Do it… Just do it.
Feeling the sticky breath of the credit monster on back of your debt-weary neck? Just do what others have done to slay the over-budget beast:
Cut up your credit cards.
Easier said than done, huh? Well, maybe it’s time to call the professionals.
Consumer Credit Counseling Services (CCCS) of Austin, a division of Child & Family Services, is a local nonprofit organization that offers counseling on topics like personal and family budgets, credit problems, and debt management. There is no charge for their counseling; depending upon the case, it can be done in person, on the phone, or through the mail. Currently, they are serving a client base of over 2,000. They also offer seasonal workshop series, addressing problems to help consumers avoid over-spending during stressful financial times, like the end-of-the-year holidays, trips, summer vacations, and back to school.
So when does the cutting happen? If clients decide to make the commitment of enrolling in CCCS’s Debt Management Program, one of the first things that happens is the cathartic cutting of the cards. The program is simple:
Set Up an Appointment With a Counselor
The counselor and client review current budget limits, constraints, and allowances, then determine a realistic debt management goal.
Determine a Realistic Budget
Together, the client and counselor work out a monthly budget, including a monthly payment for debt consolidation. “We try to adjust to make the debt management fit within the client’s current ability to pay. From there, we work together to make it possible for them to pay off their debt,” according to CCCS director Lonnie Williams.
Commit to Not Buy on Credit
Once the client signs an agreement and cuts up his or her credit cards, the counselor works with the credit card companies and debtors to modify the original payment agreements. “We negotiate modifications to the original payment plans. It’s a completely volunteer program, so the credit card companies don’t have to negotiate at all,” says Williams. But when the companies do (in this writer’s experience, more often than not, they do), modifications might include changes in the interest percentage, lower monthly payments, and/or a cancellation of late fees. From here a framework is made on which to create a realistic monthly budget and a realistic time frame in which to eliminate debt.
Cut Up Those Cards
Together, the client and counselor cut up all of the client’s credit cards. All of them. It’s a harrowing, yet exhilarating moment.
Make Monthly Payments
For a small clerical fee to cover CCCS’s expenses, the organization consolidates the debt into lump monthly payments and mails the sums to the credit card companies from their office. The client still receives monthly statements, but CCCS does most of the work and erases all of the headache of sending out separate monthly bills.
Stay Debt-Free
This is the most difficult step, but also the most edifying if followed through. Clients make agreements to not use credit cards. At all. It’s a radical concept for those who come in with 10 or more credit card companies on their backs. It’s a challenge for clients, but CCCS has workshops, sessions, and series to combat the temptations and problems that may arise.
“Recidivism is low,” says Williams. “I would say that it is not even one percent of those who complete the program.” And when it does happen, according to Williams, “It’s usually due to outside circumstances, like the death of a spouse, a major accident, disability, or something beyond their personal control.”
CCCS has offices all over central Texas. Their Austin office is at 1221 W. Ben White. Call for an appointment or more information between the hours of 8:30am and 5pm, Monday through Friday, 447-0711.
— Kate X Messer
This article appears in December 19 • 1997 and December 19 • 1997 (Cover).