Marguerite’s story is like so many others’
Marguerite had $8,000 of consumer debt. She collected it in college in Arkansas when her parents got her a credit card. She used it to pay for her life, and toward the end of her college career her parents charged her with paying the debt. And she got into a cycle where she transferred balances between ten cards. “This method of moving debt around was the family norm,” she says. She “eventually ‘paid’ some of the debt off through a home equity loan when the rates were good for a refinance.” But she could never quite pay it down. She needed to find another way. And then she discovered the Debt Annihilation Team at Circle of Hope.
Marguerite says we all have stories like this, but we don’t get a chance to talk about them because we discourage dialogue about personal debt, even while so many of us are in “crippling debt.” She says that the issue isn’t just over-spending, but it could start “with one illness and no insurance, one new baby born to parents still in school, one family member that needs help, or one unexpected home repair at an inopportune time.”
Why does the world need a Debt Annihilation Team?
“Everyone is being told this lie that they need to buy, buy, buy.” That’s why Marguerite McDonald says that we have and need a Debt Annihilation Team, which is one of Circle of Hope’s nearly two dozen compassion teams (which is an outflowing of people like Marguerite’s passion). She says that her team “aims to change the mantra from spend-save-share to save-share-spend.”
“Our God is one of abundance and redistribution and the Debt Annihilation Team reflects these ideas by providing a path to freedom from consumer debt and a new way to think about money,” she says.
The team’s philosophy is rooted in “the Spirit of Sabbath economics and reconciliation.” Sabbath economics is modeled after the Year of Jubilee, instituted after the Israelites escaped their Egyptian slavers to redistribute wealth. The law stated that every 49 years debts are forgiven and slaves are free. The same thing is happening here, when people are annihilating their debt.
“The reason DAT started is because of predatory credit card companies and a consumeristic culture,” she says.
“Having your debt completely paid off frees you to share money [with the church], have a savings account, and develop new habits.” She says it’s hard to do that when you have been debt-laden. “Your debt is a burden,” and the credit card companies make it a worse burden.
Consumer debt is more predatory than other kinds of debt. It’s different than student loans and mortgages. Credit card companies are trying to sell you their products; and their products are credit cards. Even people with healthy finances are sold credit cards because of benefits, points, and rewards. Marguerite thinks that may be at the expense of victims of the credit card companies.
“Credit cards are the most aggressively marketed product,” she says. “If you don’t feel the pain of spending, you spend eighteen percent more,” according to one expert. The argument here is that credit cards are a less visible way of spending money and so they spend even more.
“Are people racking up interest so that you can have points?” That’s the question Marguerite is wondering about. And that leads to a philosophical question on the team. Are credit cards themselves are harmful, or is it just debt? Some people think “we’re boycotting the industry,” others think that credit cards can be benign. It’s an open discussion. But Marguerite thinks that, “consumer debt effects our relationships with God and others.” She says it makes us less happier, personally, too: “The more debt we have, the less we’re able to be who we are to freely share or enjoy something like a dinner out, if we know we don’t have the money for it.”
But the team isn’t just about giving people liberty to consume, it’s also about simplicity. Marguerite says we don’t need to buy as much stuff as we think. This is just one of the many ways that we try to strive toward simplicity, she adds. “This is in line with the greater mission of Circle of Hope,” she says. The thrift stores and the monthly Free Baby Goods Exchanges have similar missions.
How does the team work?
“An anonymous group of participants” forms the group, made of “people from the community who will walk alongside participants as their debt is paid off.”
“The order of ‘annihilation’ is discerned. Everyone in the group begins to pay off the debt with the lowest balance or the highest interest rate—whichever is discerned to be more effective for that group, while only paying the minimum balance on all other debt. The seed money is used to strengthen the effort. The seed money was initially a loan from the church and invested covenant members, and is now a sustainable pot of money that continues to support future teams.
Once the first person is paid off, all baseline funds (including the person whose credit card is paid off) go towards the next person. The process repeats until everyone is paid off and the seed fund is replenished for the next group.”
The group meets monthly over dinner. And in the interim, Everence-trained coaches meet with the participants.
The covenant keeps everyone accountable to staying in the group until all the debt is paid off and the seed fund is paid off. Marguerite says the process for annihilating debt takes a long time on purpose. A cohort’s duration builds trust. When people join the team it takes them up to two years to get rid of their debt.
“There’s a lot of trust involved, which is why we have dinners, and the coach meetings,” she says.
Because Marguerite was in a good situation (high debt with low interest, in this case), she was the last of the team to get paid off. “So you had to develop a lot of trust, that these people whose debt was paid off would stay around and pay mine off… and they did.”
How you can help
After she was out of debt, Marguerite stuck around and coached for accountability and transfer of knowledge. Donovan Hayes and Lauren Smith lead the team with her. They make up the nucleus of the team.
Want to get involved? She says, “If you’re in consumer debt, give a call to one of the admins to see if you can be in a cohort. If you express interest, you’ll be on a list and we’ll contact you.”
If you have no debt but interest, you can be a coach. You may contribute to the team directly, if you have the resources, as well (see instructions below). You can contribute to the seed fund, not to an individual’s debt. There are additional ways to be in solidarity with the team too, according to Marguerite, like a spending fast. “Don’t spend money on anything but necessities for a month. Track your finances for a day, as you do when you develop a budget, and donate that amount to the seed fund.”
To donate to the team: Visit our Sharing page. In the dropdown for where to donate select “to Other Sharing.” Then, in comments, type “Debt Annihilation Team.”