What happened when I stopped making credit card payments

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When I was 25, I was working for a fashion start-up in New York, making $ 60,000 a year. Even though my monthly income was enough to pay the bills and save, I was spending on impulse, as most young people do. Oyster happy hours, trendy workout classes, leather jackets, impromptu trips to Mexico, and boozy parties were all slipped onto a credit card without any hassle.

A year later, I had $ 18,000 in credit card debt and the big monthly minimums took over me. I took out a low interest personal loan of $ 10,000 to consolidate my debt with monthly payments of $ 250. Of the remaining $ 8,000, I diligently made monthly payments of $ 600 to avoid accruing interest, even managing to pay off balances on a few of the cards. I learned a very expensive lesson and lived frugally with plans to pay off all the debts in two years.

Things went off the rails when I filed a sexual harassment complaint against a coworker in 2018. The small company I worked for did not have a human resources department, so the investigation was very poorly conducted. To prioritize my mental health, I ended up quitting my job without a back-up plan. Before I could even worry about rent and utilities, I was heartbroken by the impact of unemployment on the two-year repayment plan I had in mind.

I tried to negotiate a lower minimum monthly payment

I calculated the numbers and decided to continue paying my personal loan, but I couldn’t pay the rest of my debts. I called the credit card companies to negotiate a lower, more manageable payment, but my request was denied because I had no proof of income.

“But that doesn’t make sense,” I begged the operator over the phone. “I want to make smaller payments just to keep the account up to date.” I was puzzled. I thought I had done everything right. I took the initiative and contacted before the payment due date and everything. I was devastated and feared what an imperfect credit score would do for my future.

To make matters worse, it was really hard to find work in my mental state. The stress of sexual harassment at work, the messy investigation and this drastic change in lifestyle really took its toll. Even though I was late on payments, I ended up putting groceries and basic needs on credit cards in desperation. Over the next two years, I stopped paying my credit cards, paying off only my personal loan.

I fell into deep depression as creditors blew up my phone

Eventually my accounts became overdue and the credit card companies kept calling me. Every time my phone lit up with a random 800 number – or worse, a blocked number – I was nauseous. I got to the point where I was afraid to open my mail or answer my phone. I ignored calls from worried friends and family because I was too scared to admit I was in trouble.

Meanwhile, late fees and penalties have snowballed. At one point, the credit card companies were charging me $ 1,100 a month after late fees and interest. For me, $ 1,100 covers the rent, utilities, and meager groceries for the month. But for those anonymous credit card companies, $ 1,100 was a drop in the ocean.

My debt was sold to a collection agency and calls poured in from new 800 numbers. The truth was cold: the credit card companies would rather sell my debt (plus late fees and interest) instead of working. with me – a neurodivergent queer and an unemployed trans person of color – on a manageable payment plan. It’s more profitable for them, and they didn’t care at all about me or my well-being as long as they could continue to line their pockets.

I’ve never felt so dehumanized in my life

It seemed like no use telling people what was going on with my credit because I couldn’t stop blaming myself for my situation. I couldn’t even tell my own partner about my debt. One fall afternoon in Brooklyn, I was waiting for my partner to pick me up from my house when I suddenly burst into tears on my front porch. She begged me to open up to her.

I told him everything – the failed negotiation, my crippling fear of opening my mail, and my intense feelings of guilt and shame about missed credit card payments. After my arrogant confession, I was really afraid that she would break up with me. Who would want to be with someone who can’t handle their finances?

Instead, she held my hand and said compassionately, “I’ve been through the same, baby.” I was stunned. She shared her story with me, and our experiences were almost identical. She too felt completely dehumanized by the credit card companies. “The fact that they harass you for money that they don’t really the need really isn’t about you, “she said.” You’ve done your best.

I decided to take care of myself

After coming out of my self-imposed isolation, I found a peer support group with other people of color struggling with debt. Together, we created Daily Affirmations to help cope with the emotional weight of debt: I am not my debt. I am a good person regardless of my credit rating. I can always start over. I am talented and valuable no matter how much money I owe. We deserve financial freedom. We deserve rich communities and easy lives.

I saw first-hand how debt crippled communities of color in particular. Like me, many other people of color have chosen to risk their financial stability to prioritize their mental health in workplaces marked by racial and gender discrimination.

When we asked our parents and loved ones for help, they were more than happy to help. But instead of tapping into generational wealth like white families do, our parents dipped into retirement funds and reduced their own basic needs to deal with our financial emergencies. Knowing that I was not alone made all the difference. It was heartwarming to be surrounded by other people of color who were working for financial freedom.

With renewed confidence, I began to work more as a freelance writer. I wanted to rush to pay off all my debts immediately, but my peer support group advised me to spend some money on myself first. They even suggested that I take a vacation to reward myself for all my hard work.

I reluctantly followed the advice of my friends. I booked a cute Airbnb at Joshua Tree for a writer’s retreat, splurged on new shoes, booked a massage, and popped in to the organic grocery store. Little by little, I started to feel more like myself again.

I realized that I had to myself a big debt: a debt of gratitude, kindness, confidence, self-esteem, and courage to achieve the things I really want in life. And this debt is bigger and much more urgent than a few thousand dollars I owed a credit card company that doesn’t even think of me as a whole person.

I pledge to establish a new relationship with money

Now that I am back on my feet financially, I have put in place manageable payment plans with collection agencies. I pay a total of $ 175 per month on old credit card debt and regularly call agencies to see if I can negotiate a lower monthly payment. Instead of prioritizing paying off all the debts at once, I put more effort into making room in my budget for fun. I plan to pay off the debt completely in five years.

Money doesn’t define me, but I can’t deny that money can give me a better quality of life. I don’t regret the leather jackets, the jokes exchanged around the oyster happy hours and those beautiful trips to Mexico – I deserve to have good things, and I always will. I first had to forgive myself for my debt before taking steps towards financial freedom.

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