Excerpt from Chapter 7: Credit Dodger No More

  The phone rang incessantly. The published poet didn’t dare answer. She feared the threats and name calling. Instead, Published Poet adopted a phone code and shared it only with her closest family members and friends. They were instructed to dial her number, let the phone ring once, hang up, and then dial again. She would answer the second time.

  Why did Published Poet adopt such an elaborate scheme before she would pick up her ringing telephone? To distinguish friend from foe, namely collection agencies harassing her at all hours. When the collection agencies eventually figured out the code, she disconnected her phone altogether so no one could reach her.

  Another woman developed a simple system for determining which bills to pay. She drew a line in a room with a belt or another item and then tossed the bills into the air. The bills that landed on the positive side got paid, the others got pitched into the circular file, otherwise known as the garbage can.

  In the lean years before his bestselling book Act Like a Lady, Think Like a Man made him exceedingly wealthy, comedian Steve Harvey had a distinct method of curtailing phone calls from collection agents. When they called asking him if he had a plan to pay his debts, he explained that he put all the names in the hat and drew out the bills to be paid that month. If particular agents continued to call, Harvey wouldn’t put their names in the hat.

  With the national government running up trillions of dollars in debt,U.S.citizens are not far behind in piling up mountains of debt for homes, cars, student loans, credit cards and so forth. For example, Americans went from saving 7.5% of their income in 1991 to less than zero percent by 2006, meaning that they spent more than they earned. The last time the national savings rate went negative was during the Great Depression when jobs became scarce in a contracting economy with a 25% unemployment rate.

  During a thriving 2006 economy, Americans like Published Poet were borrowing to support their spending habits and finding themselves eventually overwhelmed by their debt and badgered by collection agencies. Published Poet went into therapy for compulsive shopping in 2007 and filed for bankruptcy in 2008, a legal process for which she felt ashamed, particularly as it was her second time. In a deteriorating 2009 economy, many Americans borrowed to survive, while even more came to terms with prior financial excesses as their homes were foreclosed and they declared bankruptcy attempting to save the last shreds of their American dream.

  This chapter explores issues associated with managing debt. It counsels how to climb out of debt if you’ve arrived at the point where you need a phone code to keep the collection agencies at bay, or are running a debt lottery to determine which bills to pay. Above all, the chapter encourages acknowledging and accepting debt and taking concrete steps either to pay it off or seek relief by negotiating a reduction or filing for bankruptcy.