Linda Smith of Hot Springs knows what it's like to dodge creditors while trying to figure out how to pay bills.

"You just kind of hide from people," she said. "Some promises you can keep, some you can't."

Smith and her husband LeRoy have lived in Hot Springs since 1991. Over the years, they have suffered a number of medical and financial setbacks. She had a heart attack two years ago.

LeRoy had a back injury and couldn't work for a month. Their grandson lives with them, and 12-year-olds come with a lot of expenses. To keep creditors at bay, she sold her car. They also sold off other possessions.

"We had lots of garage sales, just to pay bills," she said. "Life got so frustrating. I just wanted to drive under a truck. … Health problems, money problems … it just didn't seem (worth living), but my kids made it worth it."

Smith, 55, decided to turn her life around. She went to Consumer Credit Counseling for help, enrolling in a payment program.

She started slowing paying off about $25,000 in debts. Today, she's down to just two medical bills.

"Now, I feel like we can live like normal people, but I'm not sure there really is such a thing as normal people." Smith said she has friends and family who are also struggling to pay bills.

The Black Hills economy seems relatively solid these days, and on the surface, it is. Home sales are off a bit, but nothing like the rest of the country. Bankruptcy numbers statewide are actually below the 10-year average.

But just below the surface, in the far corners of every income level, people are struggling with debt, stagnant income, debt, rising gasoline prices and more debt.

Rebuilding finances

Bonnie Spain and Terry Mills of Consumer Credit Counseling Service in Rapid City see it every day. People coming in the door, their finances in shambles.

Family lives and personal lives strained because of money, or lack of money, to pay expenses and service their crushing debt. And the deeper you get, the harder it is to find your way to the surface.

Consider:

n The average credit card balance in South Dakota is $5,800.

n Among those seeking help at Consumer Credit Counseling, the average unsecured debt (credit cards, payday loans and personal loans) is $23,000. "We've had people coming in with well over $100,000 in debt," Mills said.

n About 12 percent of South Dakotans don't have any health insurance.

Don't expect to get any relief from payday loan places. Their interest rates are worse than any credit card.

Spain has a copy of a loan document from one such business that has an interest rate of 1,277 percent. That was a $300 loan, due in two weeks with an interest payment of $52.50. "You can end up in really bad shape in a hurry," Mills said.

The numbers of people with debt problems seem to be increasing. "January to March used to be our busy time," Spain said. "Now, it doesn't seem to matter. We're busy all the time."

The people who come to Consumer Credit Counseling Service usually have a combination of problems such as loss of employment, medical bills and poor decisions.

"We all make mistakes, and we can survive one of these problems, but a lot of people are hit with a combination of problems," Spain said.

Linda Buchko of Rapid City wants the public to understand that a lot of people who get into debt trouble are not financial ne'er-do-wells.

"I don't drink, I don't smoke, I don't gamble and I don't party," she said. While raising her children, she worked two to three jobs.

But after three years of paying more than $5,000 a year in medical expenses not covered by insurance, she turned to credit cards to put food on the table, tires on her car and clothing on her children.

"Other things had to be shuffled onto the credit cards," she said. "I had no intention of being like that."

Buchko said she was never late with a payment - save one hospital payment, and she was immediately turned over to a collection agency - and she lived as frugally as possible. But by 2003, she had racked up more than $20,000 on nine different credit cards.

'This is my life'

"I would just worry day and night. The debt was consuming everything," she said. "I couldn't breathe anymore. I knew if one more crisis happened, I wouldn't be able to deal with it."

She went to Consumer Credit Counseling. "I handed over a wad of bills, and I just cried. I said, 'This is my life,'" she said.

Buchko began working on paying off her debts. She had to make tough choices, and she still works two jobs. But in February, after four years, she paid off the last of her credit cards.

All she owes now is the mortgage on her home. "I don't like to brag, but I was so proud the day I made that last payment," she said.

For a lot of Black Hills residents, the burden of debt remains a reality. And with gas prices heading into new territory, those people won't likely see relief anytime soon.

"You do what you can for awhile, hold on, supplement your income," Mills said. But if you pay only the minimum on your credit cards, it will take 30 years of interest payments to get to zero.

A number of people are what Mills calls, "house rich and life poor."

They bought a house with a big mortgage, often an adjustable-rate mortgage, and they scrape by each month to make their payments.

Because of that, they have little disposable income, not much savings and no ability to pay for car repairs, new water heaters or other emergency costs.

They turn to credit cards or payday loans and begin sinking deeper into debt.

"Counselors are starting to see messier mortgages," Spain said. One client last week was struggling with three mortgages on his house.

But because he acted early, the counselor was able to help him rework his budget and persuade the lender to consolidate the loans into a single, 7 percent mortgage.

"That's not a great interest rate, but under the circumstances, it's a good deal for the client," she said.

"If you're proactive and can show the lender you're trying, you have more options."

Rosemary Mohr of Spearfish also found herself in debt trouble in 1996 and turned to Consumer Credit Counseling. Because of work-related stress and illness, she wasn't able to continue.

She returned to the program in 2005. In all, she has paid off $27,800 in debts. She made her last payment this month.

Looking toward future

Through her work with counselor Jennifer Johns, she took the Credit Where Credit Is Due class, and she is working on the Journey to Wealth and Wisdom program.

She learned to create a budget and set realistic goals for managing money.

"It is such a relief to be free from all the stress, worry and debt," she said. "The greatest gift for me was God's gift of helpful people."

She's now looking optimistically to the future. "My dream was that when I turn 65, I'd like to go camping," she said.

She's now 65, and she owns a motor home. She plans to live in it during her retirement.

And best of all, she said, the motor home is paid for.

Contact Dan Daly at 394-8421 or dan.daly@rapidcityjournal.com