Beat The Creditors

Are Debt Elimination Tactics Worthwhile?

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:

1. Eat lots of rice and beans and send every extra penny in to your creditors.
2. Earn more money (e.g. get another job) and send your paycheck to your creditors.
3. Sell anything of value and send that money to your creditors.
4. 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:

1. 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.
2. Works with your personality (and that of your spouse / significant other) to get you on track and keep you there.
3. Rewards you or provides positive reinforcement as you make progress.
4. 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 Add comment

The Day The Foreclosure Summons Came

November 11th, 2008 at 10:57pm Under Legal Mess

I’ll never forget it.  It’s like 9/11… or the day the Challenger blew up.  One of those days that’s etched into my memory forever.

I had been out running some late evening errands. It had already been dark for some time. As I came down the street towards our house, I could see from a long way off that there was an unusual vehicle in the driveway. Its lights were on, and it had an unusual tag.  At first I thought it was some kind of vanity tag with a sports logo or something on it.

Immediately, I was thinking that some strange person is either in my house or trying to get in.  My wife was home alone with our kid(s) (remember… no personal info), so my first thought was their safety.  I hadn’t looked closely at the strange vehicle, but I could clearly hear a (large) dog barking inside of it. By this time, my adrenaline was pumping hard.

There was a lady talking to my wife on the front porch. She was dressed in civilian’s clothes, but a badge was clearly displayed on the front of her outfit — it must’ve been attached to her pants pocket or else to the bottom of her jacket.  At this point, I started to connect the dots — this is someone in law enforcement.  Oh yeah… now that I think about it, I think I saw K-9 on that vehicle.  Okay… it’s starting to connect.

The lady was a sheriff’s deputy, but was in the process service department. She announced that she had foreclosure papers for us.  She was very, very nice.  She was obviously trying to comfort my wife and make her feel better.

The whole thing was a shock.

Yes… we knew we were behind on our mortgage payments. No question about that. But we had been talking to them on the phone. We had filled out paperwork. We had written a hardship letter. We had supplied financial information and disclosed all sorts of personal details. We were talking about our options, including a loan modification.

But not this.

This was out of the blue.

She went on to explain that this actually gave us time. A lot of time. She talked about the 20-day time period in which we must respond. She said once you respond it could take a year… the courts are really backed up. She’s out serving these to tons of people… including a half a dozen people “just this past weekend” in her own neighborhood.

There are so many foreclosures underway right now that the dockets are full.

There was much more to what took place, including some really screwy paperwork. I’ll tell more of the story on another day.

But that night will forever be burned into my memory as the day the foreclosure summons came.

By Average Joe Add comment