January 24th, 2010 at 06:22pm
Under Consumer Debt
One question I get asked a lot by people who are drowning in debt is:
Is it worthwhile for me to use one of these “Credit Repair” or “Debt Elimination” services?
Here’s a simple and straightforward answer: No. Not when they try to “fool” the system.
There is a great way to eliminate your debt. And let me preface what I’m about to say with a few explanatory words.
Most of us aren’t complete idiots, despite what our bill paying history may or may not say about us. You probably didn’t sit down one day and say to yourself, “I think I’ll drown myself in bills,” or, “What I’d really like to do is borrow so much money that I’ll never be able to repay it all.”
You probably didn’t decide that you wanted to pay 3 to 10 times for that refrigerator, big-screen TV, laptop computer, or whatever. You thought that you could pay it off during the “same as cash” period.
But then life happened. There was that trip to the emergency room… the pregnancy you weren’t expecting… you got laid off, downsized, rightsized or whatever. Stuff.
And now you’re overwhelmed. The phone is ringing. Creditors are calling. Or maybe you’re staying afloat (for now), but you’re just making a bunch of minimum payments and you’re not actually making any progress.
I have good news for you:
You got caught in a very carefully-laid, scientifically engineered, cleverly marketed trap that was designed to keep you in debt until the day you die.
So… since you can now breathe easy and realize that you’re not a complete idiot — regardless of your current credit score (which in and of itself is part of the scheme designed to encourage you to stay in debt) — let me say that I am aware that you probably already know how to get out of debt.
How To Get Out of Debt
We all know how to do it, right? Here are the obvious ways:
- Eat lots of rice and beans and send every extra penny in to your creditors.
- Earn more money (e.g. get another job) and send your paycheck to your creditors.
- Sell anything of value and send that money to your creditors.
- Spend less than you make, and send all the leftover money to your creditors.
Okay… I know what you’re thinking. You’ve already thought of all of those. Shoot… you might have even tried some of them.
Well… as Dr. Phil would ask:
How’s that working for you?
For most people it doesn’t work to do the obvious stuff. It’s like losing weight. We all know how to lose weight: eat less, exercise more. Not rocket science. And yet the number on the scale — like the number on our debt — always seems to go up instead of down.
How to Really, Legitimately Eliminate Debt
First of all, don’t fall for any of the schemes that are designed to harass your creditors with correspondence and make false claims about what you owe. Scouring the fine print on all your contracts is an amusement you can save for the day after you finish cleaning out your garage and spacing out the hangers in your closet.
Nobody can actually “fix” your credit score. My question is: why would you want them to anyway? All your credit score is good for is telling the world that you are addicted to borrowing money. (Have you ever noticed that a high credit score only belongs to people who borrow money frequently?)
So… for most of us, the question isn’t what to do, but how to actually do it.
You need a plan that does several things:
- Gives you the leverage to stop borrowing. If you’re driving your car and you see a collision coming, it won’t help you to stand on your brakes if your other foot is still on the gas pedal. You’ll never get out of debt if you keep borrowing money.
- Works with your personality (and that of your spouse / significant other) to get you on track and keep you there.
- Rewards you or provides positive reinforcement as you make progress.
- Makes the most of your existing income.
Let’s face it: most of us won’t stick to a plan that is excessively painful. If it requires too much effort, doesn’t keep you focused on the prize (being debt free), and doesn’t help you stay motivated, you’re doomed to fail before you start.
My Recommendation
Get a real picture of where you are. Add up all your debt. List your total monthly payments and the total balances on everything.
Use a proven system. There are bunch of them. One great way to tackle this issue that will seriously help you stay motivated is to use software that does the heavy lifting for you (at least as far as calculating how much to send to whom and when).
The Debtwork System Software is a solution that uses a simple “red light / green light” system to:
- Eliminate credit card debt, car loans, home equity loans and even student loans – in just 1-3 years!
- then pay off your 30-year mortgage in another 4-5 years!!
- live 100% on a cash basis, even when financial surprises occur, and never need credit again.
- cut your effective interest rates in half
- reduce your financial stress
- begin your journey of financial continuing education
- lay the foundation for your strong retirement plan
This is exactly the right idea. Check it out and get started today!
I am not the creator of the product(s) mentioned here. I do receive income from advertisers and am compensated when you make a purchase of product(s) I recommend. However, I only choose products to recommend that I believe will be worthwhile, and the compensation I receive enables me to provide this website and the content you see here without charge.
By Average Joe
January 17th, 2010 at 08:11am
Under Consumer Debt
If you read enough of what I’ve written around here, you probably know that I now have a complete and total hatred for being in debt. I think this whole system of credit, FICO scores, easy transactions using your VISA, MasterCard, American Express, or Discover is a pile of dog doo. It has led to dramatic increases in irresponsible behaviors, people becoming chained to jobs (even careers!) they hate, and the destruction of relationships. I hate it, I hate it, I hate it.
If we all learn our lesson, we’ll never borrow another penny again.
That being said, if you were going to get caught owing people a lot of money, this is a great time for it. I’m sure as heck not saying you should run out and apply for a bunch of credit cards… I’m simply saying that of all times (at least in most of our lifetimes) to find yourself buried in debt, this is a great time for it.
Why?
Well… partly because it’s happened to so many people. So many, in fact, that the credit card industry can’t keep up with the collections efforts. Sure… they have their automatic dialers pounding away at our phones. But they are so slammed with people who have fallen behind that they don’t have time to fry the small fish.
So… unless you owe an enormous sum of money to one company, you’re not likely to end up actually getting sued, for example.
In my case, we have a pile of accounts that are past due. Some of which, we haven’t made a payment on in over a year. Others, we got ourselves onto little miniature payment plans (small payments for 6 months while we tried to get our crap together) which expired months and months ago.
Aside from the phone ringing, there’s been nothing. Most of them have stopped sending us crap in the mail. A few days ago I got a nifty settlement offer from one of them which would save me 40 or 60 percent (I forget which) if I’d just fork over a buncha cash.
Here’s a clue: if I haven’t made a $60 payment in 6 months, chances are I’m not turning over a 4-figure sum to you today just to make you go away.
My wife and I are actually close to having a plan to get all of this straightened out. And we’ve had plenty of time to do so. And that’s my point: if this had happened to us 6 or 7 years ago (and actually we hit a rough patch back then that we got straightened out), we’d have been sued by everybody and their brother by now.
But since it happened to us at the same time it happened to everybody else… it really hasn’t been so bad.
There. I said it.
Look… I’m not recommending this. It’s stressful, painful, stretching, annoying, harassing, and just about every other negative adjective you can think of to throw at it. We’ve been through marriage counseling, any number of arguments, spats and fights, and much more that I’m not going to write about here.
Thankfully, we were committed to each other. Otherwise, this would’ve all ended badly before now.
But… my point is simply this: if you’re in a jam, it’s a great time for it. Be thankful that you’re in the company of lots and lots of other debtors. And let the advantages of the timing work in your favor.
By Average Joe
November 10th, 2008 at 01:55pm
Under Financial Stress
In the words of the inimitable Forrest Gump, “It Happens.” I, like so many others, got in over my head with my creditors.
I’m embarrassed about it, humiliated by it, and have gone for months or possibly even years feeling the stress of it. Somehow my marriage hasn’t collapsed (thank God), and overall my health is good, but let me tell you something… it hasn’t been fun.
Let me make something clear right up front. My purpose with this site isn’t to help people cheat their creditors. I have no respect for people who maliciously borrow money knowing full well that they can never repay it. From what I’ve learned, there are ways to game the system and I, for one, want no part of that.
But… I feel the need to tell my story. I’m guessing that you or someone you know (wink wink) may need to hear it. Call it cathartic or therapeutic or whatever you want, but I am compelled to write about my experience. My hope is that you’ll find it helpful.
Over the course of the next few hours, days, weeks, months, or whatever it turns out to be, I’m going to fill you in on my experience in getting completely overwhelmed with debt. At some point in time, maybe I’ll just shut the site off or maybe I’ll get out of the shell of anonymity and tell you who I am.
But for now… I just want to be incognito and let you hear the story.
We — my family and I — found a way out.
No… I don’t have a “get rich quick” scheme. Nor do I have a secret way to fix your credit score or to wipe out legitimate debt with some fancy technique.
But… the recent foreclosure summons we received brought a whole bunch of stuff to a head. It became time for us to do something.
I hope it doesn’t happen to you… I hope you never need to use the information I’ve learned recently.
But if you do… let me just say this: I know what it feels like. I’ve always been somebody who paid my bills and handled my creditors properly. I actually had a really great credit score. My wife did, too.
What’s funny is… it doesn’t matter if you do everything right for 20 years. If one day you find yourself in a jam — through no fault of your own, even — the system turns on you. All that 20 years amounts to nothing.
“What have you done for me lately?” That’s the name of the game.
So… I felt the need to let it out. I hope you find it helpful. If not, then there are plenty of other places to go on the web… this we know.
More soon.
By Average Joe
