Doug Hamilton

Doug Hamilton is pictured at Consumer Credit Counseling Service of Maryland and Delaware. He is a consumer working his way out of debt. (Baltimore Sun photo by Algerina Perna / January 3, 2012)

After his mother's death six years ago, Doug Hamilton says, his financial life spiraled out of control. He spent freely, didn't pay his bills on time and had creditors calling him at work.

Marlena Clay-Boone says her financial problems started as her marriage fell apart. Eventually she racked up nearly $69,000 in credit card debt.

Both Baltimoreans have spent more than a year digging themselves out of debt. And both have agreed to share their stories, figuring their experiences might encourage others to tackle debt problems, with or without assistance.

"Whether it's small or big, the debt can be deadly," Hamilton, 49, says. "It's like a cancer that can devour you. The advice is: Don't be afraid to ask for help."

As holiday credit card bills roll in, this is the time of year when many consumers vow to gain control of their finances. Nationwide, consumers have made a big dent in total debt since the recession began in late 2007 — paying off $150 billion of a $942 billion credit card bill.

Debt experts urge patience: You probably didn't fall deep into the red overnight, so you can't expect to eradicate debt quickly either. It may take years of budgeting and faithful payments to get on track.

You can do this on your own, and many have. But others need help. Hamilton and Clay-Boone, for instance, turned to Consumer Credit Counseling Service of Maryland and Delaware, based in Catonsville, to get their finances in order.

The nonprofit offers free budget counseling and sometimes refers clients to social services to address underlying problems such as drug and gambling addictions.

About 20 percent of the agency's clients enter a debt-management plan, in which a counselor negotiates more favorable terms with card issuers. The client is then put on a repayment schedule that can last up to five years. Consumers pay a program fee of up to $35 a month, although that's sometimes waived. To qualify, clients must have enough income to pay bills, with some left over for emergencies.

Jim Godfrey, president of the counseling agency, says the number of people enrolling in debt management has fallen by one-quarter in the past year or so.

"People are so far in the hole that it's difficult to do anything for them," Godfrey says. "We have referred more people to seek legal assistance."

That can mean filing for bankruptcy.

Hamilton and Clay-Boone say that wasn't an option for them.

Hamilton, a sales representative, has been downsized twice in his career. He now works for ADT Security Services in Columbia and is paid only through commissions.

"If you're doing well, you make a great amount of money," says Hamilton, who says he earned about $70,000 last year. "If you're doing poorly, you could make no money."

Hamilton says that he never had great financial planning skills and that things only got worse after his mother died.

"It made me not care about a lot of things," he says.

He spent lavishly on friends, eating out and traveling. He was late paying bills, and penalties accrued.

"It was a horrible snowball rolling down a hill," he says.

In another sign of loss of control, he says, he gained so much weight that he hit 363 pounds on his nearly 6-foot frame.

His actions caught up with him. He was unable to maintain the house where he lived and moved in with his sister to save money.

She encouraged him to try credit counseling — a difficult step for him back in August 2010.

"It's a very personal thing, finances. It's like religion. It's like sex. It's hard to kind of really disclose everything about it," he says. "At this point, I had such pain. I had to alleviate that pain."

He talked to a credit counselor, who helped him budget and get a handle on his finances.

His debts, including credit cards, a student loan and a car loan, at the time amounted to $55,000. Through debt management, he took aim at his $6,229 in credit card debt and has whittled it down to $4,086. He says he's paid off more than one-third of his other debt.

He also enrolled in Weight Watchers and has shed 85 pounds.

It hasn't always been easy. He slipped up once when he didn't have enough to pay a card issuer. Hamilton has since worked out a payment plan with the creditor and is building a savings cushion so he won't have a shortfall again.

Early on, he says, the hardest part was giving up credit cards. Today, he sticks to a debit card.

For her part, Clay-Boone was happy to give up her plastic as part of her debt-management plan.

"I really didn't want to use the credit cards," she says. "I had that much debt."

Debts started piling up when she took on the bulk of household expenses as her marriage faltered several years ago, says Clay-Boone, 60. She worked 30 years with Verizon before taking a buyout in 2001, after which she held a variety of jobs.

Eventually, her card payments became too much to handle. "I was a little overwhelmed," she says.

She tried unsuccessfully to negotiate with creditors on her own before enrolling in debt management in October 2009. By then, her balance totaled $68,810 on about a dozen cards, one with a rate of 27 percent.

A counselor was able to get Clay-Boone's interest rates into the single digits. She now pays $1,263 a month under the debt plan and has worked off more than $28,000.

She has faced numerous challenges. The most serious: She was laid off last April from her customer service job at a Verizon subsidiary.

But she got some help. Several months ago, she qualified for a federally funded loan program designed to help homeowners who suffer temporary setbacks. It pays about 70 percent of monthly mortgage payments, for up to two years. If the homeowner continues to keep up with the payments thereafter, the federal loan is eventually forgiven.

Clay-Boone says her monthly income from an annuity and unemployment benefits is $3,120. She says that she doesn't have much left after paying her bills, and that an emergency could wipe out that cushion. She hopes to start job training this month so she can work as a medical assistant in a hospital.

"I am definitely not a person to give up," she says.

As the experiences of Hamilton and Clay-Boone illustrate, it's hard work to begin the process of eliminating debt. But it can be done.

"The first few months are actually the hardest," says Lynnette Khalfani-Cox, a money coach and author of "Zero Debt: The Ultimate Guide to Financial Freedom." She speaks from experience, having racked up $100,000 in credit card debt — which she paid off in three years.

She advises consumers digging out of debt to start by writing down all outstanding bills. Many people don't even know how much they owe, she says.

Look for expenses to cut. This might call for some tough choices. Khalfani-Cox, for instance, moved her children out of their pricey private school to a less expensive one.

Find ways to do things for free or cheaply. Khalfani-Cox goes to the library instead of buying books.

Negotiate with creditors to get better terms, she says.

And if you need help, check out a reputable nonprofit credit counseling agency.

eileen.ambrose@baltsun.com

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