After my divorce in 2000, I went through what you might call a depression, rebound, mid life crisis, etc.
For about three - four years, I was a total non productive schmuck.
I've chronicled my debt situation in previous post. I owed $45,000 in credit cards. I owed about $10,000 in back real estate taxes and I had to have at least $15,000 in other related business debt.
You know what changed for me? I had a conversation with a collector about my delinquent real estate loan on my business property.
Him I don't understand why your payments are that delinquent they're only about $600 a month.
Me Look, I'm so far in debt I just pay what I can when I can.
Him You know what I also don't understand, you've got a property worth at least $150,000 and you only owe about $70,000 and you're just going to let the thing go in foreclosure.
Me Let me ask you, are you willing to roll up all of my other debt so I can get my arms around this?
Him You're kidding me right?
That night, I went to my local watering hole for my attempt to forget the whole thing. When I went to use one of my cards to pay the tab, it was rejected.
So I used my debit card only to find out that I had a whole $8.91 left in my account.
It was that night that I started taking my debt situation seriously.
After six years, an extra job and a lot of elbow grease, I believe I have a net worth in excess of $300,000 and my debt consists of nothing more than the what little mortgage I have left. My credit score has gone from about 550 to now around 720.
But see, if I were the federal government, I would have just extended my debt ceiling by a couple of hundred of thousand and we all would have been better off. Right?
But how is the federal government any different? When will the feds ever take their debt seriously? Simply borrowing more doesn't make the existing debt more collectible.
I realize that I'm no Wall Street Hedge fund manager but maybe these guys will start to take the debt seriously if they cannot borrow anymore.