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Thursday, October 21, 2010

Debt Busters on CNN

It's wonderful to read about people getting out of debt. I love to see all their tips and strategies, all honey to the frugal heart.

So, check out this feature on CNN, which presents 8 "get out of debt" stories. You may faint when you get to the last one. The woman explains how "negotiating" with her credit card companies got her debt (incurred when starting a business that failed) reduced from $110,000 to $39,000! Honestly, if it were me, I would be too embarrassed to put my picture and name out there for all to see.

However, I don't need to go on; the comments do that for me. The others featured are so responsible and honorable. Love their stories.

Am I being too hard on Melody?

6 comments:

Duchesse said...

Only read Ms Brooke's now (promise I'll go back and read the rest) but I wonder how she and her husband will feel if people decide they only want to pay their business (should she ever manage to start one) 30% of their bill.
Assume you know how the collection industry works. The agency bought the bad debt from the credit card company for maybe 15-20 cents per dollar so if they get 30 cents they are still ahead.

She negotiated but her credit rating is sunk.

Bucksome said...

It's definitely not something to brag about, but a viable option for people.

Funny about Money said...

Bizarre story, isn't it.

Given that, as Duchesse points out, the collection agency still made a profit on this pair, it doesn't seem that criminal, at least not compared to what we've seen from the vast lenders whose greed plunged the world into a massive recession.

A high percentage of small businesses fail. According to SCORE, about half survive their first five years. That figure is based on a 2003 study; you can be sure the rate is higher now. One could question the couple's wisdom in starting a business during an international depression. And one certainly could remark upon the stupidity of racking up business debt on personal credit cards, if the impression given by the article is correct.

We're criticizing them for doing what any belly-up corporation would do: closing down and closing out debt. In paying $39,000 on what is apparently $110,000 worth of personal credit card debt for business expenditures, they're probably ponying up probably more than savvier business owners would have ended up paying.

Funny about Money said...

oop! typo!

Shelley said...

I dunno...reading stories about how extravagant and foolish people can be never lifts my spirit. I sort of class this along with so called slapstick 'humour' - it doesn't make me laugh, it makes me wince. And if the stories demonstrate that they got away with being spendthrifts, who learns anything positive? I'm sure I miss the point, but this is not my kind of entertainment.

Frugal Scholar said...

@Duchesse--Good point. Also, on further reflection, I think the problem was the chipper tone.

@Bucksome--True, and I now realize that much that was negotiated away were the draconian fees that were tacked on.

@Funny--The big change as you point out is that consumers are now doing what corporations have done for lo these many years.

@Shelley--My spirits were lifted buy the people who changed their ways!