In 2005, indie film screenwriter Kenny Golde's finances were in nothing short of mint condition.
"I had less than $10,000 in credit card debt, more than $100,000 in unused lines of credit, a FICO score over 800, and about $100,000 in savings even after the downpayment on my home," he says. "I even adopted a dog."
Then the bottom fell out. Within a year, a perfect storm of financial and professional mishaps would carry him down a seemingly never-ending rabbit's hole of debt.
By his fortieth birthday, he had amassed a staggering $220,000 in credit debt and spent his days sparring with debt collectors, dodging lawsuits and doing all he could to keep bankruptcy at bay.
That was until an attorney steered him toward a path he never thought he'd travel: Debt settlement––essentially negotiating his debt directly with lenders.
"The journey took me about a year and a half," Golde writes in his book,
"The Do-It-Yourself Bailout." Now "I have reduced my debt ... to zero. I have done this legally, at a fraction of the cost of the debt itself, and I saved just under $150,000."
Screenwriter Kenny Golde paid $170,000 in 2008 to finance a movie
Golde struggled for 11 years to secure financing for an independent film, he found his savior in a 70-year-old investor named Gabe.
Gabe pumped $560,000 into the project, but "it quickly became clear that we were under-financed," Golde writes. "I called Gabe in Los Angeles to gain his support in going [$170,000] over budget, only to learn that he had been hospitalized."
Within weeks, Gabe passed away. Golde was left to foot the bill himself.
Meanwhile the Writers Guild strike left him out of a job
To cover the project, Golde took out seven new lines of business and personal credit at six different banks.
"I was carrying around $3,600 per month in minimum credit card payments in addition to my mortgage and regular monthly expenses," he writes. "I was scared."
He was also out of work. The Writers Guild of America and Screen Actors Guild were both in the thick of wage strikes at the time and the job market in film had tanked. Within six months, his savings would be depleted.
It was such a sudden and drastic lifestyle change that Golde says it was all he could do not to succumb to depression.
"In addition to my sense of failure, I was self-judgmental," he writes. "How could I be 40 years old and looking at bankruptcy?"
$220,000 in debt, Golde had two options: filing bankruptcy or fighting off the lenders himself
His personal life in tatters––Golde blames his financial funk on the demise of his love life at the time––he took his family and friends' advice to meet with a bankruptcy attorney.
"I call it a context change," he writes. "I changed my context from depressed and emotional to 'This is the mountain I'm on and I'm going to ski it as best I can.'"
He was ready to file bankruptcy, but the attorney had another idea: debt settlement. As Golde learned, banks were willing to settle debts for a fraction of their total value if consumers are unable to make payments.That's because it's more lucrative to them than selling the account off to debt collectors, which pay as little as 5 percent of the balance.
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