Drawing The Line

“It is more blessed to give than to receive.” But there’s something to be said for keeping that philosophy in perspective. Just ask Kimberly Burney.

“I’m always rescuing people,” says Burney, 45. She has a big heart, but her generosity has led to a cardiac arrest of sorts for her finances. And now she’s kicking herself. “I’ve made some bad decisions,” says the single mother who resides in Waldorf, Maryland.

Last year, she footed the $11,000 bill for a seven-day Royal Caribbean cruise that she took with her sister and sons, Jovan, 14, and Antoine, 23. She also recently borrowed $12,000 from her 401(k), giving $4,000 of it to her sister for a car down payment and using the rest for home improvements. The list of “good deeds” is extensive, and she suspects that the damage amounts to at least $30,000. “I have to make better choices,” says Burney. “I can’t blow it–I’ve come too far.”

Indeed she has. Though she now earns an income of more than $95,000–a combination of her salary as a human resources specialist with the federal government and her pension from the Army–her financial picture wasn’t always so rosy. Burney filed chapter 13 bankruptcy in 1999. The story is complicated but, simply put, while Burney was serving overseas in the Army, she says her second husband ran up numerous bills. The financial struggle led to the couple’s divorce in 1998, after which creditors came after her; she filed bankruptcy a year later. Burney would eventually pay $18,000, or half of the marital debt, through the bankruptcy.

Burney stayed in the Army until 2002, when she retired after 20 years of service. But she began her financial recovery long before leaving. She and her younger son moved to a cheap, pest-infested apartment in a not-so-nice neighborhood in Temple Hills, Maryland, enabling her to save $10,000 in military housing allowance in just nine months. What’s more, in an effort to raise her credit score–which had fallen below 600 after the bankruptcy–Burney wrote creditors, telling them her story and explaining how her divorce was a factor that led to the bankruptcy.

Eventually Burney found a loan officer who was willing to work with her; she drafted letters to lenders and wound up getting preapproved for a $200,000 mortgage. She says that though her credit score was still low, the letters helped and she was able to get a 5.5% 30-year adjustable rate mortgage. In 2003, Burney bought a three-bedroom, three-bath home for $179,000.

Burney’s biggest debts are her mortgage–which she has since refinanced to secure a 30-year fixed-rate loan of $230,000 at 6.75%–and a $20,000 personal line of credit. Complicating matters, her ex-husband is in arrears on his court-ordered child support payments.

“It was tough for me after the bankruptcy. I went from being broke to having money. I went a little crazy,” she admits. Furthermore, “After two divorces, I was feeling sorry for myself. I bought a BMW, which was really just a Band-Aid. However, I did pay it off when I refinanced