How to Get Out of Debt With the Get Out of Debt Guy » debt management

Refunds Now Being Sent To Victims Of Express Consolidation Debt Management Services

Amanda Miller — Tue, 29 Nov 2011 18:52:17 +0000

Four years after the Federal Trade Commission (FTC) filed a case against Randall Leshlin and his debt management services company, Express Consolidation, the FTC is mailing out refund checks to almost 3,000 consumers across the country that fell victim to worthless debt management services.

The reimbursement stems from a February 2009 contempt finding against Florida attorney Randall L. Leshin, and his debt management services company, Express Consolidation, Inc. In its contempt ruling, the court found that the defendants violated a 2008 final order by continuing to do business in states where they were unqualified, and by collecting fees from consumers who had cancelled their debt management plans.

Consumers who were victims of the prohibited conduct will receive a total of $90,000 in refunds, with the average amount being $31.16.

The 2008 order resulted from a case the FTC filed in 2007 against Leshin and his company. The complaint alleged that the defendants misrepresented their non-profit status, charged hidden fees, and misled consumers about the benefits of enrolling in a debt management plan. Under the 2008 order, the defendants were prohibited from the illegal conduct and from operating in states where they were not qualified to do business.

The checks, which are being mailed by a redress administrator, are valid for 60 days from the date they are issued, and the FTC urges consumers to cash them. Consumers with questions should contact the FTC’s redress administrator, Rust Consulting, Inc. at 1-866-458-3187, or visit FTC.gov/refunds. The FTC never requires the payment of money up front, or the provision of additional information, before consumers cash redress checks issued to them – Source.

If you have been scammed and would like to file a scam report, please click here.

Only Making Minimum Payments And Can’t Get Out of Debt. – Debbie

Steve Rhode — Tue, 27 Jul 2010 16:01:32 +0000

From How to Get Out of Debt

“Dear Steve,

I owe $10,000 on four credit cards and can only make the minimum payment. I will never get these debts paid off. I am not behind but I’m having a hard time making them.

Debbie”

The Answer:

Dear Debbie,

If you can make at least the minimum payments then you might want to click here for debt management information. In a debt management plan your interest rates will be reduced and more of your payments will go towards the debt.

But I’m concerned with that approach. If you are not behind and struggling to make the minimum payments then it is doubtful that a debt management program will work for you since that while the interest rate will be lower, the monthly minimum payment will be about the same.

So let’s say you make payments for three years and then find yourself in a situation where you can’t keep making the payments. While your debt will be lower at that point, you’d probably have to look at bankruptcy as a solution. You will have just wasted three years of your life making payments that never solved the problem.

If that does not sound like a good outcome for you then you might want to consider bankruptcy now and if you feel compelled to repay your debts, you can do so after bankruptcy. There is no legal obligation to do so but nothing is stopping you either.

Before you decide what to do I would suggest that you contact a debt management company and a local bankruptcy attorney and see which of those solutions sounds like a better approach for you.

Please let me know what you decide to do.

Big Hug!

@GetOutOfDebtGuy

Keith Writes in And Wants To Know “Should I Consider Debt Consolidation For a Fee?”

Steve Rhode — Wed, 09 Jun 2010 17:49:22 +0000

From How to Get Out of Debt

Keith

“I have $30,000 in credit card debt plus $160,000 in home loans and business loans. Should I consider debt consolidation from a company that charges me a fee each month?”

Keith,

Excellent question and my answer may surprise you, Yes!

Nonprofit credit counseling programs brag that many of them are free or at a low cost, but that comes at a price, namely who they really represent. As long as the credit counseling program is getting paid by the creditor, there is no monthly charge to you who do they truly represent?

Let’s look at this a different way, if you were suing your credit card company and they offered you one of their free lawyers that they were paying for, do you think you’d get impartial representation, or would you want to use your own lawyer that you knew was working for you?

A debt management or debt consolidation company that charges a fee should not be avoided if you are comfortable working with them, they are providing you with excellent customer services, they are kind and treat you with respect.

At a time like this you don’t need to be a number in line at the free clinic, you need to get top-notch kind and compassionate assistance to help you through this. Fee charging debt management or debt consolidation programs should not be solely judged on if they charge a fee, but the quality of the service and representation they offer you.

Big Hug!

@GetOutOfDebtGuy

How to Shop for a Good Debt Management Program

Amanda Miller — Tue, 08 Jun 2010 13:52:34 +0000

From How to Get Out of Debt

You deserve to feel completely certain that you’ve picked the best organization to help you solve your financial issues. We’ve prepared this list of questions to help you find the right organization to represent you.

1. Will You Send Me Information About Your Organization and Programs?

A credit counseling organization should be willing to give you information about its programs and services. You should not have to provide any confidential information — such as your account numbers and balances – before they give you information about their services. Look for an organization that clearly displays and shares their program information, applications and agreements online and through the mail.

If the organization you are considering will not give you information up front about its programs, consider this to be a warning sign. Some organizations ask for this confidential information to help them determine if you have enough debt for them to be interested in helping you.

2. Is There a Minimum Amount of Debt I have to Have in Order to Work with You?

The answer should always be “no.” No organization should turn you away because you do not have a minimum amount of debt.

3. Will You Help Me with All My Debts?

Most credit counseling organizations work only with credit card accounts because lenders of secured loans – such as mortgages and auto loans – do not make automatic reductions in rates and terms. However, some counseling organizations will make payments on your secured debts as a matter of convenience. This service may be important to you if you want to write fewer checks each month.

4. Can You Still Help Me if I Cannot Afford the Minimum Payment in a Debt Management Program?

If you can’t pay the minimum payment, a good organization will still be able to help guide you to other resources. Steer clear of organizations that dismiss you or suggest that you file bankruptcy because you cannot meet their debt repayment requirements.

5. How High are the Fees?

Look for an organization that charges no or low fees. Some organizations charge high upfront fees — $250 or even your first month’s payment to your creditors — to participate in their debt repayment program. Ask for information about set up fees, monthly fees and other charges. Those fees should be clearly disclosed. And there should never be a fee to close your account.

6. What Kind of Security Measures Do You Have to Protect my Information?

When you work with an organization you disclose a lot of private information, such as your social security number, account numbers and account balances. It is important that the organization you select protects your confidential information.

Read the organization’s privacy policy. Make sure no outside party has access to any information you send without your permission.

Ask about 24-hour monitoring for fire, smoke, intrusion, water leakage and glass breakage. Be sure they shred all confidential information before disposing of it. Know that they use high technology solutions to protect your data against loss, such as redundant servers and storage media, secure encrypted Web servers, daily backups with off-site storage and security firewalls to control information access.

7. Can I Get Up-to-Date, Regular Reports of the Status of my Account?

You want easy access to your debt repayment account information at a credit counseling organization so that you can check on your account status at any time. If you can only get updates by telephone, find out if a knowledgeable person will be available at the time that you would normally call.

Look for secure, encrypted Web access to your account that gives you the latest information on your account 24 hours a day, seven days a week. You should be able to see when your payment was received, when it was sent to your creditors and the amount of the payment to each creditor.

8. Will you Sell my Name or Address to Outside Parties?

Make sure that if you work with a particular organization, that organization does not disclose your confidential information to inappropriate third parties. Ask the organization for its privacy policy and whether your name and address will appear on any mailing lists sold to outside organizations.

9. Does Counseling Affect my Report?

It might sound strange, but the correct answer is maybe. Credit counseling organizations do not report your participation in their programs, but many creditors do. That reporting could have an impact on your credit score and affect the interest rates you are charged on current and future debts. Counseling agencies should be willing to explain this potential impact on your credit report.

10. How Often do you Send Payments to Creditors?

Look for an organization that sends weekly disbursements to creditors. If an agency only disburses payments once or twice a month and you send your payment in late, then that amount will not be forwarded to your creditors until the next round of payments are sent. That could delay your payment for weeks. You need payments sent to your creditors at least weekly.

11. What are my Payment Options?

You need convenient options for your monthly payment. Choose an organization that gives you a variety of choices.

12. Does Your Organization have Accreditation?

Look for an organization that has received official accreditation from an independent, third party, such as BSI Management Systems. That certification means that the organization has gone through a rigorous review of its policies and procedures.

13. What Kind of Training do your Counselors have?

Good counseling organizations use internal and external training programs for their counselors. The external training should include accreditation from an independent certification program.

14. Are you Comfortable?

A typical debt consolidation program takes as long as five years. That’s why one of your most important criteria should be how comfortable you feel with the staff at the counseling agency. Look for people who are courteous, friendly and willing to give you as much time as you need to answer questions and explain the program.

I Really Screwed Up And Need Some Direction. – Chris

Steve Rhode — Mon, 17 May 2010 19:46:00 +0000

From How to Get Out of Debt

“Dear Steve,

Poor, Poor, Poor money management!! I need some direction on what to do. I am terrified of bankruptcy, and want to do anything to avoid it. I have read a number of things on your web site, which I truley appreciate, and you have talked about the failure rate of so many people who try debt management programs, but you never explain why so many people fail. I want to get out of debt, I want this massive monkey off my back, and I am just looking for some real advise that I can beleive in. Would love any kind of feedback.

Thanks,

Chris”

The Answer:

Dear Chris,

Debt management fails because the extended repayment plan is not based on what is reasonable, affordable or sustainable for you. It is based on what the creditors want, which is just about the same each month as you are paying now. But if you could make that payment, you’d do that now.

Creditors want to see your budget that the debt management company will create for you and creditors don’t like to see that you are saving money in an emergency fund instead of forking over everything you can each month.

Because the repayment plan does not include a savings component all it takes is one unexpected big expense to throw you off track.

The ultimate issue here is that I feel like you are trying to bargain for a solution that you want on an emotional level, and not a solution that is best suited to your situation.

What I hear you saying is that you don’t like bankruptcy, for whatever reason, but that you’ve also discounted it as a possible solution based on your biases about what bankruptcy means to you.

Making an appointment to go in and talk to a bankruptcy attorney is free, asking all your questions is free, learning if bankruptcy is an appropriate solution for you is free. The only thing you will walk out of that appointment with the bankruptcy attorney is knowing the facts and be better informed to make a decision that is best for you.

I’m not telling you or suggesting that you go and do anything you don’t want to do. I’m simply suggesting, urging, that you get the facts first before you start erasing possible solutions.

Big Hug!

@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

I’ve Got Eight Kids at Home and an Upside Down Mortgage. – Justin

Steve Rhode — Thu, 06 May 2010 18:38:39 +0000

From How to Get Out of Debt

Justin

“Dear Steve,

I have $56K in credit card debt between my wife and I. My debt is just over $22k and hers is just over $34k. I earn around $50k a yr and she only earns about $7k a yr. We have 8 kids living at home and an upside down mortgage that we owe about $200k on w/$1300 a mo payment. My CC debt equals about $1340 a mo.

Should I look into bankruptcy or debt management?

Justin”

The Answer:

Dear Justin,

Personally I think you should look into both bankruptcy and debt management. I think you should look into everything possible and then, and only then, make a decision about what path is right for you.

Getting out of debt is really 10% technical but 90% emotional. It makes no sense for me to force you into any solution that isn’t going to be both appropriate for you to achieve your goal or that you are not prepared to face.

Let’s take bankruptcy for example, I don’t want you to go bankrupt if you don’t feel it is an appropriate solution for you. And at the same time I don’t want you to discount bankruptcy for fear of how you think you will feel being a bankrupt.

My advice and guidance is always based first on my memories of living through horrible debt and bankruptcy and years and years of helping people in the same situation.

Just based on what you shared with me I am skeptical that debt management is going to be a realistic way out since you only win with debt management if you dig yourself all the way out of debt and that will take 5+ years to do. With eight kids at home the chances of having some unexpected expenses that will through your budget out of wack are pretty high. If that happens it could scuttle your debt management plan and you are essentially back to square one.

The key to your success is to understand how you got in this situation to begin with, and not repeat those actions again. Bankruptcy is a legal option for you and you should schedule a free bankruptcy consultation with a local bankruptcy attorney and go talk about what bankruptcy would mean for you.

What I am most worried about for you Justin is that with either a debt management or bankruptcy approach, your credit cards will be closed and not available to you. If those balances of yours have been used to help make ends meet, you won’t have that tool anymore and you will have to live within your income.

Keep me posted via Twitter at @GetOutOfDebtGuy on how things go for you or post updates in the comments section to this question.

Big Hug!

@GetOutOfDebtGuy

Jill Says, “I’m a Stay At Home Mom. We Are Starting To Sink.”

Steve Rhode — Tue, 04 May 2010 12:01:00 +0000

From How to Get Out of Debt

Jill wrote me through the GetOutofDebt.org site and asked for help. You can write me also and ask for help.

“We are in a load of debt. My husband makes $90,000 a year, I am a stay at home mom. We own our home, but there is not much equity so we can’t refinance. We owe $50,000 in credit card debt and we can barely make the minimum payments. We don’t know what to do. We feel like we are starting to sink. I know we did this to ourselves by living beyond our means, we want to fix it, but don’t know where the money will come from. We have not been late with the mortgage, but the credit card bills go sometimes 30 late, then we try to catch up, but is getting harder. Our credit rating has dropped significantly also.

Do you have any suggestions for us, should we look at debt settlement? My husband says bankruptcy is out of the question. What should we do? Help! Thanks!”

Hi Jill,

I know these are painful and stressful times. When life feels beyond your control, it is as if every day is a chore just to make it through. Add on top of that, responsibility for little ones, and you’ve got a real pressure cooker there.

Everything you’ve shared makes me worried for you. It’s one thing to get your financial life back to a break even point when you recognized that you’ve been living beyond your means but any lifestyle change to bring you back to a break even is not sufficient to really help.

In order to dig yourself out of this hole you’ll have to go further and do more. You’ll have to reduce your expenses so far back that you can easily have extra money each month to start paying down the debt. And once you get to that point, you’ll have to sustain that lifestyle for the next five to seven years.

I don’t know how realistic that is for you and your family. For many, it’s just not. And think about this, if you do this for the next four years and then decide that it is too difficult to continue and do something like go bankrupt at that time, you will have wasted the last four years of your life.

I would say the primary reason a plan like this is not sustainable is that people want to put every available extra dollar towards debt repayment and not save at the same time. You’ll have to also put cash in the bank at the same time to build up an emergency savings fund so a large unexpected expense does not wind up back on the plastic again and put you five steps backwards.

You’ve said that bankruptcy is out of the question but your situation is a bit like being overweight and saying that changes in diet and exercise are out of the question. Just because it is something that you don’t want to face does not change the fact that bankruptcy may be the best and most logical solution at hand to eliminate your debt quickly, protect your house and let you start over right now.

Approaches like debt settlement or a debt management plan are stop gap measures at best. Neither will eliminate your debt quickly and debt settlement will further tarnish you credit as the debt settlement company accumulates your monthly payments over time to then offer your creditors in an offer to settle.

If you had cash in your hands right now you could offer your creditors $32,500 on the debt as payment in full, you might be able to get settlements. But debt settlements are not free, all the money forgiven in the settlement is taxable by the IRS just as if you had earned that money. So if you settle the debt and get a big debt reduction, don’t forget to set aside cash to pay the extra tax you will owe at the end of the year.

A debt management plan might be worth considering but it is an all or nothing approach for the most part as well. A credit counseling group that offers debt management plans (DMP) may be able to get your interest slightly reduced and maybe a little reduction in your monthly payment. But unless your life is not full of surprises over the next four to six years while you reduce your lifestyle and repay your debt, that approach is probably not going to be successful either. A truth is that most credit counseling repayment plans end in failure with people never full repaying their debt through them

Here is the honest truth about what you’ve told me.

It is unlikely that you will be able to reduce your lifestyle and sustain that for a long enough period to get fully out of debt.
A debt management plan has the same issues. A debt settlement plan is going to further trash your credit and unless you’ve got the cash on hand to settle your debts right now, I don’t think you’ll be happy with the process.
Finally, even though your husband says that bankruptcy is “out of the question” I still think that the two of you should find a local bankruptcy attorney and got talk to them. You don’t have to go with the intention of filing bankruptcy but to better educate yourself about what bankruptcy really means to you. It would be a shame to eliminate bankruptcy as one of your legal and reasonable options just for fear of how you might feel about it.

But no matter which path you decide to pursue, I’ve made a lot of links available to you through this answer and I’m here for you if you need me.

Big Hug!

@GetOutOfDebtGuy

How Do I Handle the One Creditor Not in My Debt Consolidation Plan That is Suing Me? – Tony

Steve Rhode — Thu, 22 Apr 2010 23:20:24 +0000

From How to Get Out of Debt

Tony

“Dear Steve,

I currently have most of all my credit cards in a debt consolidation program except one. One of them cant go on the debt program because its in litigation How do I handle that ?

Tony”

The Answer:

Dear Tony,

I’m left wondering how effective this debt consolidation program is that you are in. If the goal was to resolve all of your debt, having one car left out because they are suing you seems like a slow simmer recipe for a hell of a mess.

Here is what I predict will happen. You will receive a court summons when you get sued over the one omitted debt. The court will rule in favor of the creditor that sued you because they have a contract that shows your promise to pay and what you agreed they could do to you if you didn’t pay.

The creditor will win, get a judgment and potentially garnish your wages. Once that happens your debt consolidation payments will become unaffordable and you will default on them. All the money you will have paid in the debt consolidation plan to date will be pissed away since it did not resolve the problem.

Talk to your debt consolidation company about this issue. If they are willing to guarantee you that my predication will not come true, stick with them. If they won’t and you are not prepared to face a slow downhill slide, go talk to a bankruptcy attorney and ask them for their professional thoughts about your situation.

A bankruptcy will stop the litigation and neutralize the other debts as well. I’m not anti-debt consolidation. I’m against solutions that will not resolve the primary problem.

Big Hug!

@GetOutOfDebtGuy

I’m Enrolled in a Credit Counseling Program And Thinking About Dropping Out and Paying Creditors Myself. – Wilder

Steve Rhode — Fri, 09 Apr 2010 16:56:20 +0000

From How to Get Out of Debt

Wilder

“Dear Steve,

I am enrolled in a debt management program( consolidation) for about 2 years and i am thinking to cancel my subscription and make those payments directly to the banks instead of through this consolidation agency.

I wonder if the interest will go back high if I drop out of this program? I called a couple of credit card customer services and they said the interest wont increase unless I don’t pay on time. But also other credit card companies said that it most likely will go high, and that i should contact my debt counselor. MY counselor (consolidation program) told me that YES, interest will go back high once he advised my creditors that I dropped out of the program . Is this true? I think i am able to make my payments directly to my creditors and i can save 49 bucks that i am paying for this consolidation service.

Wilder”

The Answer:

Dear Wilder,

This isn’t as clear cut as you hope it will be. The debt management or credit counseling group will tell you that your creditors will be notified and bad things will happen because they want to keep you in the program.

The reality is that as long as you are making the agreed upon monthly payment, most creditors will continue to honor the terms you have right now. But remember, working with or without an agency gives you about the same protections, none. Your current consolidation plan is not legally binding on the creditors and your creditors could change the rates at any time anyway. The credit counseling group has no power over that.

At this point, if you are getting value for the monthly fee you are paying, like good customer service from the debt management company, my gut reaction would be to not rock the boat if any of your creditors indicate that they will raise your interest rates back up.

Call all your creditors and ask them what their policy is and then decide what you want to do.

Big Hug!

@GetOutOfDebtGuy

Why Does Credit Counseling Drop Us When We Can’t Make The Payment. – Tracy

Steve Rhode — Wed, 07 Apr 2010 20:52:38 +0000

From How to Get Out of Debt

Tracy

“Dear Steve,

My husband and I are self employes and dont make a lot of money.he use to have a steady job before being laid off two yrs ago..we tried consolidating our debt and were kicked out of the program because we couldnt afford the monthly payments..now creditors are calling all day and I dont know what to say..we arent in a position to pay anyone right now..what is going to happen to us?

What do we do now and what actions can the credit card companies do to us?

Tracy”

The Answer:

Dear Tracy,

A credit counseling program will drop you when you can’t make the payment because you become a liability to them. When your monthly minimum payment is not enough to satisfy the creditor wishes then the credit counseling program has no further use for you.

When they say it’s not about the money, guess what, it’s about the money.

It is time for you to find a local bankruptcy attorney, pick up the phone and call to make an appointment for a free bankruptcy consultation. This is not going to get better without intervention or a sudden increase in income.

Bankruptcy will stop the calls and end collection attempts. It will close the door on this unmanageable debt for ever.

Sometimes the hardest thing to do is the right thing.

Big Hug!

@GetOutOfDebtGuy

Mary Had Her Motorcycle Repoed And Wants Your Advice

Steve Rhode — Fri, 29 Jan 2010 20:24:32 +0000

From How to Get Out of Debt

Mary wrote in and asked the following question.

“I had a motorcycle repossessed and sold at an auction. They want me to pay the entire loan and a debt collection agency has taken over. What are my options? What is the best thing to do?” – Mary

Mary,

I wish I had some amazing advice for you to make all of this go away. But I don’t.

When you took out the original loan the motorcycle was pledged as collateral to help guarantee the loan. But if you failed to make your motorcycle payments they could take the bike back and sell it at auction.

The amount they get at auction is subtracted from the remainder of the loan, plus repo fees, storage charges and miscellaneous B.S. charges.

The situation gets even more ridiculous, the amount of the loan written off by the lender becomes taxable to you, you’ll owe income tax on that amount, just as if you earned that money.

And while you would think the lender would be motivated to sell the bike for the maximum amount possible, they just unload them at auction and go after you for the balance.

You have a few options:

Enter a Debt Management Plan. Now that the lender has turned this into an unsecured debt you could have someone else negotiate with them to work out a repayment plan.
Talk to a Bankruptcy Attorney. You might decide that the motorcycle debt, on top of everything else you might have is just too much for you to be able to deal with. Bankruptcy is a legal option and one that you should investigate by talking to a local bankruptcy lawyer.
Do Nothing. Doing noting isn’t really a solution but it is an option.
Negotiate With the Lender. You could always try to work out a payment plan with the lender that you could afford. What concerns me about this is that typically a motorcycle payment is not that expensive so if you could not afford that, I bet you have other bills you are struggling with.
It would be a mistake to make a repayment promise that you are unlikely able to continue to make over the following years if you are just getting by as it is. In that case, talking to a bankruptcy lawyer is probably the smartest thing to do right now.

The worst part Mary is that you’ve lost your ride. Taking some trips on the bike right now might actually help to ease your worry and stress. Nothing like a good set of twisty roads to make you forget your worries and feel like you’re flying.

If you have a question you’d like to ask, send it to me here.

How You Can Get Out of Debt Fast Without Filing Bankruptcy

Steve Rhode — Fri, 08 Jan 2010 13:54:57 +0000

From How to Get Out of Debt

So there’s this guy, Scott, who has developed an ultimate guide to getting out of debt. Sure, I’m as skeptical as the next guy but after looking over the information I was left with a problem, it looked pretty good.

His information page actually contains a bunch of information that you don’t normally see which led me to believe that he at least knew what he was talking about.

Now the rest of the information Scott promises to share with you, take a look for yourself and see if you’re willing to get under the voer and see what you can learn.

Here is what he promises:

Here’s just a small taste of what you’ll learn in this powerful new course…

How you can ELIMINATE 90% of your unsecured debt without making another payment whatsoever!

How a simple one page letter can get you out of debt completely, improve your credit, or cut your monthly payments in half… INSTANTLY!

A brand new “stealthy secret” way you can actually file for bankruptcy and keep it out of your credit report… FOREVER!

Why 75% of all debt management, debt consolidation and credit counseling cases end up in bankruptcy anyway. And what you can do to reverse this trend.

The most important and toughest decision you must make when deciding on a debt relief option and how to make it intelligently and morally (so you’ll never have to second guess yourself later!)

Why all debts are not created equal. And which debts you should pay first and why.

How to clean up your credit report almost instantly! Learn how to rid your file of all past credit problems, including late payments, collections, and charge-offs — all while improving your credit score.

Top 10 reasons you shouldn’t pay off your credit card debt. These techniques may be considered controversial by some and therefore not recommended for everyone. But they could be just the thing you need to fix your situation.

The only legitimate way to have ALL your debts cleared while maintaining a good credit rating.

How and where you can obtain a low cost loan you can use for any purpose (like debt reduction) without any credit check or income verification at all.

How (if necessary) you can survive with BAD CREDIT! This simple secret shows you how to lessen the negative effect your current credit rating has on your life and immediately make it more acceptable to every lender you come into contact with.

How to get the government to pay your bills and debt for you.

The single most important thing you must do! then Wham!… your entire debt disappears almost instantly. (And you never have to worry about the debt anymore. Once you know this simple secret you will immediately take all the “money stress” out of your life once and for all.)

How to get out of debt years earlier than normal while saving thousands of dollars in interest all without increasing your monthly payments by one cent. Simple action plan provided.

Here’s several simple ways you can lower your monthly bills and save yourself a bunch of money — up to $700 or more each month.

How credit card companies think and work… a few simple secrets that will show you how to trick and confuse them so they leave you alone — and even forget about you forever! Result: Debt GONE, almost overnight.

A proven method for paying off any debt for as little as 5 cents on the dollar! This is a method virtually anyone can use. And you can use it over and over again… and never damage your credit doing it.

How to DEMAND that the credit bureaus re-establish your credit rating to the exact level it was before you considered bankruptcy or before you began missing payments.

Why Debt Consolidation is one of the worst options you can take and why its even considered worse than a straight bankruptcy when taking care of your debt!

So if you’ve got a minute, take a peek at the information Scott has and decide for yourself if you want to read more. It’s up to you but remember, often unconventional information contains facts not found from the mainstream sources.

I’ve Been on the Care One Debt Management Program For Two Years. I’m on Disability. – Laurel

Steve Rhode — Wed, 30 Dec 2009 20:10:10 +0000

From How to Get Out of Debt

Laurel

“Dear Steve,

I’ve been enrolled in Care One debt management program for over two years for 4 credit cards which all are over $1400.00 I am on Permanant disability and live in New York. I am getting to the point where I don’t know how long I can stick out this situation as its a toss up between food, shelter, gas and electric medications and docters and car fare. I am 57 yrs old and it’s causing me depression and a major hardship what can I do to I cannot work and my only income is Social Security.

Is there a solution or a forgiveness program for the balances? currently up to date on payments but don’t know for how long…

Laurel”

The Answer:

Dear Laurel,

You probably originally enrolled in the CareOne Credit Counseling program because you told them that you wanted to find a solution to your debt problem and get the creditors off your back. I can understand that.

But based on the facts that you’ve shared with me today, I can’t see how any debt management or credit counseling program would be a good solution for you. Don’t despair about all the payments you’ve made to date. They simply led you to this point. And of course, you never have to listen to my advice and you are free to do whatever you want to do.

Participating the the debt management program you are on now probably provides you with some relief from the fear you feel that you would experience from your creditors if you were not making payments. The fear of that situation has led you into a course of action that has no positive outcome for you.

It is highly unlikely that you are going to be able to successfully repay your debt in full through the CareOne debt management, or any debt management program. Why? The answer is not because you don’t have the will, but you don’t have the way.

Anytime you are juggling paying for appropriate food, your needed medications or utilities, it is a clear sign that more action must be taken to address the underlying debts. In your case that means that you should stop making any further payments into the debt management program.

The most alarming aspect of your situation is your depression. Depression is actually very common in people facing money troubles. But depression without adequate treatment is a serious issue. Depression and stress can kill you or at least have serious life implications. Depression also makes life feel hopeless and grey, but it can be easily treated.

I’m not sure if you are ready to face this head on or not but the best course of action for you to take is:

Discontinue additional unsustainable payments into the debt management program.
When collectors call looking for payment from you, you can explain your current financial situation and that you are living on benefits alone. If probably won’t stop much but you can try.
If that becomes intolerable, pursue legal debt elimination through bankruptcy. Meet with a local bankruptcy lawyer for free advice.

In similar situations in the past I was able to persuade creditors to write off some debts for people in impossible situations, but this is a different time. I think it is highly unlikely that any major creditor will do that. Especially when the credit card companies are scrambling for every dollar they can.

The bottom line here is that you are two years into a debt management program that does not appear to have a likely chance of successfully repaying your debt. You need to get your priorities reordered. Medications, food and utilities come first, anything left over is what is available for debt repayment. For help to uncover your available debt repayment dollars, download my free book, Eliminate Your Debt Like a Pro.

Don’t kick yourself, fix yourself. Step up, take action, file bankruptcy and put an end to these debts, forever. You’ve got a long life ahead of you, but just not like this.

Big Hug!

@GetOutOfDebtGuy

How Do I Get Out of Debt Without a Huge Credit Card Payment Every Month? – Allison

Steve Rhode — Sat, 26 Dec 2009 17:51:17 +0000

From How to Get Out of Debt

Allison

“Dear Steve,

I have too many bills and don’t make enough money. I have $12,000 dollars in credit card debt, if eliminated or reduced, I’d be able to afford to live. I am married with two children.

How do I get out of debt without a huge credit card payment every month?

Allison”

The Answer:

Dear Allison,

Bankruptcy. Click here for bankruptcy information.

So why did I so quickly suggest bankruptcy? Well with $12,000 of credit card debt your monthly payment is probably around $250 per month. If that payment is making it too hard to get by then any sort of debt management or credit counseling approach is not going to give you the breathing room you need.

Eliminate your debt with bankruptcy and then take the best care of your kids that you can.

Give those precious kids a big hug from me.

Steve

I Am 90 Days Late on Two Credit Cards. A Debt Management Plan Company Said They Could Not Help Me. – Jennifer

Steve Rhode — Sat, 26 Dec 2009 17:51:14 +0000

From How to Get Out of Debt

“Dear Steve,

I have two outstanding credit cards that have not been paid in over 90days. I tried to go through a debt management and found out that two of them they really could not do anything with. Now I am trying to make arrangements to just make payments on both cards but I am told they need a big lump sum to be able to do something. Now I am in jeopardy to lose my job.

Jennifer”

The Answer:

Dear Jennifer,

What you actually have going on here are three different problems.

Job concerns.
Overall debt problem.
Debt management issue.

I don’t know why the debt management or credit counseling companies you contacted said that they could not help with those two accounts. There are many potential reasons why. But regardless, I think they did you a favor by turning you away.

If you have a concern that you are going to be able to keep your job then entering any debt management plan might not be the wise move right now. For now, you’ve got to start saving money to help you if you become unemployed.

I appreciate the fact that you want to begin to repay your debt but can you really afford to do that? If you started repaying your creditors and then lost your job, what cash would you live on?

If this sounds like your situation I think you need to speak to a bankruptcy attorney and consider bankruptcy as a way to protect yourself from a financial tsunami after a job loss. Think of the free bankruptcy consultation visit as getting the life boat ready for the financial storm you fear is on the horizon.

Big Hug!

@GetOutOfDebtGuy

Diana Is Struggling to Make Credit Card Payments And Afraid

Steve Rhode — Wed, 16 Dec 2009 21:43:42 +0000

From How to Get Out of Debt

Diana

“Dear Steve,

I have approximately $25,000 in credit card debt, drained my savings and struggling to meet my payments. I can pay my mortgage and normal billing but not the cards

I am so confused about wha is available out there and frankly scared that I may not do the right thing with a repuable company. Can you help.

Diana”

The Answer:

Dear Diana,

It is normal to feel scared and afraid but I don’t want you to feel that way anymore. Consider yourself protected from this point on.

I wish you had found me before you started draining your savings account to get by and pay bills. I would have pulled you away from the checkbook, lovingly tossed cold water on you and said, “Diana dearest, what are you doing?”

Savings is there to be used in case of an emergency but not to continue living a life you can’t afford. Unless you can face the underlying issues that are leaving you financial abandoned, then dribbling cash from a savings account will only leave it bone dry and you, without further financial transportation. It is not a solution.

You should give yourself a real pat on the back that you reached a point and found the courage to reach out for help. That’s a huge step. And now that you’ve done that, you are absolutely right, who can you trust?

Now that you are tapped out there are really only a few logical options so let’s talk about them.

One of those options would be to explore entering a debt management program where you would make one monthly payment to the debt management company and they would divide it up amongst your creditors and pay them a new amount that might eliminate interest and fees.

But that’s not really a good solution for you at this point since you really don’t sound like you have the spare cash to be able to pay anything on a continual basis. I surely don’t want to see you enter a payment arrangement in a debt management program just because you are scared of your creditors. If you can’t make all the payments in the debt management program and eliminate your debt over five to seven years then you are throwing good money after bad.

You could immediately run and go bankrupt and discharge, get rid, of all your unsecured debt. Bankruptcy would eliminate the credit card debt but you could probably keep the house and car. I would suggest that if you consider bankruptcy as an option that you contact a bankruptcy attorney and ask for a free bankruptcy review to discuss your specific situation.

Another option, that will sound silly, but it’s not, is to do nothing at this time. You see the reason you have found yourself in this situation is either because your debt suddenly increased or your income dropped.

I suspect it is either a combination of those issues or primarily caused by a reduction in income. If that is truly the case then an option is to ignore the credit card bills that you can’t pay for right now and focus on trying to increase your income or get a second job. You might want to take a look at the America’s Job Bank page I created to help people find jobs.

This is a reasonable course to follow if you don’t want to go bankrupt right now, for your own reasons, and want to take a stab at repairing the situation. You’ll always have bankruptcy to fall back on in case a credit card company sues you or you just can’t increase your income to meet the financial demands.

If you do this the collection calls and letters will continue to come. Don’t let them rattle you, bankruptcy will be your fallback plan in case nothing else works out.

As far as being scared about working with a reputable company, that is less of an issue. Most every bankruptcy lawyer and debt management company does what they say they will do. Just watch out for a company that wants to sell you credit repair services as a solution or says if you pay them they will give you a debt consolidation loan.

While your situation feels dire, the reality is that it is a fairly common scenario that millions and millions of people are facing and suffering in silence with every single day.

If you need more help or advice, don’t hesitate to contact me.

Big Hug!

@GetOutOfDebtGuy

The Answer:

Bad Credit Debt Consolidation – Brutally Honest Advice

Steve Rhode — Wed, 09 Dec 2009 16:38:37 +0000

From How to Get Out of Debt

I could not help but notice the huge numbers of people searching for information for bad credit debt consolidation information. The phrase is almost an invitation for a bad outcome or maybe just an oxymoron.

When you have bad credit it is not an invitation for a debt consolidation loan from a debt consolidation firm. People that lend money are not hunting down people with bad credit to lend to. A bad credit debt consolidation loan just isn’t a real debt solution to eliminate credit card debt. It does not happen and those people with bad credit that think they are actually going to get a bad credit debt consolidation loan are just begging to be scammed. Honestly.

What people often confuse as a debt consolidation loan when they have bad credit, are credit & debt counseling services. Credit counseling or debt management is not a loan. Even though you make one payment each month to the credit counseling group, they are not lending you money. No government, no charity and no person in their right mind would or is going to lend money to anyone with bad credit who is looking for a debt consolidation loan.

Let me me as perfectly clear as I possibly can, if you have bad credit and a bad credit score and you are holding out hope looking for a debt consolidation loan as a debt solution you are not being realistic. It will not happen.

There are only three ways to do a fake debt consolidation in that situation:

Debt Settlement – Where your bills go way past due and you make one payment to a debt settlement company and eventually they will deal with your creditors and settle your debt for less.
Debt Management – Where, as I explained above, you send one payment, but it is not a loan. The credit counseling group chops up your single payment and sends it off to your individual creditors.
Chapter 13 Bankruptcy – This is the payment plan type of bankruptcy. You’ll make a monthly payment to the bankruptcy trustee and whatever you have not been able to pay by the end of your three to five year payment plan, will be wiped off.

Here is the easy way to people who are looking for those elusive bad credit debt consolidation loans. What you will be promised is that no matter what your credit score or how bad your credit, for a fee paid in advance, you will be eligible for a loan to payoff all your debt.

You will be asked to send a payment for the loan in advance as a processing or application fee. You may get papers to complete for your debt consolidation loan and you will be asked to send them in. But rest assured, you will not get the loan.

Source: Bad Credit Debt Consolidation – Brutally Honest Advice

Daisy Calls Again. Uncertain if Debt Settlement or Debt Management is Right for Her. – Get Out of Debt Podcast

Steve Rhode — Wed, 26 Aug 2009 13:40:22 +0000

From How to Get Out of Debt

Here is the latest Get Out of Debt show podcast.

Do You Have a Question You Want to Ask?

If you have a credit or debt question you’d like to ask call 919-321-2378. Leave your first name and question and I’m happy to help you totally for free.

@GetOutOfDebtGuy

Caller Question

Daisy called the other day and was concerned about getting a refund from Allegro Law now that they have been taken over by the state of Alabama. She wants to know how she can pick a good debt settlement or debt management program to work with next.

I had previously suggested that if people wanted to stick with a debt management program they could call Tinamarie and get VIP care to switch to another provider.

Listen to the Answer

Listen to my answer for Daisy.

Most Debt Advice Suggested is Snake Oil or the Wrong Solution For People In Trouble. Here’s Why.

Steve Rhode — Sun, 05 Apr 2009 23:26:25 +0000

From How to Get Out of Debt

I’ve been following the conversations on Twitter (@GetOutOfDebtGuy) and watching what others are saying about debt management, credit counseling, debt settlement and bankruptcy and it really has me worried and concerned.

I’m a guy that lived through financial problems myself and went bankrupt in 1990. I then went on to found and run a non-profit credit counseling company, Debt Counselors of America and Myvesta, for twelve years. I’ve served on the board of a Consumer Credit Counseling (CCCS) office, been to the restricted meetings of National Foundation for Credit Counseling (NFCC), I’ve met a lot of the creditor representatives and toured the inside of credit card operations. I’ve been on the inside so I am confident that I know what I’m talking about when it comes to consumer debt.

But here is where I really struggle with the concept that credit counseling, debt settlement, or bankruptcy is a better solution to the problems of someone in debt. No one solution can be the right tool each and every time.

Debt management can’t be the universal fix for all money troubles, but experience and logic tells me that neither can any other solution. The promoters of debt solutions, some of which are nothing but opportunistic hucksters, keep trying to sell their debt relief snake oil as if it is a magic wand. It isn’t and it can’t be.

I was once heavily inside the credit counseling industry and yet even then it was my belief that not one solution is the best path for all to follow. That belief eventually lead to the closure of Myvesta the non-profit organization in the United States, the termination of a lot of great people whom I loved and respected and the loss of a pretty substantial relationship. And yet I made more money running that group than I probably ever will in my life again and yet my beliefs wound up causing me to cut my own throat and close it down. You see, I just could not, in good conscience, bend to the creditor pressure that everyone needs to go into a debt management plan (DMP) as the best approach.

So when I see non-profit companies today, pushing the magic of debt management, or newly formed organizations selling debt settlement as the single fix solution to all debt woes, it makes me angry. Angry, because if the consumer, the individual in debt, is the center of caring and compassionate advice, a one-size fits all solution is not the right answer. You first need to listen to the goals the debtor and their wants or needs they to achieve and then present a solution that achieves that need.

Credit counseling groups suggest debt management far too often and inappropriately because that is how they make money. The public does not understand that for credit counseling or debt management groups that service is the product. There are sales quotas, bonuses, and sales training that is given to sell consumers debt management services. Unsuspecting debtors are put in debt management, debt settlement, or bankruptcy programs every day simply to extract money from the consumer, not because it is the right solution for the person in trouble.

Lord knows that I have made my share of mistakes in life, but one mistake I am proud to say that I have always avoided was to suggest or recommend any solution to anyone that came to me as a sale or if it was not the right solution for the individual. Having walked in those uncomfortable shoes of debt, I try, each and every day to remember how that felt and to treat each and every debtor as my brother or sister in debt.

On my GetOutOfDebt.org site I answer questions from people in debt, every day. And in order to help the anonymous person find a direction to look for assistance I might suggest one of the tools (debt management, debt settlement, bankruptcy) to investigate to address their situation. I also typically suggest that the person investigate more than one option and then decide which solution would best fit their needs. I am not wed to any one solution in my advice.

And if someone clicks on an advertisement on the site or fills out a request form, that might generate some revenue for the site*, but that is absolutely not what drives me to help people for free. I’m just as happy if someone does not click on a link or fill out a form as long as they get advice which helps to clear the fog of confusion and doubt and guides them in a direction that allows them to find a reasonable solution to their debt problems that best meets their situation.

The solution that debtors need can’t be defined by a single product but by a single philosophy. That is the philosophy of caring, compassion and guiding the debtor to the right specialist to deliver care.

If I am an ophthalmologist and I’m manning the emergency room, not every patient that comes through those doors is going to need eye care, but they are in need of some care. It would be my job to triage the patient and get the appropriate specialist, maybe a neurologist, to see and care for that person. The exact same thing is what is needed in the debt world.

I look at my GetOutOfDebt.org site as a financial emergency room. I read questions from debtors around the world and triage the situation and guide people to the right specialized care using my life experience and knowledge.

I’m afraid that those that simply promote and sell a single solution for debts problems are not doing that. Instead what they end up doing is turning people away that don’t fit the money making model of the promoter or put people into solutions that are not going to succeed only to line their own pockets.

Trust me, I don’t want to be sad or cynical about this. I would love for the world of debt relief to be different and in the perfect world that I envision, every person in trouble could go to any debt assistance provider and find the best solution rather than the solution du jour.

It is not a perfect world.

Steve

* And by the way, I use the revenue from the site to help support people in need and I donate all of my time, for free, to answering questions. My belief is that if you do good things in life, good things will happen. I’m not a saint, just some that really cares, that’s why I give away so many hugs at the end of my answers.

I Suggest Bankruptcy Too Often, So Say Some

Steve Rhode — Wed, 01 Apr 2009 17:11:54 +0000

From How to Get Out of Debt

I really do read all the comments, all the Twitter messages you send me and appreciate the feedback. Over time a common statement I get is about my recommendations is that people think I suggest bankruptcy too often.

For more information on this topic, please see The Truth About The Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy.

So Let’s Talk About Bankruptcy

I just saw an email from “Anonymous” that said:

BK seem to the standard answer you give everyone. You must be a BK lawyer. I don’t agree with all the answers you give–my only defense is maybe you’re a BK lawyer.

I am not a bankruptcy lawyer and having lived through bankruptcy myself in 1990 I don’t ask people to consider bankruptcy as an option, lightly. Bankruptcy can be a difficult process, both financially and emotionally. But my increasing recommendations to consider bankruptcy as a logical solution is not based on my love of bankruptcy, but the direct result of ineffective legal solutions other than bankruptcy to allow people to repay their debt in a fair, reasonable, responsible and sustainable way.

America excels at a lot of things and I am proud to be an American but I am also truly disgusted with the options given debtors in the United States.

Unlike in other countries where a binding repayment plan can be created that creditors must honor and the debtor can afford to meet, outside of bankruptcy in the U.S. no such tool exists.

All other options available in the United States, such as debt management, credit counseling, debt settlement, etc. are all voluntary efforts that creditors may or may not participate in. You could make payments for years in a credit counseling program only to have creditor change the terms, sell you account to another creditor, or whatever the creditor wants to do. These approaches are not a legally binding plans and creditors can change their minds, rates and terms before the total debt is repaid.

If other solutions existed in America, like they do in say the United Kingdom, such as the Individual Voluntary Arrangement (IVA) where a repayment plan can be forced on all creditors when at least 75% by value, agree, I’d suggest that more often.

For years in the U.S. I attempted to do the same thing like the IVA. My team and I worked hard to put together a comprehensive bankruptcy alternative repayment plan based on what the consumer could realistically afford, not what the creditor wanted. These plans had the best chance of a successful outcome instead of bankruptcy, but without the power of law behind them, like in the UK, all it took was one creditor to change their mind or terms and the whole plan was scuttled.

Creditors are selfish beasts. They are not concerned about what works best for the consumer in trouble, they only care about getting the biggest slice of the pie, available or not. As it stands now in the U.S. a voluntary only approach means that we are trusting that creditors will act collectively in the mutual best interest of the debtor and other creditors as a whole. Years of experience have taught me that creditors won’t do that voluntarily and even if they do, an economic change or regime change at the bank will end the program. Just look at what creditors are doing right now to their customer by lowering limits and jacking up interest rates. Whose best interest is that for?

So even I have noticed that I have been suggesting bankruptcy at a faster pace. But that is also a byproduct of uncertain economic times. In a down economy I hate to see people launch into a period of forced poverty just to enter a credit counseling repayment plan that is too expensive for them, only to not be able to make five years worth of payments and watch the plan fail and creditors come charging again. If the debtor is in a situation that is marginally sustainable or emotionally destructive, I will suggest that they look at bankruptcy and I won’t feel guilty about it at all, and neither should you.

It is an age old question but is it better to make three years of payments and fail in a credit counseling plan or go bankrupt now and spend three years rebuilding your life. If the debt management plan fails in three years and you wind up going bankrupt, has that three years been wasted? Is it better to force someone to remain in a financial situation that is amplifying their depression, bad relationship, and/or emotional downfall or to help them find a better way to move forward?

You have to ask yourself if debtors need to be punished more than helped. Some will say that bankruptcy is an easy way out and the debtor should be FORCED to repay their debt no matter how many decades it takes, like in Ireland. Others may feel that the debtor deserves a more reasonable solution to get out of debt, like in the UK or maybe bankruptcy in the U.S.

There have been plenty of times when people have said to me that they did not want to go bankrupt and so I suggested that they go try a debt management program knowing that they might not be able to sustain it. But in those times I recognized their denial, they needed to prove that it would not work to themselves, and it would not take long to fail and then they went bankrupt anyway.

If people do decide to go bankrupt, I never want them to look back latter and say they had other options and then feel bad about their bankruptcy choice. I want them to be able to investigate bankruptcy and in those situations, know that it was the most appropriate choice for them, available in the United States, at the time they were suffering.

Steve

Do You Recommend Credit Counseling or is There a Better Way? – Danny

Steve Rhode — Fri, 23 Jan 2009 15:13:59 +0000

From How to Get Out of Debt

“Dear Steve,

My wife and I have accumulated 40,600 in credit card debt. We are way over our heads, however, we have been able to make ALL of the payments on time. We are just barely making it though. We make over 118,000 a year together.

Do you recommend credit counseling or is there a better way?

Danny”

The Answer:

Dear Danny,

I know it is probably little comfort but your situation is not all that uncommon. Loads of people are making good money and just making it paycheck-to-paycheck, month-to-month. Digging yourself out from that hole, from the brink, is the hardest thing to do. If you jumped off the cliff and filed bankruptcy your debt would vanish much faster but there you are, able to pay at least the minimums, struggling along, and probably not an appropriate candidate for bankruptcy.

So let’s look at credit counseling for a moment. Credit counseling, or debt management, is an imperfect solution but better than the alternatives, nothing. In the United States a credit counseling repayment plan is determined by what the creditors demand from the credit counseling agency. In other countries the monthly payment is determined by what the consumer can realistically afford. I know, it sounds backwards in the U.S. and that’s because it is.

Also in America, the credit counseling groups get paid by the creditors based on the amount of money they collect from the consumers. This creates a huge conflict of interest. After all, whose best interests is the credit counseling agency supposed to represent?

But all that being said, you can’t escape the fact that going into a credit counseling program can lower your interest rates being charged by the credit card companies. It also stops fees and penalties that you might be getting charged as well. If you were behind in your payments then participating in a credit counseling program could lower you payment back down to the regular minimum. So while I do complain about the conflict of interest issue there are still some attractive benefits worth investigating.

The final concern is that entering a credit counseling program can also impact your credit score but then again your score is probably getting hammered because your debt to income ratio is already crazy and you are maxed out.

Bottom line, you should investigate a debt management program and see if it is right for you. Once you get all the facts, then you can make an informed decision. My favorite kind.

You can click here for debt management information if you’d like.

The hardest step to take to get out of debt is the first one, but don’t worry, I’m here for you if you need more help.

Steve

I Need Some Advice and Referrals For Bankruptcy and a Debt Financial Counselor. – Georgina

Steve Rhode — Thu, 22 Jan 2009 20:22:56 +0000

From How to Get Out of Debt

Georgina

“Dear Steve,

I owe a total of about 130k in cc & student loan debt. Student loans account for 70k. not sure how to start repay or bankrupy. I’m just 2 years back in workforce now. I make 50k yr with room for increase near future. Help, overwhelmed

I need some referrals for debt finanical counselors and or bnkruptcy and advice on what to do.

Georgina”

The Answer:

Dear Georginia,

Well you’ve come to the right place for recommendations on what to do. Let’s start at the top then.

Your student loan debt is large but on that you should contact your student loan lender and see what consolidation opportunities might exist. If it is a government backed loan there are options available through the Department of Education or whoever is servicing your loan for you.

Here are two quick links for you for referrals.

Click here for debt management information.
Click here for bankruptcy information.

Based only on what you’ve shared with me it would be impossible for me to make a life decision for you. But what you should do is use the links above to contact the different groups and ask for an evaluation of your situation. Armed with information from the debt management folks and the bankruptcy people you will then be in a better situation to make an educated and informed decision about which path is right for you.

Just bear in mind that student loans are typically not dischargeable in bankruptcy.

After you explore those links above and have your free consultations, come back if you have any additional questions and I’ll be happy to help you further.

Big Hug!

@GetOutOfDebtGuy

Do We Have Any Viable Alternatives Other Than Bankruptcy? – Paul

Steve Rhode — Tue, 20 Jan 2009 19:02:33 +0000

From How to Get Out of Debt

“Dear Steve,

I have piled up over $60k of credit card debt over the past couple of years. My gross income has been in the $55k range for the past two years. I am in a business where my income should continue to grow but with minimums around $1300 per month I’m very close to falling behind on these and/or my mortgage.

Do we have any viable alternatives other than bankruptcy?

Paul”

The Answer:

Dear Paul,

The most logical step would be to see if you can work out a modification of your mortgage to reduce the payment. You can do this by contacting your lender and seeing what they can offer you. Same thing with your credit cards, contact those banks as well.

Now once you have done that, don’t be surprised if they tell you there isn’t anything they can do. They offer little help to anyone that is current on their payments. They don’t want to offer relief at that stage and reductions and adjustments are typically reserved for people who are behind on their bills. I know, it sound illogical, that’s because it is.

If you get frustrated with that process or you want to get into a consolidated repayment plan that might reduce your credit card balances, then click here for debt management information. A debt management or credit counseling plan is not a perfect solution but it is a good first step to try before leaping for bankruptcy in your situation.

Big Hug!

@GetOutOfDebtGuy

April Wants To Know “As A Single Mom, How Do I Get Out Of Debt?”

Steve Rhode — Thu, 13 Nov 2008 17:40:56 +0000

From How to Get Out of Debt

“Dear Steve,

Mounting credit card debt is getting difficult to pay. I’m thinking of just ONLY taking care of house, car, utilities, food, insurance. I’m a single mother of two kids and get no child support. I’ve worked so hard for good credit and I am losing it.

What do I do? Not pay and wait for it to wipe off credit? File for bankruptcy before it’s too late?

April”

The Answer:

Dear April,

First, let me extend to you my biggest hug and deepest feelings of hope to help you through this difficult passage in your life. The pain and pressure you are living with right now, today, must be intense and make it difficult for you to be the strong mother that you want to be.

Good credit is an elusive target. You only really have good credit when your financial life conforms to what your creditors are most looking for. Your credit score is in fact a calculated score to allow creditors to identify who is most likely to be the lowest risk and highest profit maker for the creditor. Good credit and a good credit score has nothing to do with what is right for you and your kids at this time.

If there was a life score, I’m sure you would excel at it as a concerned mother that is trying to do what is best for you and your kids.

Having bad credit does have consequences, but then too does not being able to feed your hungry children, maintain insurance or being able to live in a safe environment. Ultimately, which is more important?

As I get older I realize that for me, the credit report and credit score are of lesser importance to me. What is most important in my life has to do more with trying to do the right thing, caring for my family and helping others.

In your situation you have wisely prioritized your financial obligations and you have found that after paying those items there is little left over to pay the credit card companies what they demand.

As much as you may not like the possibility, it might just be that you can no longer afford to repay the credit cards. In that case you have several options: You could stop paying the credit cards and let the collectors start calling; enter a debt management program and see if you can afford to pay a reduced payment to get out of debt; or consider bankruptcy.

Doing nothing is a stalling tactic and not a solution so that’s not really a good approach.

A debt management program might be able to craft a monthly payment for you but that payment will be based on what your creditors want and not based on what you can afford. Additionally, if you are living that close to the financial edge then I think you need to make sure you are able to put money each month into a savings account to protect your and your children in case of a financial surprise. Being in a credit counseling or debt management plan may not give you any room to save money each month.

That leaves us with bankruptcy. Bankruptcy is a legal solution you can use but before you make up your mind that bankruptcy is right for you I urge you to schedule a free bankruptcy review with a bankruptcy attorney and discuss your specific situation.

April, promise me this, that while the financial current situation is regrettable, promise me that you won’t loose sight of the fact that those small and loving faces that look up at you at night need you to be their protector and to care for them in a safe and healthy way. Do what is right for them, even if it is hard for you to face.

I’ll always be here for you.

Big Hug!

@GetOutOfDebtGuy

The Answer:

Bogus and Scam Credit Counseling Groups Become Target Of Florida Legal System

Steve Rhode — Tue, 21 Oct 2008 04:39:01 +0000

From How to Get Out of Debt

TALLAHASSEE, FL – Attorney General Bill McCollum today unveiled his office’s latest consumer protection initiative in the form of a coordinated enforcement effort targeting potentially improper tactics in Florida’s debt relief industry. In a statewide initiative, the Attorney General’s Economic Crimes Division has taken legal action against five companies and opened formal investigations into the practices of an additional five companies, all of which were purportedly offering debt relief services including credit counseling, credit repair, debt management, and credit card rate reduction services.

“As more Floridians facing financial difficulties are turning to debt relief organizations for help, an increasing number of these companies are taking advantage of the nationwide financial situation and defrauding consumers,” said Attorney General McCollum. “Our efforts will send a message to this industry that preying on consumers in financial distress will not be tolerated.”

The statewide initiative was launched in response to the growing number of consumer complaints regarding the debt relief industry. To date this year, the Attorney General’s office has received more than 1,400 debt relief-related complaints, which represents a 62-percent increase from the previous year. Complaints allege that certain companies promise services and savings that they don’t provide, refuse to make refunds, and often leave the consumer worse off financially than they were when they signed on.

Consumer advocacy groups recommend that consumers with mounting debts try first to resolve their financial problems themselves, before seeking the assistance of a debt relief organization.

“Many times a collection agency will settle for a lower payment, and even eliminate late fees and penalties if a consumer tries to negotiate their debt. This may leave a blemish on a consumer’s credit report, but it’s one of several ways to stop the downward spiral into deep debt,” said Brad Ashwell, a consumer advocate for the Florida Public Interest Research Group. “However, fraudulent practices can devastate consumers already suffering from debt and I commend the Attorney General’s aggressive actions against these harmful practices.”

The following legal actions were announced today:

Lawsuit filed against IXE Accelerated Financial Services

The Attorney General’s Economic Crimes Division filed a lawsuit against an Orlando-based company accused of making misleading promises regarding credit card rate reduction services. IXE Accelerated Financial Services (IXE) allegedly offered credit card rate reduction and credit counseling services to consumers primarily through telephone solicitations and collected fees from consumers, but never provided the services.

Lawsuit filed against Enterprise Technology Group, Inc.

A second lawsuit was filed against Dunedin-based Enterprise Technology Group, Inc., doing business as Ameritrust Financial Card. The lawsuit states Ameritrust charged enrollment fees for a credit card that the company promised would operate like a normal credit card while improving the consumers’ credit score through Ameritrust’s monthly reporting. In reality, Ameritrust’s cards were usable only on Ameritrust’s online catalog and the company allegedly never reported consumers’ accounts to any credit bureau.

Pending litigation against two Jacksonville companies

The Economic Crimes Division is also currently in litigation against two Jacksonville-based companies. United Debt Solutions, Inc., allegedly offers to assist consumers in negotiating settlements and paying off debts, but fails to do so and makes unauthorized withdrawals from consumers’ bank accounts. The Attorney General’s Office has also obtained a default judgment against the corporate defendants from Provident Financial Services, Inc., also known as Future Financial Direct, Inc. Provident was allegedly failing to negotiate, reduce, and consolidate consumer’s debt as promised. Litigation is ongoing against the company’s principal owners, Curtis Wood and Ryan Boyd. The default judgment was reached in July.

Settlement reached with New Leaf Associates, LLC

The Attorney General’s Office reached a settlement with multiple defendants named in a Pinellas County lawsuit that involved a “debt elimination” scheme operating under the name of New Leaf Associates, LLC. New Leaf victimized thousands of consumers nationwide by promising consumers there was a secret “legal administrative process” to completely eliminate debt and improve credit scores in the process. The Attorney General obtained an injunction to stop the operation of the scheme, but has been litigating to obtain a return of the funds to the consumers. The settlements with 16 defendants prohibit the defendants from participating in or marketing any similar scheme and require payments of costs and fees and restitution for Florida victims amounting to approximately $320,000 and additional settlement negotiations are ongoing with other defendants.

Subpoenas served

Subpoenas have been served against other debt relief organizations including Financial Freedom Resources, Inc., of Clearwater; Specialized Funding, of Largo; United Debt Solutions, ADA Tampa Bay, also known as American Debt Arbitration, of Tampa; Nodelay Enterprises, Inc., also known as Nodelay Account Services, of Orlando; and Equity First Financial Corp., of Casselberry.

Companies examined in conjunction with this initiative are suspected of violating Florida’s Deceptive and Unfair Trade Practices Act along with other laws regulating telephone solicitations, telemarketing, credit counseling organizations, and credit service organizations. While the exact practices of each company vary, most of them allegedly charge consumers illegal up-front fees, fail to provide consumers with written contracts and refunds as required by law, and regularly misrepresent the nature and benefits of their services. There are a total of 31 debt relief organizations currently under review for potentially misleading or deceptive practices.

How to Get Out of Debt With the Get Out of Debt Guy » debt management

Refunds Now Being Sent To Victims Of Express Consolidation Debt Management Services

Other Related Articles to Read

Only Making Minimum Payments And Can’t Get Out of Debt. – Debbie

The Answer:

Other Related Articles to Read

Keith Writes in And Wants To Know “Should I Consider Debt Consolidation For a Fee?”

Other Related Articles to Read

How to Shop for a Good Debt Management Program

1. Will You Send Me Information About Your Organization and Programs?

2. Is There a Minimum Amount of Debt I have to Have in Order to Work with You?

3. Will You Help Me with All My Debts?

4. Can You Still Help Me if I Cannot Afford the Minimum Payment in a Debt Management Program?

5. How High are the Fees?

6. What Kind of Security Measures Do You Have to Protect my Information?

7. Can I Get Up-to-Date, Regular Reports of the Status of my Account?

8. Will you Sell my Name or Address to Outside Parties?

9. Does Counseling Affect my Report?

10. How Often do you Send Payments to Creditors?

11. What are my Payment Options?

12. Does Your Organization have Accreditation?

13. What Kind of Training do your Counselors have?

14. Are you Comfortable?

Other Related Articles to Read

I Really Screwed Up And Need Some Direction. – Chris

The Answer:

Other Related Articles to Read

I’ve Got Eight Kids at Home and an Upside Down Mortgage. – Justin

The Answer:

Other Related Articles to Read

Jill Says, “I’m a Stay At Home Mom. We Are Starting To Sink.”

Other Related Articles to Read

How Do I Handle the One Creditor Not in My Debt Consolidation Plan That is Suing Me? – Tony

The Answer:

Other Related Articles to Read

I’m Enrolled in a Credit Counseling Program And Thinking About Dropping Out and Paying Creditors Myself. – Wilder

The Answer:

Other Related Articles to Read

Why Does Credit Counseling Drop Us When We Can’t Make The Payment. – Tracy

The Answer:

Other Related Articles to Read

Mary Had Her Motorcycle Repoed And Wants Your Advice

Other Related Articles to Read

How You Can Get Out of Debt Fast Without Filing Bankruptcy

Other Related Articles to Read

I’ve Been on the Care One Debt Management Program For Two Years. I’m on Disability. – Laurel

The Answer:

Other Related Articles to Read

How Do I Get Out of Debt Without a Huge Credit Card Payment Every Month? – Allison

The Answer:

Other Related Articles to Read

I Am 90 Days Late on Two Credit Cards. A Debt Management Plan Company Said They Could Not Help Me. – Jennifer

The Answer:

Other Related Articles to Read

Diana Is Struggling to Make Credit Card Payments And Afraid

The Answer:

The Answer:

Other Related Articles to Read

Bad Credit Debt Consolidation – Brutally Honest Advice

Other Related Articles to Read

Daisy Calls Again. Uncertain if Debt Settlement or Debt Management is Right for Her. – Get Out of Debt Podcast

Other Related Articles to Read

Most Debt Advice Suggested is Snake Oil or the Wrong Solution For People In Trouble. Here’s Why.

Other Related Articles to Read

I Suggest Bankruptcy Too Often, So Say Some

Other Related Articles to Read

Do You Recommend Credit Counseling or is There a Better Way? – Danny

The Answer:

Other Related Articles to Read

I Need Some Advice and Referrals For Bankruptcy and a Debt Financial Counselor. – Georgina

The Answer:

Other Related Articles to Read

Do We Have Any Viable Alternatives Other Than Bankruptcy? – Paul

The Answer:

Other Related Articles to Read

April Wants To Know “As A Single Mom, How Do I Get Out Of Debt?”

The Answer:

The Answer:

Other Related Articles to Read

Bogus and Scam Credit Counseling Groups Become Target Of Florida Legal System