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Joshua Hoyt resolved to make a better 2012.
Next month Joshua Hoyt plans to do something radical: if all goes well, he will pay off his credit card debt. It’s the ultimate financial resolution for 2012, to kick a debt habit that, to put it mildly, has many people feeling trapped.
I met Hoyt, who is 34 and a school psychologist, this fall while reporting this story about a debt collector. Hoyt was, I discovered, a walking, talking summary of our downturn – a human economic barometer. He explained to me that a few years ago he’d been a picture of middle-class happiness, complete with a college degree, a wife, four kids, and a deal to buy a house in Arizona – until his finances fell apart.
The first thing to tug at his happy picture was the house. The housing market tanked, and Hoyt realized they wouldn’t be able to afford the mortgage on his salary so backed out of the deal.
But even without the house, Hoyt and his wife were hampered by debt. He had student loans to pay back, and they had relied on credit cards when he did unpaid work while earning his counseling degree. They had also put over $10,000 on a credit card to fix up the house they weren’t able to buy.
Hoyt and his wife cut back but realized they weren’t making enough to pay all their bills. Even with an undergraduate degree in education and a masters in counseling, he couldn’t find a job in his area that paid more than $36,000 a year. They moved to Utah so his wife could go to school and also earn a degree, presumably the path toward earning more. But that meant taking on more student debt. Plus he found only part-time work after the move.
Soon enough, they were running out of money. To anyone who’s fallen down a deep debt hole, the following will sound familiar. Hoyt started making minimum payments on their credit card bills, and the balances skyrocketed. After a few months that were punctuated by constant calls from creditors, he found himself choosing between paying credit card bills or paying to keep the electricity on. He chose the latter.
Hoyt looked for someone who could help him find a way out of his credit card debt. He found a company that said it could help him consolidate the debt and negotiate it down to an amount he could tackle. He saved up $2,000, but the company ran off with the money and then went bankrupt.
Hoyt turned to another company that also said it would negotiate down the debt, and it seemed less sleazy. Hoyt signed up with that one and committed to a payment plan. Unfortunately the company didn’t hold up its end of the bargain and failed to make a payment to a collection agency. Hoyt called the agency himself and made the payment. He tried calling his other creditors, too, although one refused to talk to him. He asked the collection agency he’d called to negotiate for him.
Hoyt and his family have been directing all their resources toward getting out of debt. They don’t see movies. They don’t use air conditioning. They keep the thermostat low. They make glasses, shoes, and clothes last as long as possible. This year Hoyt needed a root canal and crown. Without the $1,600 for that, he had five teeth pulled instead.
This takes a toll on a young dad. “I always wonder why or what could I have done differently,” he says. He has a new perspective on poverty. “One of the misconceptions of people like me who get into trouble is that we wanted to get into trouble. You know, the misconception is that people are poor because they’re lazy.” He doesn’t seem that — at night, after working, he puts his kids to bed. He watches some TV with his wife. Then he blogs at theforsakenpetal.blogspot.com. He has written a fantasy novel he hopes to sell.
It doesn’t seem fair that anyone should get teeth pulled to pay back the likes of Bank of America or JPMorgan Chase, nor that banks would refuse to work with someone to reduce their debt until it reaches the point of default. It’s not fair that crooks prey on people who are poor, nor that lenders make debt seem painless and risk-free, nor that people like Hoyt are held strictly accountable for their poor decisions while people in positions of power are not. It’s not fair that an entire generation is getting slammed nor that members of Congress do not relate. “Regrettably we kind of have the sentiment in the U.S. that if you work hard it will all work out, and I don’t think that’s always true,” says Hoyt.
But in his case, it might work out. He is controlling what he can. This January, Hoyt will pay off his remaining credit card debt. His wife will graduate with her bachelors in May. They will still have student loans to pay off, and they’ll still need higher-paying jobs. But they’ve resolved to make a better 2012.