From Crisis to Celebration:
How One Member Used GreenPath to Get Out of Debt and Achieve a Dream

The Challenge: When Kathleen P.'s health took an unexpected turn for worse, it affected her family's financial health as well. Bills started piling up and she found herself suddenly facing the fear of the unknown when it came to both her physical wellness and her family's financial future.

It seemed like the medical bills were never going to stop. Each time she paid one, she "stole from Peter to pay Paul," jeopardizing her ability to make other critical payments. And then, because life comes with all kinds of surprises, other unexpected financial demands put her in a situation the hard-working, gainfully employed single mother of two thought she would never see - the loss of her home in foreclosure and the threat of a second personal bankruptcy.

"It seemed like things were getting worse every day and it was the most frightening time of my life," said Kathleen. "I was carrying the weight of the world on my shoulders and couldn't even imagine a better day. After I found GreenPath, though, I realized there was hope."

The Solution: Kathleen's counselor, Diane Clifford, helped Kathleen develop thorough current - and potential - family budgets. The potential budgets included scenarios like an imminent raise in salary and an expected bonus, as well as income from a possible second job. It was during this session that Kathleen realized that a GreenPath debt management plan (DMP) combined with a little extra work and some confidence could help her get out of debt and achieve her dream of being a homeowner again. She was certainly willing to do the hard work needed on her end. And she knew she could count on GreenPath to hold up its end of the bargain: negotiations with her creditors, making regular payments and providing good advice and counseling on budgeting as needed.

"The process was really empowering," said Kathleen. "I went from having no hope, alone, to GreenPath, where I had a lot of people behind me, all of them kind, compassionate and knowledgeable. I felt like I couldn't fail."

The Dream Fulfilled: Kathleen took a second job for a while, working to pay off her debts faster. As a result, the crisis passed quickly and she will be out of debt in about a year, only three-and-a-half years after beginning her program. Since becoming a GreenPath client, Kathleen has purchased a home and is delighted that the only debt she'll have when her DMP closes next year is her mortgage.

"There are so many people in trouble out there and no one should feel ashamed of their situation or be afraid to get help," said Kathleen. "I am so glad I found GreenPath. They helped me get through my challenges with dignity and even helped me make my dreams come true."

What To Keep - And For How Long

Tax documents: Don't mess with the IRS! If it's tax-related, keep it for seven years. Officially, you only have to keep tax returns and supporting documents for three years, but avoid complications by retaining these for seven. The best place to keep them? Store any returns under three years old in your filing cabinet, in the event of an audit. A box in the attic will do for returns older than that. Any returns more than seven years old can go to "the circular file."

Retirement and savings plan documents: These are vital for your future financial well-being. Store original documentation in your safe or safety deposit box and keep regular statements until you receive an annual statement and have confirmed that it's correct. If the numbers match, shred the quarterlies and keep the annual summaries permanently.

Bank statements and cancelled checks: Keeping bank records helps you track your spending, create budgets, provide proof of payment when needed, and can even help you minimize the taxes you may owe when you sell your house for a profit (i.e., proof of home improvement spending). Keep statements and cancelled checks for the past three years in your file cabinet.

Other bank records: If you have loans and certificates of deposit, store the original documentation in your safety deposit box or fireproof safe. Keep the most current statements in your file cabinet and get rid of outdated ones. When loans are paid off, or accounts are closed, the records are no longer needed. Shred them!

Receipts and warranties: The general rule is keep warranties and receipts for items throughout their lifetime if they are lifetime warrantied, 15 years if they are warrantied for 15 years, etc. Major household appliances often fall under this category. Otherwise, follow the basic tips:

• If it's a tax-deductible item, file it for seven years with your tax information.
  
  
• If it is a high-cost item, like furs, art, antiques or jewelry, keep the receipt in your safety deposit box in case you ever need it for an insurance claim.

Medical and drug bills: Retain all medical bills if you have a dispute with your insurance company. Otherwise, keep them for one year so that you can see if they qualify for a deduction on your tax forms. Typically, medical and dental expenses exceeding 7.5 percent of your income qualify. Check IRS Publication 502 for more information.

Paycheck stubs: Keep a file folder or large envelope of paycheck stubs until you receive your end-of-year tax statements.

The organization effort may take a few hours, but pick a rainy day and get it done right. Organizing these documents will be very worthwhile . . . and potentially invaluable. And don't forget to schedule an occasional visit to your files. Moving items to the circular bin and the occasional "shred festival" is as good for your spirit as it is for the integrity of your record-keeping system.