Cheree Miller has a cautionary tale for anyone in debt -- and for anyone without an emergency fund.
Miller, 52, lives in London, Ark., (population 925) with her live-in, college-attending son, Nick, and is the caregiver to her 47-year-old sister, Tina, who has Down syndrome. Until last December, Miller, right, was also taking care of her 83-year-old mother, Millie, who passed away from complications due to Alzheimer's disease. She works about 19 miles away, in Russellville, managing a two-doctor veterinary practice.
And last year, Miller was buried in debt -- $30,674.60 of it, to be exact.Also last year, about this time, we wrote in WalletPop about a contest that a nonprofit credit counseling and debt solutions company was holding to help one person pay off their debts. As we said then: "It's a gimmick to gain attention for their company, but if you're the one who wins, who cares?"
Miller agrees. But she cares. Because she won the contest's $10,000 prize.
The same nonprofit credit counseling agency -- InCharge Debt Solutions -- is holding the contest again this year (for those interested in entering, click here). And while it may still be a gimmick for free advertising, there's nothing wrong with that if it benefits someone, just as it benefited Miller.
"Winning the contest changed my life," says Miller, who was required to use the money to pay down her debts. To win the $10,000, she had to take a free personal finance course on the nonprofit's web site called Mind Your Finances; she also had to make a video, explaining how she got into debt. From there, the public voted for the five people they felt were the most deserving of winning, and the InCharge Debt Solutions' staff chose the winner.
It's easy to see why Miller was chosen. She didn't exactly get into debt by, say, gambling or hitting the mall every weekend and running up unnecessary charges on her credit cards. In fact, she probably never would have fallen into debt if it hadn't been for her mother. You see, Millie Miller -- fueled by her Alzheimer's -- began making a lot of erratic and impulsive financial decisions.
Just 11 years ago, Miller was divorced and living with her son, sister and mother in the San Francisco area. She would arrive home from her job at another veterinary practice and listen to the odd messages left on her answering machine from several toll-free numbers. It soon became clear that the calls were about money these companies were owed -- for things Miller hadn't bought.
But her mother had been buying -- shopping after seeing ads on TV for everything from antique dolls to gifts from the Bradford Exchange (you've probably heard of them; they often advertise decorative plates and other collectibles on TV). By the time Miller realized what had happened, her mother -- who every month received a $600 check from Social Security -- had amassed $30,000 in debt.
So Miller took over her mother's finances and started the long slog of paying off $30,000.
By 2004, Miller had moved -- with Nick, Tina and her mother in tow -- to Arkansas, to start work at a new job. By this time, she had paid off $25,000 of her mother's debt, with the help of the Social Security check and whatever she could spare from her own paycheck. But there was still $5,000 left.
Miller took out a cash advance with a Wells Fargo Visa card and paid off the debts, figuring it would just be easier to kill off the rest on her credit card. "But it went downhill from there," Miller says.
For starters, some family emergencies cropped up. Nick totaled her car. Then Miller's house had plumbing problems, and the heating and air-conditioning unit needed replacing. The $5,000 debt on the credit card began climbing. So did the debt on some of her other credit cards. And Miller took out some special financing to pay for her heating and air-conditioning problems.
Meanwhile, Miller admits that she contributed to her eventual downward financial spiral. "I spent money I shouldn't have," she admits. "Too many meals out, or I'd splurge on something too often."
And if at first Miller's debt seemed manageable, eventually it was clear that it wasn't -- like the time she found that one of her creditors, a debt collector, had been granted access by a court to raid her bank account. She went to bed one night with $2,000 in her account and woke up the next day to discover it was $19,000 in the negative.
The bank soon reset the balance to zero, and the creditor wound up with just $2,000, but the fun was just beginning. Every check and debit purchase that Miller had made bounced, and Miller not only had no money, she owed the bank a ton of overdraft fees, not to mention the money she owed to anyone she'd written a check to. By this time, she found herself owing more than $30,000, the same amount -- coincidentally -- that her mother had accumulated.
"It was pretty humiliating," says Miller, "but it was about that time I heard about the contest."
Miller decided to enter and was soon in an even more humbling position. Because she wanted to see herself reach the final stage where the InDebt judges would look at her video, Miller started telling everyone she knew about her video -- and thus, her financial problems. "I had always been private about this sort of thing," says Miller. "Nobody in my family knew about my financial problems, but I began telling everyone -- family, friends, my co-workers, my boss. My son was even texting his friends."
The video that Miller made can still be viewed on YouTube. Miller learned almost a month after entering that she had won. Almost another month later, InCharge sent $10,000 to Miller's creditors. One credit card was paid in full, and a big chunk was knocked off another one. It wasn't enough to cover all her debts, but it was enough to get Miller on the right track.
That was last June, and she still owed a little more than $20,000. Today, thanks to putting as much money as she could toward her debts and, after collecting her tax refund and using that money to negotiate down some debts with other creditors, she has just $4,000 left to pay off. Ironically, it's still with the Wells Fargo Visa that started it all.
If Miller has learned anything from this experience, she says that it's to have an emergency fund. Miller tithes to her church first, but after that, she puts money into her savings account -- and then pays the bills. If she has a financial emergency or some other need and doesn't have enough cash in her checking account, she dips into her savings and doesn't use a credit card.
She's also a convert to negotiating debts with creditors. "I almost talked myself out of it, but by the time you get to that point, you're usually just paying service charges and interest. The principal is usually paid off," she says, and so she would recommend anyone who can negotiate, should.
"You'll find all those things on the InCharge web site, or in anything Dave Ramsey writes -- any financial expert will tell you that," concedes Miller. "I just never did it until now."
Geoff Williams is a regular contributor at WalletPop and AOL Small Business. He is also the co-author of Living Well with Bad Credit and C.C. Pyle's Amazing Foot Race.
Woman Uses $10,000 From Debt Solutions Contest to Get Back on Track