The illustration accompanying yesterday's story about the couple that had drifted into debt contained an erroneous figure. The couple's monthly expenses should have been $1,795.
For two weeks, the telephone has been quiet.
The constant, harassing calls that awakened the baby and left Paul C. angry enough to want to smash the telephone receiver against the wall have stopped.
For Paul C. and his wife, a young, white-collar couple living in a three-bedroom house in Wheaton, the silence is the first positive sign since almost a year ago when they first realized how close they were to personal bankruptcy.
Paul C. and his wife had done what hundreds of thousands of other American families have done. Over the years, they had slowly drifted into more debt than they could handle, becoming the easy and willing victims of instant credit.
Then they fell over the edge.
Paul C. is not his name. He agreed to talk about the details of his finances and his efforts to struggle out of debt on the condition that his name not be used.
His story is an increasingly common one, according to consumer credit counselors here and in other cities. The counselors are seeing the fallout from the tremendous expansion in consumer credit that has fueled inflation and now provoked credit controls.
In fact, what is chilling about Paul C.'s story is how ordinary it is.
For Paul C. and his wife were not living a life of excess. Nor did any sudden crisis create their problems. Simply put, they lived up to their income, with little set aside in savings. That was all right until a new baby came.
With the baby and a two-week loss of income to Paul's wife came just enough financial strain to send the house of plastic cards tumbling.
"We started sinking a little bit and started grabbing here and there," said Paul.
First they used what few hundred dollars they had in savings. Then they turned to the lines of credit that had come unsolicited in the mail over the years.
"We felt comfortable," before the crisis, said Paul. "We knew we were scraping to make ends meet, but we knew we had money in credit. We knew if we got in a pinch we had money -- we had that clout in our pockets," he said.
That was before the additional debt and the finance charges piled on top of the couple's original debts to the point that they realized they could no longer handle it.
"I sat down with my wife and said -- hey, we're in trouble," said Paul. "It was an upsetting discussion."
At the time, the couple was earning $42,000 and taking home approximately $1,800 a month. Paul works in construction and his wife works in purchasing for a major D.C. firm. With the cost of child care for their daughter, their basic expenses totaled about $1,700 per month. "We had about $80 to $90 a month to play around with," said Paul.
The basics include $458 for mortgage and property tax payments, $200 for child care, $136 to pay back a home improvement loan, an average of about $175 for utility bills, $140 in savings for their daughter, $150 for transportation, $50 to repay a college loan, $50 for a furniture installment loan, $160 to repay a loan they used for the down-payment on their house and approximately $300 for food.
Two weeks' unpaid maternity leave had cost the couple about $600.
When the crunch came, they thought about filing for personal bankruptcy. Instead they turned to a counselor with Consumer Credit Counseling and Educational Services. They got rid of the credit cards and began negotiations with creditors for the time they needed to get out from under.
It had also taken time to get into debt. Paul traced the process back to 1974, when they bought the house. They borrowed for the down payment on a Federal Housing Administration financed house, taking on monthly mortgage payments of $458. At the time, he had only two credit cards -- a gasoline card and a Montgomery Ward's charge plate.
After they moved in, "the next thing I knew, here comes a Visa and here comes a Master Charge," he said. By the time he got into trouble, he carried a Master Charge card, a Visa card, an American Express card, a Sears card, a Montgomery Ward card, a Central Charge card, a Washington Shoppers plate and four or five gasoline credit cards in his wallet.
"I had credit cards running out of my ears," he said.
"We were using them. We could meet the monthly payments," said Paul. They were driving an old car, slowly fixing up the house and doing what most couples do -- buying a lamp here, a pair of shoes there, and charging them.
"It was gradual -- little things that you don't really think at the time can nail you," he said.
The baby was born in the spring. By June, they were in trouble, with past due notices on bills and the first of what would be a long series of calls from creditors. Then they started borrowing on the cards. In July, they walked into the counselor's office with approximately $13,000 in debt beyond their house payments.
"I was embarrassed. I felt like, here I am, a grown man, and I let myself get into this situation," said Paul. What he learned when he went for counseling is that large numbers of other families have let themselves get into similar situations.
The counselor allowed Paul and his wife to continue to make their regular payments on secured debt and to continue putting money into savings for their daughter. The rest of the debt will be paid off over a three-year period.
Even after the couple went into the program, the telephone calls continued. "I got home at ten minutes to 6 p.m. and had the phone ringing solid until 9 p.m." for a while said Paul. A particularly insistent woman with one collection company continued to call three or four times daily for months after arrangements had been made to pay the debt about which she was calling. The calls enraged Paul.
The calls came to his office as well. "I just sat back and gritted my teeth and smiled for my co-workers. Nobody knows about it at work," he said.
Aside from setting up a schedule to repay their debts Paul and his wife have pared back their expenses. In a year they have gone out twice, he said. One outing was to a picnic. Then last weekend, when he earned $25 from a weekend job, they plurged on a $7 meal at Arthur Treacher's and a movie.
They also postponed plans to go back to school.
"It hasn't been easy, but at least now I can sit back and say I've got obligations worked out for another two years," Paul said. "Things aren't bad now. Things are tight, but I can see something out there after two and a half more years," he said.
"And it's not a credit card."