It's no secret that the troubled economy has done damage to everyone's
wallet, but coupled with a divorce, 17 credit cards and high interest
rates, local businesswoman Dawn Warfield found herself way in over her
head.
Warfield's trouble began after she opened the second location of her Drive-In Movie Store in 2003. The store turned out to be too close to the first location which made Warfield feel as though she was paying double rent. Despite the problems with the second location, Warfield's ex-husband wanted to keep it up and running. In order to keep up with mounting bills, Warfield opened credit card after credit card until eventually she was paying 17 credit card bills per month.
"We were living beyond our means. We would order $100 bottles of wine with dinner. We'd charge our groceries. I learned that if at the end of the month you can't pay the credit card bills, you are living beyond your means," she explained.
In just a matter of six months, Warfield's debt grew from $38,000 to $80,000 after buying out her husband's share of the Drive-In Movie Store and inheriting debt from the divorce. After buying out her husband from the company, Warfield closed the second location and put her focus into the South Broadway location. However, road construction began in summer 2008, which "annihilated business," she said.
"Business went down 40 percent in the first month of construction alone. I knew I was drowning so I called each credit company and asked them to lower my interest rates. Was it really necessary for them to be charging 24 percent interest? But they wouldn't work with me," she said. "I began to think that filing bankruptcy was my only other option."
Then Warfield learned of a company called Money Management International. At first she was incredibly skeptical so she hired a lawyer to help her out.
"I knew there were horror stories out there but I gave it a shot," she said. "When I spoke to Bank of America, they wouldn't budge on a 20 percent interest rate. When Money Management International talked to the bank for me, they dropped the interest rate to just two percent. They negotiated with all of my credit card companies so in the end I was paying one bill with a low interest rate."
Since joining Money Management International, Warfield has seen her debt cut in half and has paid off 13 credit cards.
"I pay $40 a month to Money Management International and then my consolidated bill and it has been totally worth it to me," she said.
Through MMI, Warfield has the option to lower her payments when a card gets completely paid off or the extra money can go toward paying extra each month. She chose to do the latter and is on track to have her entire debt paid off in three years versus five years. The program also offers websites and online tutorials to learn better money management and tips on how to wisely spend money.
"Going through this really made me realize that in a past life, money was no object; it comes back to haunt you though," she said. "I also know how important it is to be on the same page as your spouse or business partner. Also, don't use credit cards unless it is absolutely necessary. You can't use a credit card to get out of debt; it's an endless cycle."
Today, with more control over her finances and business picking up at the Drive-In Movie Store, Warfield said life as she knows it is much different now. It has to be in order to teach responsibility to her 9-year-old daughter.
"I give her an allowance now. Instead of buying her something when we go shopping, I tell her she can get whatever she wants because she has her own money. This has helped her understand the real value of money and how to spend it wisely," she said.
While talking about getting into debt and the troubles that come along with it may be an embarrassing topic for some, Warfield says that if she helps someone who hears her story then it is worth telling.
"There are so many people out there in the same boat as I was," she said. "If I can get back in control and on my feet, anyone can. You just need to stick to a plan that works."
"We were living beyond our means. We would order $100 bottles of wine with dinner. We'd charge our groceries. I learned that if at the end of the month you can't pay the credit card bills, you are living beyond your means," she explained.
In just a matter of six months, Warfield's debt grew from $38,000 to $80,000 after buying out her husband's share of the Drive-In Movie Store and inheriting debt from the divorce. After buying out her husband from the company, Warfield closed the second location and put her focus into the South Broadway location. However, road construction began in summer 2008, which "annihilated business," she said.
"Business went down 40 percent in the first month of construction alone. I knew I was drowning so I called each credit company and asked them to lower my interest rates. Was it really necessary for them to be charging 24 percent interest? But they wouldn't work with me," she said. "I began to think that filing bankruptcy was my only other option."
Then Warfield learned of a company called Money Management International. At first she was incredibly skeptical so she hired a lawyer to help her out.
"I knew there were horror stories out there but I gave it a shot," she said. "When I spoke to Bank of America, they wouldn't budge on a 20 percent interest rate. When Money Management International talked to the bank for me, they dropped the interest rate to just two percent. They negotiated with all of my credit card companies so in the end I was paying one bill with a low interest rate."
Since joining Money Management International, Warfield has seen her debt cut in half and has paid off 13 credit cards.
"I pay $40 a month to Money Management International and then my consolidated bill and it has been totally worth it to me," she said.
Through MMI, Warfield has the option to lower her payments when a card gets completely paid off or the extra money can go toward paying extra each month. She chose to do the latter and is on track to have her entire debt paid off in three years versus five years. The program also offers websites and online tutorials to learn better money management and tips on how to wisely spend money.
"Going through this really made me realize that in a past life, money was no object; it comes back to haunt you though," she said. "I also know how important it is to be on the same page as your spouse or business partner. Also, don't use credit cards unless it is absolutely necessary. You can't use a credit card to get out of debt; it's an endless cycle."
Today, with more control over her finances and business picking up at the Drive-In Movie Store, Warfield said life as she knows it is much different now. It has to be in order to teach responsibility to her 9-year-old daughter.
"I give her an allowance now. Instead of buying her something when we go shopping, I tell her she can get whatever she wants because she has her own money. This has helped her understand the real value of money and how to spend it wisely," she said.
While talking about getting into debt and the troubles that come along with it may be an embarrassing topic for some, Warfield says that if she helps someone who hears her story then it is worth telling.
"There are so many people out there in the same boat as I was," she said. "If I can get back in control and on my feet, anyone can. You just need to stick to a plan that works."
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