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If you are in a situation like mine, I have a US$17,000 credit card debt, with a US$1,500 salary per month from my day time job (which I wish some day soon will quit, when my online earnings are high enough to pay my debt and give me the way of living I want to support my family, currently My Wife and my 3 year old baby boy), then chances are, you have some bill collectors on your back, then you desperately need some way to be out of debt soon or at least buy some time from your creditors in order to keep supporting your family before you file into bankruptcy (which I am very close, hope to make it out of it).
Get Out of Debt
According to recent statistics, America´s consumer debt hovers around $2+ trillion. So if you too owe money, we are not alone. While our personal debts represent only a tiny fraction of that huge figure, they can still causes insomnia, stress and depression.
There are, however, ways to get out of debt and stay that way. With careful financial planning, you can even put money away for vacations, household treats like new furniture or remodeling and your retirement, without starving or depriving yourself or putting yourself deeper into credit card debt.
The rewards of a bad debt-free life are many. You will have peace of mind which I am looking for, extra dollars in your pocket, no bill collectors and a clean credit report.
Say No to Bill Collectors
There are many things that can lead to a backlog of bills: an accident, losing your job, a natural catastrophe or trouble with the IRS. These things are never planned for, but the outcome is the same, your savings are gone, your credit cards debt are getting sky high and the bank is knocking on your door for payment.
While many people consider filing bankruptcy, Benjamin Dover, author of Back Off! says, “You pay the price for taking the bankuptcy route for years to come, and contrary to what many “informed” attorneys tell you, a bankruptcy may buy you time with the IRS, but it won´t get rid of them in most cases!”.
Bankruptcy proceedings stay on your credit report for up to 10 years, making it hard to reestablish good credit. The following tips are for those people who are so far in hock (like me a few months ago, when for the first time in my life a rep from one of my credit cards called me asking if I had some financial problems, since I forgot to paid 1 month) that the bill collectors are telephoning in the middle of the night, making your life even more miserable.
The following tips may help you get the jackals off your back so you can go about repairing your credit:
Dont Pay The Collection Agency
Debt collector will prey on your fears. They know how to badger you until you send them a check, after all thats their job. You should repay ONLY the original creditor. Never repay the debt collector.
Dover says, “Debt collectors promise to delete all negative information from your credit report if you repay them”.
“They will intimidate you until you do.” But if you pay the debt collector, any of the following may happen:
- You open yourself to repeated harassment.
- You may still owe the original creditor even though you paid the bill collector.
- You set yourself up for negative information on your credit report for 7 years after the debt is paid.
This is how that works: If you default on an account in 2007, it would be erased from your credit report in 2014. If, however, a bill collector comes after you in 2012 and you settle the account, the transaction will then stay on your credit report for 7 years from that point until 2019!.
Debt collectors sometimes go bankrupt, so you may have to pay the same money twice.
Do Not File Into Bankruptcy
Bankruptcy does not wipe the late clean. There are 2 types of bankruptcy:
Chapter 7 and Chapter 13.
This chapter refers to “Straight Bankruptcy” or “Liquidation“. All assets and property are sold or liquidated and distributed to the creditors. It also means that you do not have to make any more payments from future income.
This chapter refers to “Wage Earner Bankruptcy“. It allows the debtor to “adjust” their debts and work out a repayment schedule. The debtor is protected from lawsuits and other creditor actions and have 5 years to repay. The only catch is that the debtor must have a regular income, which disqualifies commission sales people. I guess Online Marketers then are also disqualified, something to bear in mind when I finally quit my job.
Chapter 13 bankruptcies are expensive since they must be administered by an attorney who is paid by YOU.
After you have filed bankruptcy, future creditors will focus on the fact that you once had no money, and that will show up on your credit report for 10 years. And your debts will remain on your credit report for 7 years after the last transaction.
There may be sometimes when filing bankruptcy is the only way to get out from under a crushing debt. But never file bankruptcy just to end all the disgusting calls from a bill collector.
Do Not Promise Anything
Bill collectors know all the tricks for finding you, even if you have moved or have an unlisted number. Once they contact you, usually by phone, their aim is to engage you in a conversation that will eventually lead to a promise to pay them.
Do not play their game. According to Benjamin Dover, here is what they may say and how you should react.
- Debt collector: “You can´t pay the original creditor anymore. You must pay us now.”
- You: Tell them you will only deal with the original creditor (department store, credit card company, car company, etc.)
- Debt collector:“Send us 6 postdated checks, and we´ll stop bothering you and we´ll give you a 20% discount on the balance.”
- You: Don´t do it. They may cash the checks before the date written. If your account is low, the checks will bounce, sticking you with an additional bank fee.
- Debt collector: “Send us $50 by Western Union and I´ll see what I can do to help you.”
- You: Hang up the phone. The minute they know they can get $50 from you, they´ll turn up the heat for more.
- Debt collector: “If you don´t get the money to me, I´ll call your boss.”
- You: It´s illegal for a debt collector to treaten you or to discuss the situation with your boss (or any third party). Hang up the phone, it may be sound a little rude, but it is your sanity we are talking about, so do it.
This were some tips to get bill collectors rid off your back, if you are in deep troubles check Benjamin Dover books.
My credit card bank offered me a loan with fixed interested for 3 years which I took it, since the interests of credit cards are rising after the recession start it. I will stay out of bankruptcy as long as I can, since I dont want to deal with all of those problems with my credit score. If I want to Make Money Online, then i will need my credit cards accepting the charges I may need to make to move my online business.
A faster way to get rid of my credit card debt is to find a good soul and Rich that may be reading this post and want it to buy me a US$17,000 cup of coffee, what a Big cup, but hey! dreaming cost me nothing 🙂 Yet.
Are you in debt? In huge financial problems? Did you had some tips to share to other readers?
To your Success,
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