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Financial mistakes happen—but what if one cost you over 100k? That’s what happened to Josh and Melanie, a couple from Denver, Colorado. After a failed business venture left them buried in debt, they turned their financial disaster into a powerful comeback. In less than two years, they paid off the entire amount, rebuilt their credit, and now help others do the same. Let’s take a closer look on How to Pay Off 100K Debt!
Their story is proof that even the worst money mistakes can be reversed—with strategy, persistence, and teamwork.
Key Takeaways
- A failed business can be devastating—but recovery is possible.
- Accepting the reality of debt is step one.
- Budgeting and negotiation are your greatest tools.
- Support between partners (or peers) keeps you grounded.
- Progress is slow, but long-term results are real.
The Mistake: A Coffee Shop That Couldn’t Survive COVID
In 2020, Josh and Melanie launched their dream business: a boutique coffee shop. They invested $25,000 of their savings and took out an $80,000 SBA loan (personally guaranteed). They signed a lease in a vibrant Denver neighborhood, hired staff, and prepared for success.
But when COVID-19 hit, their business was crushed within months. Lockdowns, empty streets, and overhead costs quickly led to financial ruin. By mid-2021, they had to shut down with:
- $80,000 in business loan debt
- $15,000 in credit card debt
- $5,000 owed to suppliers and vendors
Step 1: Facing the Numbers Without Shame
Josh recalls: “I couldn’t even talk about it at first. I felt like a failure.”
Melanie’s breakthrough came when they printed every statement and wrote their total debt on a whiteboard. “It was painful, but finally real,” she said.
This step is backed by financial psychologists who emphasize how confronting the numbers helps reduce anxiety and denial. Together, Josh and Melanie agreed: no blame, just action.
Step 2: Ruthless Budgeting and Lifestyle Cuts
They adopted a zero-based budget, using tools like You Need A Budget (YNAB). Every dollar had a purpose:
- Minimum payments on every debt
- $100 monthly to a micro emergency fund
- $70/week for groceries
- No restaurants, subscriptions, or new clothes
Melanie picked up freelance work on Upwork and Fiverr, while Josh delivered food at night. They sold electronics, furniture, and their second car to raise an initial $4,800.
Step 3: Debt Avalanche + Smart Negotiation
Instead of paying off the smallest debts first (the snowball method), they used the avalanche method—tackling high-interest debts first.
- Their 21% credit card debt was negotiated down to 13%
- Vendors accepted partial settlements (some as low as 50%)
- They refinanced the business loan through a local credit union, reducing the interest from 11% to 6.75%
This negotiation-first approach is often overlooked, but it’s highly recommended by nonprofit organizations like NFCC.org.
Step 4: Celebrate the Small Wins
Paying off $100K wasn’t quick. To stay motivated, they created milestone rewards:
- Every $10,000 paid off = a special day together
- Rewards included nature hikes, home-cooked “splurge” meals, or borrowing a friend’s cabin
They also joined a Facebook group for debt payoff accountability, which helped them stay consistent and supported.
Step 5: Rebuilding Slowly and Intentionally
In February 2023, they made their final loan payment.
- 💸 Total paid off: $100,000
- 📈 Credit score: +125 points for each
- 💼 Side hustle income: Melanie earns $1,200/month freelance
- 💰 Emergency fund: Now at $6,000
They now rent a modest apartment, avoid lifestyle inflation, and have no plans to start another business—at least not without capital, insurance, and a detailed plan.
Key Lessons from a $100K Financial Failure
1. Emotions lie—math tells the truth
Facing the numbers helped them detach shame from their decisions.
2. Negotiation isn’t begging—it’s strategy
Many creditors will work with you, especially if you show effort.
3. You’re stronger as a team
Being aligned emotionally and financially was their secret weapon.
4. Track everything visually
That whiteboard kept their goal top of mind daily.
5. Help others when you’re ready
They now coach others in debt via Instagram and private groups—not as experts, but as proof that it’s possible.
Final Thoughts
Paying off $100,000 in debt may sound impossible—but Josh and Melanie are living proof that it can be done with planning, persistence, and transparency.
No one expects to hit financial rock bottom, but how you respond is what defines you. Whether you’re $5,000 or $100,000 in debt, your first step is the most important: know your numbers, and don’t look away. The journey may take time, but with the right plan, recovery is always possible.
✅ Ready to Take Control of Your Own Debt?
Check out this beginner’s guide to budgeting to start managing your money with purpose.