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Strange Ways to Get Out of Debt

 
By Kathryn Tuggle
FOXBusiness
     
    Drowning in Debt

    Whether you’re a spender or a saver, it seems there are as many unique ways to get out of debt as there are ways to get into it.

    Take Alice Walker. When Walker found herself over $10,000 in credit card debt, she fled the country to escape creditors.

    “I could have filed for bankruptcy, but I found the process so stressful and time-consuming, I decided leaving the country was my best bet,” Walker said. She got a job as an English teacher in Korea, and now banks overseas.

    Walker said that although creditors called her repeatedly while she was still in the living in the U.S., they haven’t contacted her in the 10 years since she emigrated. Although Walker now lives in Saudi Arabia, she has a teaching visa so she can come and go from the U.S. at leisure.

    Walker said she has no regrets about escaping her debt. On the contrary -- she said if she had it to do over again she would have gone into much more debt before she fled. “They can’t do anything to you if you’re out of the country,” she said.

    Of course, Walker’s approach might not be for everyone, because it involves a life change and because it’s “really illegal” according to Tom Garman, president of the Personal Finance Employee Education Foundation, a nonprofit finance education organization.

    “People do radical things. Illegal behavior would not be considered rational in the economist’s mind. The best way to escape your debt is to make a positive plan,” said Garman.

    Irina Patterson, a 49-year-old living in Miami, Fla., started her own business four years ago when she began making balloon animals in order to pay off her mortgage.

    After Patterson saw a balloon artist at a party, she decided that going into business for herself would be fairly inexpensive. “All I needed was a bag of balloons and a small pump,” she said.

    Patterson has now paid off most of her condominium, and enjoys a salary of as much as $250 an hour for private parties. Patterson receives tips tax-free and said that parents of children at parties literally “throw money” at her to make the colorful animals.

    Crissy Herron, founder of www.indiebizchicks.com, started her blog for female small business owners. 

    Herron spent just $15 to get her business online, and with the profits she has paid down her student loans and said she is “whittling away” at built-up credit card debt.

    Herron started the business two years ago when she was 29, and now her blog brings in a total of $2,000 a month in ad revenue. Herron’s business has grown so successful she has a web conference room in which she teaches virtual how-to classes to other prospective bloggers.

    Starting a part-time job to get out of debt is a common way to turn your finances around, according to Garman. “A job isn’t just a quick-fix to the problem,” he said. “A job is a real solution that offers an additional source of income.”

    On the other hand, some individuals seeking freedom from debt have actually sold the items that got them in financial straits in the first place.

    At www.Portero.com, an online auction house for luxury items like jewelry and accessories, individuals can sell items that range in cost from $400 to $50,000.

    “We have people come to us who are jobless, who feel they don’t need the extravagant extras in life, and [selling their items] is a way to tide them over while they are job searching,” said Stephanie Phair, Vice President of Business Development for Portero.

    “We also have divorced cases, where people will tell us, ‘Please sell it as quickly as you can, he has cut me off,’” Phair said. Cases like this have increased with the down economy, she said.

    Although Portero tries not to ask too many questions as to why customers are selling their items, customers often reveal that they are getting a divorce, paying off student loans, downsizing, or are out of work. Most of Portero’s customers are women between the ages of 30 and 60.

    Individuals who sell their items on Portero can expect to see money about two weeks after the auction ends. Portero charges a listing fee of $25 and a 30% commission on the sale.

    While it’s true that luxury items can bring in big bucks, some more personal treasures have also been sold to help pay down debts.

    One woman, who goes by her nickname “Katie,” chose to resolve her finances by helping other people start families. Katie donated her eggs to a fertility clinic that helps other women conceive.

    Katie used the $8,000 she received from donating her eggs to pay off student loans and credit card debt.

    After hearing about the procedure from a friend, Katie found out she was in the right age range, between 18 and 28, to donate eggs.  Females can donate eggs three times in one year and can do it six times during their lifetime.

    Although Katie has recommended egg donation to friends as an easy vehicle for extra cash, she stressed that the procedure is not for the faint of heart. During the operation to remove her eggs, she was put to sleep for approximately 30 minutes and had to take a day off work to recover. She also had to inject steroids into her stomach for four weeks leading up to her surgery in order to lower her hormone levels.

    “It’s scary at first, and hard to do at first, but I got used to it,” Katie said.

    Katie has now gone through the procedure three times, and is planning to go through another procedure later this year when her debts will finally be paid in full. She said her family stands behind her and thinks her egg donation is for a good cause.

    No matter how you get out of debt, Garman said the best way to stay out of debt is to draw up a strict monthly budget once you’re back in the black.

    “When you come up with a plan, make sure it can offer you long-term success,” said Garman. “Otherwise you’ll just end up going in and out of debt for the rest of your life.”