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TWELVE-STEP programs often talk about the moment of clarity, when an addict starts to understand just how dire the situation has become. For Karawynn Long, 42, and Jak Koke, 47, it arrived in 2005, when they crossed the $40,000 mark on their credit card bills. “For some reason that was a scary number, over some internal threshold,” Ms. Long said. Their pledge to fix the problem came a couple of years before the economy turned, giving them a head start on all the other people who buckled down once disaster become clear. Ms. Long and Mr. Koke, who live here, paid off the debt, earned more money and changed their spending habits — all of the things you’re supposed to do when plotting a financial turnaround. But in the end, their best efforts were not enough to avoid being dragged down by the one asset that they thought would protect them — their home, which they will have to shed before they can complete their comeback. Their story begins in early 2002, when they moved in together. A year later, they began a publishing start-up — Per Aspera Press — that they hoped would become their own science fiction and fantasy imprint. The business name is taken from the Latin phrase “ad astra per aspera,” which means “to the stars through difficulties.” But the effort generated more difficulties than stars, and they struggled to finance it with ever-more credit card debt. Ms. Long, an author herself, also acknowledged that half of that $40,000-plus debt load was from living beyond their means. She always assumed she would share the upper-middle-class lifestyle of her childhood. She went out to eat — a lot — something that continued during her relationship with Mr. Koke. They took vacations. And when money was tight? “Basically I just put it on credit cards to keep that level of lifestyle no matter the actual situation,” she said. “Like I was entitled to that.” Mr. Koke grew up in what he describes as an average middle-class family. Both his parents worked. His money philosophy has always been to try to arrange his expenses and his life so that he could live on part-time employment, with the rest of his time devoted to writing novels. “I did pick up the responsibility gene in the sense that up until we had our business where we ran up this huge debt, I didn’t have much debt on my cards,” he said. And the pair were sure the publishing imprint would succeed. “It always seemed like at some point it will break through and pay for itself and our lives, too,” Mr. Koke said. “But it never actually did.” The credit cards had also seen them through periods of unemployment. Both have spent the bulk of their careers in the technology industry, mostly as contract employees. She has worked as a Web designer at various start-ups, and he has had jobs as a biotech researcher at several universities, as well as on-and-off work doing technical and marketing writing and editing at Microsoft. He has two daughters from a previous marriage: Michaela, 19, who rents a room from a great-aunt in Portland, Ore., while saving for college, and Claire, 13, who lives half-time with her father and Ms. Long. By late 2005, Ms. Long started to worry about the ballooning debt. Early in 2006 they began household austerity measures, including few or no meals in restaurants, no vacations and the suspension of contributions to their retirement funds. The couple also shut down the publishing effort and found full-time jobs. She worked for a brokerage firm, and he got what he thought was a long-term contract writing for Microsoft. That raised their combined annual income to around $150,000. Then, they threw every extra penny at the credit card debt, around $2,000 a month. Soon the older daughter, Michaela, noticed that the formerly automatic answer of “Sure, honey, here’s the money” started to change. “If you wanted to get a sports sweatshirt or something we would work something out where I paid half if I really wanted it,” Michaela said.
Devin Maverick Robins contributed reporting.
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Bloomberg News