Using the secret to get out of debt. From this point forward don’t think of it that way. Think of it as using the secret to get financial freedom. I will admit that I am no stranger to financial difficulty. At least twice in my life I had racked up over $20,000 in debt. Which was rather astonishing considering the fact that I didn’t make $20,000 a year at that point. This told me three things, 1) I needed to change my lifestyle as I could not afford it. 2) I need to learn how to manage my money better. 3) I needed to get rid of this debt.
Anyone who has ever spoken about The Secret, will tell you that if you focus on debt you’ll attract more. It will not matter if you’re focusing on getting rid of your debt or attracting more you’re focusing on debt.
So, I examined my lifestyle, I wasn’t throwing wild parties. I didn’t have expensive clothing, I looked at where my money was going. When I calculated it all up how much I was spending on different things it dawned on me. I was spending most of my money on my girlfriend. It turns out when I’m in love or think I am, I will spend hoards of money on the woman I adore. Well that was a startling shock to my system. Thankfully I’d just broken up with my current girlfriend. But now I was living in the financial aftermath.
I decided that until my finances are sorted out, I needed to do the following three items. 1) I needed to stay single, so I didn’t spend any more money but I didn’t have. 2) I needed to set up a way that my money could not be easily spent. 3) I needed a way to chunk down what I owed or I would never be able to pay it all off.
Being single for a long period, isn’t all that difficult. I’ve gone lengths of 5 to 6 years between girlfriends in the past. So with that out-of-the-way I was able to focus on number 2.
I set up several bank accounts, with my bank, one for savings, one for rent, and one for everyday transactions. Since I get paid every 2 weeks, it made more sense to separate out half of my rent from the first day and put it into separate accounts I couldn’t spend it. I made sure that the new account was not accessible from my debit card. Hence no way of spending my rent. I also set up an automated transfer so my rent part was automatically transferred to my rent account.
At this point I was still making just over the minimum payment on my credit cards, so I wasn’t really getting any traction. I prayed I would win the lottery, I prayed for a lot of things, mostly money. After a long period it didn’t come. My local radio station had started playing advertisements of a trustee/bankruptcy firm. I didn’t really consider going bankrupt as an option. So it was basically just background noise.
I decided to apply the laws of attraction also known as the secret to my problem. I would daily visualize myself being financially secure, not having creditors calling me all the time, sending me e-mails, sending the mail, calling me at all hours of the day. Sometimes even leaving threatening messages on my answering machine. I started thinking about how grateful I was with what I had, I had my health, I had my job, I had friends I could talk to. I had my wits, which sometimes weren’t always there. So there I was visualizing being financially secure, being thankful for everything I had, I started imagining me being prosperous and financially secure and happy. One day while I was feeling a little down my coworkers asked me was wrong. I explained that it was financial problems, he exclaimed that he knew exactly what I felt, and went into the history of his financial issues. He explained that he was paying it all back by something called a consumer proposal. The consumer proposal is where your trustee sits down with the people you owe money to and hammers out the way of you being able to pay it all back, without it accumulating any more interest or penalties. They also said that sometimes they will even decrease your total payment because you’re willing to pay them back. He said that I should contact the company that he used.
When I was growing up, as I stated before, we were poor. I know that both my mother and my father had at one point declared bankruptcy, this is not an option I wanted to follow. So a consumer proposal seems perfect. I could pay it back slowly and start working on getting myself out of debt in fact I would be out of debt I just have one built to pay. I was starting to feel pretty good about this I knew that monthly, I was paying at least $900 towards my debts. My rent was less than that. So I could probably make the monthly payments to consumer proposal without fear.
Let me state the reason I didn’t want to do bankruptcy, I had heard horror stories of them coming to people’s houses and taking away their possessions. I’m a single guy, I’m not rich, everything I’ve got I worked hard for in fact none of it was bought through the credit cards. Then there was the way people look at you when you told them that you declared bankruptcy, like you were some sort of social pariah, like you had failed miserably at Life101, or that you’re just a deadbeat no good person. This is how I was raised to think, of those who declared bankruptcy. Even my own parents who had to declare bankruptcy had that view. It was the last thing I wanted to do.
So with my consumer proposal plan tucked firmly in my mind, I went to go see a trustee. I’m met the trustee, thankfully the first consultation was free. He explained to me how the consumer proposal worked, I would pay a part up front, and then make monthly payments until it was gone. In essence I paid the trustee company and they settled my debt. We looked at what I owed, how much money I made, my bills and expenditures. He paused for a moment and then said something that almost knocked me to the floor.
He explained that it would take roughly 19 years for me to pay off what I owed based on what I earn. This is mostly because the interest had accumulated so much that the 900 I was throwing at it was barely covering the principle. I could not understand how that could be. Wow 19 years, at that point I was 43 I did the math quickly and I don’t know if I want to finally be debt free at the age of 62. It would give me three years to retirement, I’d have no savings I would end up quickly going in debt again just to survive and live.
At this point the trustee said to me, there is another option. I already knew what it was. Bankruptcy! My heart sank, I was being offered a way out that would leave me feeling worse than I already felt about my situation. As he explained the option I sat there and listened. I would have to come up with $2000, I would have to do a monthly statement showing any money coming in and what I’m spending going out. I would not be able to have any sort of credit or credit cards for 7 years. I would not be able to get a house loan, I would not be able to get a car loan. No lines of credit, nothing. I asked about my belongings, he asked what I had, I told him what I had. He said not to worry they couldn’t take what little I had. Well, feeling a little insulted but thankful that they couldn’t take what I have left. The trustee said that he couldn’t suggest one action or the other that I was to weigh the options myself and choose.
To be honest if it wasn’t going to take 19 years I would’ve gone to consumer proposal. I called the trustee about a week later and said let’s go with the bankruptcy option. What do I need to do now? I said. He explained that I should drop off credit cards to his office (surrender them), and not make any further payments to them. I said won’t this cause them to call me and yell even more, he said maybe for this month but after that they won’t.
I was nervous as heck during the entire procedure, that something would go wrong and my bankruptcy would be rejected by the courts, which can happen. If you’re in that boat, you can always re-apply it’s not the end. Each day I would visualize myself being finacially secure. My bankruptcy was not rejected I was cleared of those debts. I still all would have preferred to pay them off. Since the. For my bankruptcy which is one year has passed, I am technically no longer bankrupt however I am also not able to get any loans or credit cards or the next 4 or 5 years.
During the time of the bankruptcy, I kept envisioning and thinking of better ways to handle my finances, curb my spending, to dealing with spending recklessly on girlfriends, and what was I going to do when I needed a credit card!?
I found several great online resources, one example is lifehacker.com, where they have some great ideas on money and spending. So I started putting away any money I had into my new bank account that had open during the bankruptcy. I’ve lived a rather meager existence since. I repair clothing instead of throwing them out. I make my lunches and take it to work. I don’t eat out or have take out or delivery as often as I used to. I don’t now how it’s possible but in the last two years between being very careful with my money, and having a bit of unexpected income, I have managed to amass more than what I owed, over those two years ago. I have an RRSP through my work, and a tax-free savings account that when you combine them are equal to what I owed. Not to mention I have several investments, small ones, savings bonds, silver as well as foreign currency accounts.
So what do I do for a credit card, well that’s easy I found by looking and reading. (Who knew that you actually had to read to learn things about money, and the only way to become good with money was to learn how to use it. Because it’s a tool.) I learned by reading the back of the prepaid credit card packages that all of them with one exception charge a fee if the card still has money on it after the first month. So, in essence they charge you a service fee to hold the money you give them. They also charge you a fee to buy the card. The only one I’ve found that didn’t have a monthly fee, or any other charges associated with the card other than the activation fee was American Express prepaid. Now I know that not everyone uses American Express, but 99% of the online services that I would need a credit card for takes American Express. Your best bet is the hundred-dollar card they charge about six dollars for the card. They have smaller cards like the $50 but they charge four dollars for it. So if you bought two you be paying eight dollars instead of the six.
Also learned another neat trick, if you withdrawing money to have cash on hand, take a larger amount from the bank, then you’ll need if you have it in there. The reason for this is, if you withdraw $100 and they charge you a three dollars service fee that’s 3%. If you withdraw $20 and they charge you three dollars as a service fee, that’s 15%. No bank gives you 15%, so why should you give it to them.
So in essence, I’m totally debt free, by not being able to get a real credit card, I’m not allowing myself to get real debt. I still do not have a girlfriend and maybe that’s a good thing for now. But when people say to me I don’t know how I’ll ever get out of debt. I tell them not to focus on debt, and I tell them my story. Now keep in mind I am a single male and I don’t drive I don’t own a home, so for me going bankrupt is probably a lot easier than people who have a family and a car and a house. But I still tell them that all this has happened because I was using The Secret to get out of debt. You can do this also, if you don’t think you’re brave enough, you’re probably not. But sometimes you need to close your eyes and take that step forward. Having faith that it is the right decision. No one should ever feel crushed under the weight of debt. Life gives you lessons, if you pay attention you’ll know what to learn and how to learn. This is how I learned how to manage my money better. No I am not a financial wizard, but I know where my money is, where it isn’t, and what it can do for me. You will to if you are using the secret to get out debt.