than the bills she incurred later. When a friend was in a similar situation, she said they had a period of time to elect to use COBRA, so they didn’t have to decide right away.
    It is awful when people have financial problems on top of medical issues, but in this story I am not sure why she was unable to have any health coverage. Any comments that could clarify things?

  • I got a consolidation loan for the $14,000 I owed on 3 credit cards. Part of the agreement was that I cancel them. I had not realized how much I used those cards; on line, at the grocery, at the pharmacy… I am now learning to live with cash and checks. It’s ridiculous to say it’s hard but that’s the truth. I’m rethinking all my spending habits, changing medications to generic, thinking in the grocery aisle, etc.

  • Debra

    i also have severe medical debt – insurance companies pay less and charge more out of pocket – these stories give me hope that there is light at the end of the tunnel…

  • yoder178

    Years ago when I was in my first apartment and living on a $20/mo food budget I froze my credit cards–literally in water so I would not be tempted to use them any more. Paid them off a little at a time. I worked as a home health aide. In the summer I received as much vegetables from my patient’s gardens as I wanted. I used double coupons at the local store and went to garage sales which I still do to find furniture, storage items even clothes. Years later after losing my job I’ve been more comfortable in my lifestyle because I never gave up on these money saving ideas.