It starts innocently enough. You don’t have cash to pay for that stunning sweater set so you put it on the credit card. You can’t pay the grocery bill with a check so you put it on the credit card. Electric bill? There’s always the local gemach.

The catch comes when the expenses grow and the credit card’s not being paid off each month. You need to buy a car or a home and there isn’t enough cash to make the down payment. Whether you’re borrowing from the bank from the credit card company or from gemachim you may be trapped in an endless cycle of financial debt.

Is there any way out of the mess? Although it may seem impossible there are families who have succeeded in defeating the debt monster using a combination of ingenuity determination and sheer hard work. Here are their stories.

Yitzchak: Holding Your Head High

Penny pinchers may shudder at Yitzchak’s story but he shares it without a trace of embarrassment. As a former kollel guy turned business owner he admits that debt never bothered him as a kid. “My parents were always in debt and so was I. I constantly owed $25 to this guy $45 to that one.”

The debt however refused to stay confined to small amounts. As Yitzchak’s family grew so did their expenses. Yitzchak and his wife Tova received some support early in their marriage which tapered off by the time their third child was born. Although Tova was working their income never managed to last the month. Yitzchak began looking for suitable employment in the greaterNew Yorkarea.

Researching his options Yitzchak decided to open his own photography business. This required a huge outlay of capital — equipment advertising a second car and more. But he took the plunge adding every purchase to his growing credit card debt and incurring some private debt too.

Yitzchak enjoyed the challenge of being his own boss and his business slowly gained momentum. But it needed to be fed more cash to maintain its growth. “I was tempted to throw in the towel a few times” Yitzchak says “but then I’d be back to the drawing board when it came to supporting my family. I decided to stick it out.”

After two years matters came to a head: Too much of their income was going towards the credit card debt and there wasn’t enough left for the business. Yitzchak realized there was no way he could retain the business while also maintaining his credit rating. He decided to funnel his efforts into the business and walk away from the credit card debt negotiating the payments for a fraction of the total amount.

“I found someone to help me negotiate with the credit card companies and we turned $50000 worth of debt into $10000 ” Yitzchak explains. “It was a huge load off my shoulders.”

Debt settlement meant that the family was left with zero credit rating and not a single credit card. For several months during the negotiations Yitzchak had to have large amounts of cash on hand to meet the settlement payments. “It’s not like the credit card companies say ‘Okay pay us when you want to.’ If you’re settling you need to have the money available when you say you will.”

The family cut back on unnecessary expenses like eating out and channeled all extra income like tax refunds into their payments. In addition to the credit cards Yitzchak owed some $15 000 in private debt which he paid back slowly albeit with a lot of juggling. But when it was over he says “I felt like a new man. I could walk into shul with my head up. I didn’t owe anybody money anymore.”

Cutting free of credit cards allowed Yitzchak to be responsible for his own bills and meet them instead of pushing them off. His business began turning a profit and now several years after the settlement he and Tova have started working on credit repair. “We don’t own a house but I don’t care ” Yitzchak says. “My business is doing well and I feel a sense of pride that comes from being self-supporting. Although of course it all comes from Hashem I don’t have to hide my face anymore. It’s a great feeling.”

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