Help! I'm Drowning in Debt
By Sarah Lorge
December 2, 1999

FACING A STACK of bills you can't handle? Take heart. Plenty of nonprofit organizations are out there, eager to help you climb out of debt.

Last year, 27-year-old Thomas King examined his credit card statements and came to an unsettling realization: He was still carrying debts he ran up during his college years. The San Antonio, Texas, customer-service rep was $6,000 in hock - thanks to three credit cards, a bank line of credit, a huge cellular phone bill and a Radio Shack card he'd maxed out to buy a computer. "I went a little too nuts on credit," King admits. "And making minimum payments wasn't moving the bill at all."

At least King's new computer came in handy. He surfed the Internet and found Auriton Solutions, a Roseville, Minn.-based nonprofit that helps debt-ridden consumers reorganize their finances and start paying down their loans. King filled out the company's online application, which asked for information on his debt. He paid a $25 registration fee. (After that, Auriton charges up to $35 as a monthly maintenance fee, depending on the debtor's financial circumstances.) Auriton then began negotiating with his creditors, eliminating late fees, trimming as much as 12% off his credit-card interest rates and, in one case, eliminating the interest entirely.

King's new payment plan, developed by Auriton, allows him to send in one monthly check for $195, which Auriton disburses to his creditors. A year later, he has paid off his three largest debts and figures he'll be debt-free sometime in Y2K.

Partial excerpt www.smartmoney.com article December 2, 1999.