Right now it is a beautiful North Carolina day with the sun shinning over a blue sky, birds singing and a gentle breeze is blowing. In some respects it is a tremendous day worth living.

But I’ve got to be honest, I’m trying to get in the mood to dive into the never ending requests for help that are sent in from the GetOutOfDebt.org site.

I’m not immune from the unhappiness and depression that you are feeling as well. Maybe the problem is that I feel your pain too much. Maybe I should find a way to turn that off.

When I read email after email and the stories contained in them I remember back what it was like when I was struggling with the pain of debt. It was back in 1989 and 1990 but that pain does not seem to fully go away.

What I remember most was how dark those days felt. How oppressive or depressing they were. There is no magic wand I can wave to make that better.

While it might not provide much comfort, at least I know that the funk I’m in today is just a fraction of what many are suffering from. Many are unable to drag themselves out of bed, are severely depressed, can’t face the day and just can properly function in a normal way in days that feel anything but normal.

For those of you that might be regular readers, you might remember that my escape from dealing with the pain of debt is photography. Ironically here is a picture I took a few days ago that seems to remind me even more about consumer debt problems.

To me it reminds me of the hopelessness that individual consumers are feeling under the powerful light and control of large banks. The chair is sitting empty, waiting for the next person to come in and face the stark reality of their debt problems.

Credit Counselor Stress

If I’m feeling like this there must be a lot of people, that care, who are working for credit counseling groups or debt management companies that are feeling the same overwhelming stress and sadness. I wonder how they are dealing with it?

Those of us that advise are going to need grief counselors soon because the trauma that we face on a daily basis is coming at us fast and furious.

I’m not whining about this, just venting and being honest. I’ll finish this post and do what I do best; the next question.

Other Related Articles to Read

• Bankruptcy right for me???
• Debt Relief Service Did Not Mention Bankruptcy to Me But Debt Settlement Lawyer Did. – Patti
• I Just Want to Run Away From This Financial Mess. – Denise
• We’ve Lost Three Parents and Had Eight Deaths in Three Years. – B4lee
• 44 Lessons in Life for Debtors
• I Am Unemployed and Can’t Pay My Charge Card Bills. – Fran
• Money and Stress: How to Keep Your Money Worries From Killing You
• ChevGirl Writes In And Says “My Marriage is Suffering Because of Our Debt”
• The Seven Stages of Debt. Which Stage Are You In?
• Making payments but barely breathing financially. – Julie

Read the full article at GetOutOfDebt.org, click here: Debt is Dragging Even Me Down, Mentally.

I can dream, can’t I? If I could get a wish for debtors it would be to wave a wand and implement this perfect debt assistance or debt relief program.

Here is what the program would look like.

A Sliding Scale Nominal Charge – Consumers would have to pay a sliding scale setup fee. It is too expensive to start a lot of work on behalf of clients that never follow through. So a new client would pay a sliding scale setup fee upfront to cover the initial cost of getting their plan established and show they are committed to moving ahead.

Copies of Bills – Debtors would provide copies of their statements quickly. Ideally potential clients needing help would be getting their mail via something like Earth Class Mail so they could instantly forward copies of their bills to the debt adviser. That would be wonderful! The delay in making copies and forwarding them only delays the process and creates more busy work.

Allow the Debt Adviser to Pull a Consolidated Credit Report – Allow the debt management company to pull a consolidated credit report at a reduced charge to make sure they know about all debts.

A Real Spending Plan – The debt management company would review the client’s financial situation and put together a suggested debt repayment plan that is affordable, reasonable and sustainable through total repayment. None of this cut out everything fun stuff, leave some room for a movie or occasional night out. Also, be sure to include some money going into a savings account every month for emergencies and unexpected expenses. The spending plan will need to be able to be adjusted and payments possibly reduced for living expense increases like adjustable mortgage payments, increasing health insurance, etc.

Fair Payments to Creditors – Payments to unsecured creditors included in the repayment plan would be based on the percentage of debt that the creditor is responsible for. For example, if the client owes Sears 13% of their total debt then Sears would get 13% of debt repayment dollars available, as determined by the debt advisor.

Credit Counselors Actually Dictate – Unlike the BS lie that floats around now that credit counseling groups negotiate a debt management plan, which they don’t, in the perfect plan, they would tell the creditor what they will get, not what they want. The debt adviser would contact the unsecured creditors and notify them what the amount they will receive under this debt management plan.

The Debt Management Group Has Some Real Authority – In the perfect plan the credit counselor would be required to certify that the repayment plan proposed is the consumers best effort. Creditors would be required to accept the reduced payment plan as put forward by the debt counselor.

Creditors Would Eliminate All Interest and Fees – During the repayment period, all interest and fees would be waived as long as the client is making their payments as agreed. An allowance should be made for an unusual situation that leads to a a payment missed, but a creditor would not be able to go back and retro charge a client interest for the period which they were making payments.

Creditors Acknowledge the Plan and are Bound to It – Creditors would be required to confirm the balances due when the client enters the plan and then the creditor will be bound to that balance even if they sell the account to another creditor. This will allow the client and debt management company to calculate the exact date the consumer will be out of debt if they make the payments as agreed. This will give everyone a date to mark down and look forward to.

All Collection Activity Ceases – Once the client makes their first repayment under the plan, and continues regular payments, all collection activity will cease by the creditors.

Creditors Can Pursue Clients Under Certain Situations – If it is determined that the client lied about their income or expenses or if they stop making monthly payments, the creditors can resume all collection activity.

Client Can Make Payments Or Hire A Payment Processor – Once the plan is negotiated and put in place by the debt management company then the client can elect to either make the payments themselves to the creditors or to hire a payment processor to whom they send one payment and the payment processor distributes it for the client. This is service that some consumers may desire.

Credit Counselors Can Be For-Profit – It is time to end the sham that only non-profit groups provide better service to consumers. There needs to be a free market to allow companies to compete in order to drive up the level of service and capabilities of leading companies. There is nothing in a debt management plan that requires the need for a charity. Allow for-profit companies to enter this market and attract bright, smart and talented people to create services for consumers.

Require Credit Counseling Companies to be Bonded and Licensed – If a credit counseling group is going to be handling consumer money then they need to either have an adequate employee loss or theft policy, be reasonably bonded and be licensed by the federal government.

Make Laws Governing Debt Management Companies Federal – Make debt management regulations federal instead of state based. There are just too many states to deal with. Consumers can be protected with a federal envelope rather than 50 different rules and regulations.

Paid Creditor Intervention – If a consumer is having a dispute or difficulty during their repayment plan they could hire a debt advisor to intervene on their behalf to try to remedy the situation. The debt adviser is a third-party with professional experience in handling these situations.

Allow The Debt Company to Charge For Credit Report Assistance – Allow the credit counseling group to be hired by the consumer to help correct inaccurate or false information that appears on the consumer credit report. Some people never do this themselves. This does not cover the removal of any accurate but negative information.

No Lingering Tax Liability- Unlike now, where any forgiven debt is taxed by the IRS as if it was earned as income, except for debt discharged in bankruptcy, the IRS needs to not bill consumers for the that amount owed that creditors may write off under this plan. Getting a tax bill for debt you already can’t pay is a strong disincentive for consumers to even bother with repayment.

Fixed Repayment Period – Consumers would not have to repay more than four years under this plan. The often suggested five year date is just a bit too long to provide substantial incentive for debtors to sacrifice years of their lives and gamble on the possibility of successfully completing the program. The shorter the period, the more likely that a consumer will embark on the journey and successfully complete it.

Other Related Articles to Read

• How to Shop for a Good Debt Management Program
• Eva Has Heard Negative Things About CCCS
• New Concerns About 40% Credit Card Debt Reduction Proposal
• Five Inside Truths About Debt Management Plans (DMP) You Need to Know
• Less Than Full Balance Plans and the Problems They Create for Credit Counselors
• All About Cambridge Credit Counseling Corp.
• How Can We Reduce Our Interest Rates So We Can Pay Our Own Way? – Joan
• I Would Like to Consolidate My Debt, However I’m Having a Difficult Time Finding Someone Who Will – Laurie
• I Really Screwed Up And Need Some Direction. – Chris
• Deepu’s Wife is Unemployed And is Looking for a Debt Consolidation Loan

Read the full article at GetOutOfDebt.org, click here: The Perfect Debt Assistance Program

Patrick Bryan, a debt adviser friend of mine from Northern Ireland, and I were chatting recently about the universal nature of debt problems in the world. It became apparent that while we are all told that we live in an interconnected global economy it seems that the consumers of each country continue to suffer in silence when it comes to debt problems.

I asked Patrick to share a recent case with us so that you can see what life is like many time zones away in Northern Ireland.

The Answer:

It has been a bit of a depressing week in my efforts to give debt advice to people here in the province.

On Monday I spoke with David (name changed) from Belfast who has recently been in court as his second mortgage lender was trying to repossess his house for non-payment. He also had a fairly hefty balance on his credit cards and isn’t paying them either. His house is on the market, he has reduced the price once already and is unwilling to reduce it again, although there has been no viewers since it went up for sale. The property market is extremely stagnant in N.Ireland and a house has to represent a significant ‘bargain’ to attract a buyer.

“I have been made redundant twice” said David “and both times it took me a while to find work again, which meant that we had to borrow to keep up with our living expenses. We have two sons in college and that is expensive, plus we have all the usual things like a mortgage, car payments and all the other bills a regular family have.”

The family took out a second mortgage a couple of years ago to consolidate the debts accrued from David’s first period of redundancy, and ironically it this lender which has been the least accommodating about their financial situation and recently took them to court.

David was clearly at the end of his tether during our conversation this week, “I just can’t see a way through this, I realise we willingly borrowed the money and feel morally bound to pay it back but we just can’t go on robbing Peter to pay Paul. We are getting demands for payment from all sides at present and I just don’t know which way to turn – every time I plug a hole in on part of the dam another bigger leak springs out somewhere else.”

Unfortunately for David I was unable to help him with his debts because his monthly expenditure considerably exceeds his income, and that is before he makes any payments to his unsecured creditors. He is (just about) maintaining an arrangement to repay his mortgage and reduce his arrears balance but as a consequence his credit card borrowings are increasing substantially each month, and he is failing to make his minimum payments on these.

My advice was that he should reduce the price on his house further and get it sold as soon as possible. It is my belief that his unsecured creditors will very soon default his credit cards, cutting off his ability to top up his income each month. Once that happens he will then start to miss his repayment schedule on his mortgage arrears and other priority debts, he will end up back in court and a possession order will be granted, and he and his family will be out on the street.

I felt really bad having to give this advice but unfortunately sometimes the people I speak to are too far down the debt path to save their homes from being sold. In this case it is better for the property to be sold under David’s control rather than being repossessed by the lender and sold at auction.

For David if he can get his house sold now and clear his debts with his equity then he can still afford to rent a home, and a huge millstone will be taken from around his neck. It might not seem like it at present, but hanging on to his house and getting himself into serious debt as a consequence is not working for David and is putting himself and his family under massive stress, more stress than they would experience from selling at a reduced price and moving into rented accommodation.

I wish you well David and my thoughts are with you and your family as you go through this difficult time.

Patrick

The Answer:

If you’d like to learn more about debt problems in Northern Ireland, visit Patrick’s site.

Other Related Articles to Read

• Kayte Has Drained Her Savings And Can’t Pay The Bills Anymore
• Teresa Writes In And Asks “What Should I Do Next?”
• Scott Writes Me and Asks For Help – “We Are Behind And Overwhelmed”
• David Writes In “I Have No More to Give”
• John is Worried His Debt Will Scare Away His Fiancee
• The Perfect Debt Assistance Program
• A 12-Step Plan to Get Out of Debt Fast!
• Crys Writes In And Asks “We’ve Been to Credit Counseling But Should We File For Bankruptcy?”
• Is Bankruptcy the Best Option for Us in the UK? – Hayley
• Debt Relief Law Center Attorney Takes Cash to Modify Mortgages and Gets Disbarred Instead

Read the full article at GetOutOfDebt.org, click here: Debt Problems Are The Same In Indiana As They Are In Ireland