America's Money: Debt Crush

Americans deep in debt are struggling more than ever amid the credit crisis and economic downturn. See how people got in the hole and what they're doing to get out.

Brittney Bellessa: Sleepless Nights

Trust coordinator, 25, Seattle, Wash.

My husband and I have been married for four years. After two years of marriage and finding entry level positions after college graduation, we moved to Seattle under the presumption that we could make California wages without paying California housing prices.

We bought a 900 square-foot condo for $317,000. We love the place and it's in a great neighborhood, but we have to be honest with ourselves that we may have made a mistake.

Buying the condo required us have to take out a student loan for my husband's graduate school. He works in education and with a $42,000 salary, it infuriates us that his graduate schooling nearly costs us what he makes in a year.

Although we carry no credit card debt and continue to drive our very old cars, it worries me that when it comes time to pay back student loans that we are going to still be very tight and only be paying near the minimum.

My husband desires to work in administration, which pays triple what a teacher makes. But it could take several years for that to happen, and we will need to sit tight until then.

I am grateful that we have, for the most part, lived within our means and have made an effort to save a small amount of money. But if either of us loses our job we could be in the same boat a lot of people are in. I hope this economy turns around so I can stop losing some sleep about it!

Angela Sarno: Debt Control

Client manager and actor, 35, Los Angeles, Calif.

I have never had any credit card debt -- I was taught early on that I should never charge anything I didn't have the cash to pay for on the spot.

I save a chunk of my paycheck every month in a savings account for emergencies, put 10% in my 401(k), and another 3.5% in a Roth IRA.

My husband and I could afford a bigger apartment here in LA, two cars instead of one, and to eat out three or four times a week. But instead we live in a one bedroom, I ride a bike to get around, and we eat out once or twice a week.

My husband brought a sizable credit card debt to our marriage, and living as we do has allowed us to aggressively pay it down -- it will be completely gone in the next 60 days -- without a late payment.

I know it's a radical notion to live below one's means -- but it is how we've managed to maintain our lifestyle in this time which seems to be so challenging for so many. We are lucky in that we are both employed doing jobs we enjoy, and we have our health.

But we've also made smart decisions about living within our means, and these decisions are paying dividends right now. And when the credit card debt is gone, we might even reward ourselves with our first ever vacation!

Carla Bowman: The Daily Battle

Office manager, 33, San Antonio, Texas

We are a middle class family of four and for the last year and a half we have felt the effects of the economy. We fight everyday to make ends meet.

Our daycare costs, medical bills, high grocery bills and soaring gas prices have us in a financial bind with no breathing room...and no end in sight.

My husband and I have had to make many changes to keep our way of life. We have had to change daycares, start carpooling, take on a part time job and reduce our grocery bills.

Our credit card debt is actually minimal but we still find it difficult to make those payments. At times it is tempting to go to a Consumer Credit Counseling Service or to even file for bankruptcy. But then reasoning takes over and we don't want to make matters worse by damaging our credit.

We tried placing our house on the market to pay off our debt and to have a little more breathing room but it's not a seller's market, therefore [there would be] minimal profit. So we feel stuck with no end in sight.

Marty Adams: From Loan to Loan

Senior tech lead, 40, Athens, Ala.

We are in the middle class working as we should. We had good income for several years. I had a good paying job and we had saved up to send our kids to private schools.

We now have stopped driving the diesel truck I had due to the high cost of fuel. It was costing me $165 each fill up every seven days. I purchased a $1,800 car with a loan from the bank. Our savings was gone from high economy costs.

I have three boys. It takes everything that we have to make ends meet. If one thing - like a refrigerator or car - breaks, I have to get a loan at the bank and hope that something doesn't break in between my paying that loan off and the next.

We are holding up better than many and we are thankful we are able to work. I will keep on as long as there is breath in me. There is a job always somewhere. Even if I have to mow a lawn or go back to working on the farm I will to make it better for my family.

Randy Klein: Caught by Surprise

Accountant, 40, Syracuse, N.Y.

I am a professional accountant and my wife is a teacher. We have two small children ages 4 and 2. I lost my good paying federal job in September 2006, the same week my second daughter was born. I was unemployed for six months.

Before losing my job we were somewhat overextended with several credit cards due to inattention and the American need for instant gratification. I never expected to lose my job and did not worry too much about the debt load we carried.

We also really did not plan for the high cost of daycare when we purchased our home. With two kids in daycare we pay more for that than for our mortgage and property taxes each month.

Right now our credit card debt stands at about $30,000. The lenders aren't too interested in working with consumers as demonstrated by the 29% annual percentage rate we pay on the two largest balances due to being late with payments.

I have contacted the Consumer Credit Counseling Service but their debt management plan is a higher monthly balance than we can fit into our budget.

My plan right now is to limp along and pay what we can, when we can, hoping the economy and employment prospects will improve. I am now employed but at a salary about $20,000 lower than when I was laid off.

David Shoffner: Budget Deficit

Store manager, 36, Charlotte, N.C.

My wife and I moved from Raleigh to Charlotte, N.C., in April of 2006 for a job opportunity. We had never purchased a home before and finally decided to build our first home.

We had revolving debt that was manageable and we qualified for a mortgage on a fixed rate. Our credit scores were okay, but they were not good enough to qualify for an adjustable-rate mortgage.

Then we bought another car and had some more revolving debt added. We also had some repayments to make to the IRS for back taxes I owed.

Fast forward to now. I am in a 95% commission sales position at a local mattress store. Sales have literally been cut in half the last four months and my wife was laid off twice in 2007 -- the second time was for four months. I have calculated that we are running a deficit of $600 a month.

We got behind on our mortgage payments and now are on a reduced payment until they can renegotiate our loan. We have had to stop paying our credit cards to just cover our car payments and living expenses.

We cannot sell our house because of the market. We cannot sell our cars because we are upside down in our loans. We need help!!!

Ruth Gretzinger: Trapped by Plastic

Writer/project manager, 54, Ann Arbor, Mich.

I am a 54-year-old single mother living in southeast Michigan -- one of the worst places in the country right now financially.

I have a good, secure job, but the costs of raising a kid on my own have meant that my credit card debts are taking all my "disposal income."

I don't have enough money to live on because I have to pay my minimum monthly payments -- and then, since I don't have money, I have to use my cards to buy food and medicine. (I had a severe illness last year that really put me over the edge money-wise.)

Although I've been able to pay my mortgage payments, I no longer have any equity in my house because of the awful housing market. And I've already got two mortgages.

My daughter is going to be going to college in the fall, but at this point I don't know where the tuition money is going to come from. I am now looking into filing for bankruptcy as one of my last options.

Carmela Brader: Debt Begets Debt

Construction project coordinator, 27, Pullman, Wash.

In 2004 I graduated with a bachelor's degree from the University of Washington and $50,000 in debt from student loans and medical bills. After college I was sure I could pay it off.

After working 40-plus hours a week for four years, 2008 has brought me to the conclusion that work will only make ends meet, but never allow me to pay off debt.

To resolve the situation I have no choice but to pay my debt by making more money. A master's degree would enter me into a higher salary (and debt) bracket. With the economy, competitive job market, rising gas prices and high cost of groceries....I had no other choice.

So I work 40 hours a week for $30,000, started a masters degree in January '08 online for $23,000 a year. My husband makes $25,000 a year.

I have no children and do not own a home. I am just a married, 27 year old trying to make ends meet and get an education. I have to work a low-paying state job to cover medical benefits for my type one diabetic husband.

With the rising cost of life, what do you do, where do you turn? And when will it even be slightly affordable to have children? To afford healthcare? To fill my gas tank? To just buy groceries for two people?