Debt Testimonials – Personal Responsibility Beats a Bailout Any Day!

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Bankruptcy is NOT your only option!  Take it from me, and take it from the Hildebrandt’s…  personal responsibility beats a bailout any day!

I am a big fan of personal debt reduction testimonies and love reading about them.  In the past I haven’t posted them to DFA but today I just couldn’t resist.  I knew I needed to post this story once I received a 2nd email from a friend about the Yahoo article posted today.

A Proper Perspective on Debt

Russell and Kandy Hildebrandt have paid off $106,000 in high interest consumer debt in less than 5 years!  Thing is, their story is much like that of many others I have read.  They weren’t unbelievable spendthrifts, but were simply walking the same path as our leadership and most other Americans – then before they knew it were dealing with massive amounts of credit card and other high interest debt.

The big difference about this couple is… THEY DIDN’T FILE BANKRUPTCY!  That my friends is the key to this story.  Rather than take a bailout, Russell secured a 2nd job, his wife transformed into a Frugal Queen, and they resolved to work and sacrifice their way out of debt.  They did it the old fashioned way – they earned their way out.

Here is a snippet from a recent TwinCities.com article:

“For more than four years, Russell Hildebrandt has worked about 100 hours a week. He sometimes slept in his car between jobs because he couldn’t afford the gas to get back home. His wife Kandy Hildebrandt and their three kids went without new clothes and some months they weren’t sure where the groceries would come from. But because of their perseverance and sacrifice, the New Richmond, Wis., couple managed to pay off more than $100,000 in debt in less than five years.”

Sound undoable?  It probably does to a lot of people in our culture, but the thing is… a lot of times the best thing for us is the thing we least want to pursue.  Regardless of what we want, self sacrifice and personal struggle may be just what the doctor ordered!  It was for the Hildebrandt’s.

Motivation to help you with your situation…

“We did it. We made it. And there’s a sense of pride there,” Russell Hildebrandt said.

The Hildebrandts owed $89,000 to 11 credit card companies and about $20,000 to other creditors, including family.  The Hildebrandts maintain they weren’t leading a lavish life. Their debt accumulated slowly over 15 years and was compounded by medical bills. Up to a certain point, they were able to make the monthly payments. But as the debt rose, so did the interest rates.  Bankruptcy just wasn’t an option. It didn’t feel right and “it’s not our character,” Kandy Hildebrandt said.

“I always thought, ‘We’ll make it through this,'” he said. “But everybody hits a point.”

In early 2005 Kandy Hildebrandt reached out to the consumer credit counselors at FamilyMeans, a Stillwater-based non-profit.  They set up a repayment plan and followed it to a T, said Linda Humburg, a consumer credit counseling service counselor manager for FamilyMeans.  In fact, they were so committed to getting out of debt, they finished eight months ahead of schedule, increased their credit score and managed to buy a home. On top of everything else, they had a son two years into the program.  Humburg called them “dream clients.”

“They did everything we talked about,” Humburg said.  They found ways to increase their income and decrease expenses.  “If they didn’t have the money for something, they simply did without,” she said. “That’s what it really takes. That focus.”

What About You?

What are you waiting for?  If they can do it… you can do it!  All you have to do is find the resolve.  Now roll up your sleeves, get motivated, and get ready to destroy some debt!

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DFA is passionately dedicated to helping people break the bondage of debt and work toward financial freedom using biblical principles.



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1 Randy

I heard the story of the Hildebrants. Great story. But I also read about several miscarriages that she had. That is awefull, but why would anyone be trying to have more kids while $100K+ in debt??? I make good money, but won’t have a child until I know I can afford ONE. How about they buy some condoms??? Just a thought. RR

2 Robert Espe

An inspiring story, they are to be commended. Randy it is worth remembering that for some people not using birth control is a conviction every bit as important as getting out of debt.

3 Mom

Thank you Robert for your tactful reply to Randy’s comment. I was also in debt back in the late 1990’s. It was not as overwhelming an amount as the Hildebrants. However, I still felt overwhelmed and felt like my life was out of control. I consulted with an instructor at my local community college, one from whom I had previously taken a class on investing. He recommended GreenPath Debt Solutions. They are not one of those companies that make false claims about erasing your debt. Rather, they work with an individual’s current financial situation, and set up a reasonable payment plan. They negotiate this plan with the various creditor’s that are involved. They offer a course on money management, as well. It took me five years, but I paid off all of my debt, too. There is an enormous sense of satisfaction and pride that goes along with taking care of your financial responsibilities, rather than just bailing out with the bankruptcy option. I have since repaired my credit rating to the point where I was able to purchase a house back in 2005. I have one small credit card that enables me to do things like rent a car if I need to. Most car rental agencies will not accept debit cards. I do have some revolving, high interest debt right now, as well as some medical bills, but I have a plan to pay all of it off by the end of 2010, then apply the extra cash to my mortgage and pay that off in 15 years or less, thereby saving almost $50,000 in interest.

4 Matt Jabs

@Randy & Robert: The Hildebrandt’s, like other people I know (myself included) may be of the belief that the amount of children they have is to be left to God, not themselves – some may not understand this, but that is okay too.

@Mom: Your debt story is encouraging! I will cheer your debt elimination on as you do mine.

5 Chris K

@Randy: Since the Hildebrandt’s are from the Minnesota area, they are likely Catholic, which decrys the use of contraception. I can’t fault them for that, even though I’m Protestant.

What’s impressive about Mr Hildebrandt was his ability to stay focused on his debt free goal for four years. +100 hour weeks for +4 years is an insane amount of work.

I noticed that he had a 1 hour commute to work. I hope that they bought a home closer than that during the get out of debt phase since they were buying a home.

6 Paul @ FiscalGeek

I can’t imagine trudging through your debt for 4+ years, an absolute inspiration. Maybe I need to work a little harder myself :-).

7 Matt Jabs

@Chris K and Paul: No joke. It is an awesome testament to the “slow and steady” approach. Patience is key… that is one thing that each of us have to grasp. It’s not going to happen on 1 year (for most of us) so we just have to remember to steadily plot through.

I suppose financial management is similar to healthy eating… it’s not about “going on a diet” it’s about permanently changing the way you live!

8 BG

Can someone explain to me why not taking the bankruptcy was a good option for them? Assuming that they actually qualified and could have large chunks of debt forgiven, why not actually do that? Especially if it was medical expenses that pushed them over the top.

Our countries bankruptcy laws are founded on biblical principles.

It is obvious that the lenders didn’t even expect to be paid back, due to their increasing of the interest rates on the debt.

I guess some people truly are slaves to the lender, even when the door to freedom is wide open.

9 Matt Jabs

“Could someone explain why not taking bankruptcy was a good option for them.” Excellent question BG, here is the explanation:

Biblically, debts could only be forgiven by the lender, never a third party (such as government.) Now-a-days, it is very rare for the lender to forgive the borrower of their own accord based on their own righteous mercy.

Also, the bible instructs that the debts should be repaid, and can be forgiven only if the borrower is unable to pay. Obviously the Hildebrandt’s were able to pay, so this would not be an option for them… biblically.

Here are a few quotes directly from the Hildebrandt’s as to why they decided to take the route of repayment:

Kandy Hildebrandt said, “Bankruptcy just wasn’t an option. It didn’t feel right and it’s not our character.”

“We did it. We made it. And there’s a sense of pride there,” Russell Hildebrandt said.

They made their final debt payment on June 29 and Russell Hildebrandt was able to quit his second job. “I went outside at 5 a.m. and literally screamed as loud as I could, ‘I’m done!'” Hildebrandt said.

He’s enjoyed finally spending some time with his family and said it’s nice “to have a normal life” again. “I’m not proud of how I got to where I was,” he said, “but I’m proud of what I did to get out.”

I hope this helps answer your question BG, thanks for stopping by.

10 BG

Matt: The counseling service called them “dream clients”, and I agree with that, they were “dream clients” of the financial industry.

But to work multiple jobs, 100 hours a week, for years on end, sleeping in a car between jobs, going without clothes & food, and not able to see his family is insanity. If that amount of effort was required to repay the debt, then I would not qualify that as “able to repay” — and neither would any bankruptcy judge, I bet.

I’d like to know: at what point, in your mind, would a debt become “too much to repay”. Sacrificing like they did for 10 years? 20 years? his entire life?

It sounds like the Hildebrandt’s lenders really shafted them by raising the interest rates: and that is allowed by the rules we live in today, and so is bankruptcy. Bankruptcy is our protection from these predatory lenders, and bankruptcy is the reason lenders charge really large interest rates — it’s a balance.

If anything, the current laws lean more heavily on the lenders side than the Bible does. The Bible says to charge NO interest, and to also forgive the loans after seven years! (Deuteronomy 15)

Why anyone would willfully chose to go through this amount of suffering is beyond me, when the system is stacked so heavily in favor of lenders, and yet they ignore the one “out” that our current laws, and the bible, says they had.

Provers 27:12
The prudent see danger and take refuge,
but the simple keep going and suffer for it.

What they did is equivalent to building a house without a hammer: commendable (by the feat that is accomplished), but still dumb (effort wise).

11 Matt Jabs

The great thing about this is that we do not have to agree. Both personal finance, and Christianity are personal… so there will always be times when similar individuals approaching the same circumstance will not see eye-to-eye. 🙂

Cheers BG!

12 Jason @ One Money Design

I love to hear about this type of motivation to pay off debt. I think you have to hit rock bottom to get to that point. Rock bottom is the point in which you have no other option but to act and act quick.
For the Hildebrandt’s there wasn’t any other option in their minds but to sacrifice and fight to get out of debt. Sure, they could have filed bankrupty but again, that was pushed out of their minds. They had the intensity and focus that is required and that I often hear Dave Ramsey speak about on his show. I’ll definitely share this with others who I work with as a Money Map coach so that they can somehow begin to understand the intensity required. Sleeping in his car…I love it!Inspiring post!

13 Deanna Kramer

Hello: thank you for sharing the Hildebrandt’s story with your readers. I wanted to include the links to the organizations that helped them — FamilyMeans (the nonprofit organization that worked with them) and the National Foundation for Credit Counseling (the national organization that is dedicated to promoting financially responsible behavior and ensuring member organizations like FamilyMeans deliver high quality financial education and counseling services). These are REPUTABLE organizations that help people get out of debt in responsible ways. The Hildebrandt’s used the Consumer Credit Counseling Services program to pay their debts and gain control over their financial situation. SO, HERE’S THE URLs:

http://www.familymeans.org

http://www.nfcc.org
The NFCC provides referrals to certified financial counselors around the country, just click on the ‘find a counselor now’ link.

14 Steve in W MA

Not to be provocative, but Matt, if you take this statement at face value: “Also, the bible instructs that the debts should be repaid, and can be forgiven only if the borrower is unable to pay. Obviously the Hildebrandt’s were able to pay, so this would not be an option for them… biblically.”

then debts can only be forgiven after the debtor’s death and the depletion of their estate, never during their lifetime, since the ability to repay cannot be absolutely measured until the time of a person’s death, when all of their earning necessarily stops.

While I respect the Hildebrandt’s grit and can see this from both perspectives, I feel that they may have taken a moral injunction much too literally in this case. But kudos to their conviction and follow through, I’m sure they have a lot to be proud of from this accomplishment.

15 Steve in W MA

I was rereading this thread and thinking about debt forgiveness.

An acquaintaince of mine owes me about $125. I had told him a couple months ago that, given his income situation, I didn’t expect him to repay me except as he may be able. Later on, in my heart I have written the debt off and forgiven this money, as I have asked around and figured out that he is addicted to crack cocaine, which may kill him (he also has mental heath issues).

He comes to me every month with about $20 to repay the money, which I accept because he is so earnest about it and is so grateful to me for extending him small amounts of credit in the past, although it boggles my mind that he can do this while “supporting” a crack addiction.

What is my point? I’m not sure. But maybe my point is that I think it is the creditor’s obligation to have some reasonableness and compassion. In the first place, it is wrong to extend credit to people to a degree that shackles them unduly, and it it wrong to expect them to have to go to extreme hardship to repay their debts. That’s why the traditional banker had specific ratios that they obeyed when eveluating how much credit to extend. The Hildebrand’s lenders did not obey these strictures. And I feel that maybe lenders who extend unreasonable amounts of credit ought to recognize their culpability in doing so and forgive part of it when it becomes an unreasonable burden. Basically, they screwed up and didn’t do their job right. Doing their job right would have involved evaluating the lendee’s overall financial situation more accurately so as to avoid overlending. That is really how I feel about it.

16 Matt Jabs

Yeah… wouldn’t it be nice if this type of thought were ever to even enter into the banks cognition for one second!

If you’re talking about a small, hometown bank – yes, I can see it being a possibility. But a large multi-nation “bailout” bank… never, no way, no how.

And that… is why I am so picky about the banks I choose. The only large bank I have ever dealt with that seemed to have “pleasing their customers” as a priority – is ING Direct. Other than them, I only bank locally.

17 Jennifer

I just found your blog. Thanks for this encouraging post. There just may be hope for us…

18 Paul

There’s no doubt this can be done. Too many people consider bankruptcy when they only have credit card debt of say $10k. It’s just not right…you can turn your finances around.

19 Bob

People often use banruptcy as their first choice, but this should be used as a last resort. Don’t think that just because you have some credit card debt and are a little upside down on your home that this is your best option. Make sure to talk to your CPA or attorney.

20 Charles

Bankruptcy isn’t for everyone…I see people talking about filing bankruptcy for $10k-$20k in debt. This just doesn’t make sense most of the time.

21 Deb

I think they are terrific. I got into 18 k of debt and slowly paid it off a few years ago. They have learned a life long lesson. I don’t have a problem with bankruptcy if people learn from it. Sometimes it cannot be avoided.

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