How to Get Out of Debt With the Get Out of Debt Guy » secret

Robert Says “Please help. I never knew financial burdens can cause so much stress.”

Steve Rhode — Tue, 23 Feb 2010 21:33:29 +0000

“Dear Steve,

I have a $190,000 mortgage @ $1614. mo w/escrow. I am $66,000 in credit card debt @ $1520. per mo. Married with 4 children and over my head in bills it’s hard to put food on the table. My income is $5400 mo. I have $34,000 of credit card debt and my wife who does not work outside the home has $32,000 of her own credit card debt not in my name. At the end of the month our budget shows a -$400. when we add in the car payments/ins., utilities and food. 2 of my children are away at college using student loans to get the through.

My family is well respected in the community we live in, however no one not even our family knows how much trouble financially we are in. Much of this debt comes from building a house in 2001 and losing my tail on. Its hard for me to look at my daughters and tell them we cannot afford new school clothes, etc…

My wife and I were wondering if bankruptsy was the only way out or start paying off 1 credit card at a time and letting the others go, until it was time to pay the next and so on. We know that either way are credit is going to suffer real soon, becuase we keep digging the hole deeper and deeper each month.

Please help. I never knew financial burdens can cause so much stress.

Robert”

The Answer:

Dear Robert,

It is ironic that those like you that have more, feel much more pain in financial loss, yet society has the least amount of sympathy for you and your situation. We aspire to be successful and then those that are successful and fall we revel in their demise. It’s all very twisted.

I can empathize completely with what you are going through and I’m impressed that you have the foundation of a good plan already. Let’s step back for a moment and review your situation.

It appears that you have been successful to date but the maintenance of those outward signs of success have left you in a very difficult position where you’ve relied on borrowed money to maintain the facade.

It is now impacting your children, which hurts and pains you deeply. Those are natural and normal emotions and feelings. That pain, the pressure of juggling bills and the fear that the sham is going to be up soon is what is causing your stress and pressure.

The stress will subside once you can take an honest look at your situation, face the pain, and do what must be done. Trust me, there is no one absolute right answer here so the ultimate path that you select will really depend on your intestinal fortitude and your ability to be honest, internally, with the family, and outwardly.

Now if you’ve watched my story you will know that I went through the very same fears and pressures. I’ve walked in your shoes and what I am about to tell you is from the luxury of what I have learned from helping others and a lot of time passing.

The God’s honest truth here is that you have to decide what it is that you want to live for. Do you want to live a life of truth or continue to perpetrate a lie. The lie is the financial life that you have been leading.

If you decide that you want to abandon the lies and reduce your stress by living a life of truth, then you are going to pay a big price in a rotten credit report and bad credit score while we dig you out of this mess. It is just the price that you have to pay.

I’m going to give you three plans here for you to choose between.

Plan 1

Use the debt snowball approach and pay off your lowest balance cards first by abandoning payments to your other credit cards. The sooner you can use all your debt repayment dollars towards eliminating your debt the more money it will free up to use on the higher balance debts.
This approach will result in you falling behind on those other credit card bills while you execute this plan. You will go into collections but it will all be normal fear and threat stuff. Before things to too bad hopefully you would have cleared a couple of those lower balance debts and started to pay attention to the forgotten ones.
Falling behind will hurt your credit report and credit score.
If you abandon this path before you completely pay off creditors you will still owe all the remaining creditors.

Plan 2

Enroll in a debt management program or credit counseling program. It will also hurt your credit report and credit score and you may not get out of debt with the same speed as in plan 1 since all your creditors will be getting some payments each month and that payment plan will be based on the what is best for the credit counseling agency with your creditors and not what is best for you.
Expect this approach to take six to eight years if you complete it successfully.
If you abandon this path before you completely pay off creditors you will still owe all the remaining creditors.

Plan 3

If you don’t have much equity in your home you may decide to go bankrupt and stay in your home.
Bankruptcy is the most drastic action but it also may eliminate your debt for the least amount of money overall since bankruptcy will eliminate credit card interest rates and what you can afford to repay over about a three year period will be all you will pay.
The only way to find out if bankruptcy is for you would be for you to go and talk to a bankruptcy attorney for a free bankruptcy review. Talking to a bankruptcy attorney does not mean that you will file bankruptcy. Go and talk to the bankruptcy lawyer with the intention of educating yourself more about how bankruptcy may impact you.

But No Matter Which Approach You Select

I can not emphasize enough how much I feel you must come clean with your wife and your children about the realities of this situation. If you are going to stop living a lie you will have to trust truth to those who you love the most and are most impacted by this situation.

Once you lower that veil then you can live each day, digging your way out, in honesty, and hold you head up that you are authentic and doing the best you can do to resolve this most difficult problem.

Big Hug!

@GetOutOfDebtGuy

The Answer:

How the Washington Post Outed My Bankruptcy Secret

Steve Rhode — Tue, 29 Dec 2009 15:00:09 +0000

From How to Get Out of Debt

I am still amazed when I read ignorant stuff about the reason people are going bankrupt is because there is no more stigma about bankruptcy. No, the reason people are going bankrupt is because creditors are manipulating the system for their own accounting or reporting means and not allowing people to repay their debts with as much enthusiasm as the banks had when the person was borrowing the money.

People want to repay, creditors evidently don’t want the money back over time. Crazy, but true. Frankly, if I was an investor, especially an institutional investor in a major bank I’d ask to take a good look at their repayment policies for people that have fallen behind in their obligations. I think you’d be shocked by the hurdles lenders put in place. But I digress.

This is the story of one person, me, that went bankrupt and felt the stigma of bankruptcy. In 1989 I went bankrupt and in 1994 I founded the not-for-profit that started to help people find good solutions for bad financial problems. After living through the experience I thought there had to be a better way. But it wasn’t until 1999 that I went public with the fact that I myself had gone bankrupt. And it coming out with that story wasn’t by my own volition.

Up until that day in 1999 I had been able to successfully hide the fact that I had gone bankrupt. Only about four people in the world knew my secret. I had not shared it even with friends. You see, personal failure is not something that people want to broadcast. It is not a badge of honor. And certainly not a bumper sticker you’ll see. “Kiss me I’m Bankrupt.”

I kept my bankruptcy quiet for the same reason everyone else does and will, because it hurt and I thought was shameful. I’m sure that each person has their own reason why they want to withhold their bankruptcy secret. Bottom line, most would like for it to be a secret, forever.

Even today when I read all the stories that too many people go into debt management plans (DMP), debt settlement programs, or remortgage the house to pay off the debt, it makes me mad. The reason that people flock to these solutions is because they don’t want to go bankrupt. The reason that so many people turn to alternative solutions is simply because they don’t want to go bankrupt, they want to repay their debts.

Even today, while my bankruptcy has been a great life experience that I have been able to share to help countless others, if there had been another way to reach the same insight I would have preferred to have found another way. It’s kind of like becoming wiser for some reason by getting hit by a car. While the wisdom may help others, not getting hit by the car would have been nice as well.

I have not forgotten the moment my bankruptcy secret became public. I was doing an interview with The Washington Post for yet another consumer debt story and the reporter asked me in passing if I had ever been bankrupt. Crap. A wave of panic spread through me. I had never contemplated coming out of the bankruptcy closet and now I’m being asked by a reporter from one of the world’s leading newspapers. Crap, crap, crap. So I did what many people would do in that situation, I said, “No”.

The reporter left and I turned to my friend and PR Director and said, “Nancy, I just lied to the freaking Washington Post. I did go bankrupt in 1989.” Nancy listened while I shared my story with her and explained the shame and failure that I felt by being bankrupt. I then immediately went and talked to my wife Pam about this situation and while neither of us wanted to come forward with our personal failure, we felt that we had to be honest about the reality and that doing so might help someone else. We really did get dragged out of the closet kicking and screaming.

Latter Nancy called the reporter back and I came out and admitted my reversal on that bankruptcy question and then I sat down and wrote an email to my 35 staff members at the time and came out of the bankruptcy closet to them. The email took forever to write and there was nothing easy about coming out of the bankruptcy closet or sharing my personal failure with my staff, friends, world, clients and especially The Washington Post. All in all, a very uncomfortable experience.

Since that time my bankruptcy story has helped many I am told. A couple of years later, Pam and I made a video about our bankruptcy story to share with others. All of which has helped people.

So for those ignorant people that still insist that bankruptcy has lost its stigma, I say to you, “The hell it has.” But the lesson I did learn from the entire situation is that on a personal level, my life has been much better by not having secrets and sharing my experience and dealing with the issue of being bankrupt has provided emotional relief from the intense shame and failure I felt.

The tragedy today about bankruptcy is watching people avoiding it for fear of how they will feel about it only to live their lives in worse ways. Bankruptcy is certainly not an aspiration but like a lot of things in life sometimes the things that are best for you and not the most fun.

@GetOutOfDebtGuy

Secret Credit Bureaus You Don’t Know About, But They Know About You

Steve Rhode — Mon, 07 Dec 2009 15:06:40 +0000

From How to Get Out of Debt

So let me tell you a story about secret credit bureaus that you don’t know about. Most of us have some knowledge about the three major credit bureaus that hold our credit report and credit score. The three biggies are Equifax, Experian and Transunion. But there are more places that hold information about you. Have you ever heard about Innovis?

Innovis is just one example of a credit reporting agency that soars under the radar but can significantly impact your life. There are others so let’s talk about them. And by the way, if you read this posting once and then it’s gone, you’ll know I was contacted by lawyers to remove it.

Innovis
So let’s start with Innovis. Innovis Data Solutions really hit behind the scenes around 2001 when Freddie Mac and Fannie Mae, the mortgage financing folks, began requiring their partners to report mortgage performance to Innovis. That started the ball rolling.

It doesn’t matter so much what Innovis does but that there is a fourth credit bureau out there that holds information about you and doesn’t like to appear on the radar.

Innovis specializes in providing information to businesses. They reported maintain a list of who moves; where and when, and a list that creditors use to pre-screen credit offers. Show up as a bad egg on that list and you might not get access to the best credit card offers available today. (Which you can find online here.)

Innovis maintains a website with limited information on it. But they do have a page that tells you how to order your credit report from them by phone or mail.
ChexSystems
ChexSystems is one of those data repositories that we see the sign for from time to time but we never know how it impacts our life. Let me give you a personal example.

The Chex Systems, Inc network is comprised of member Financial Institutions that regularly contribute information on mishandled checking and savings accounts to a central location. ChexSystems^SM shares this information among member institutions to help them assess the risk of opening new accounts. ChexSystemsSM only shares information with the member institutions and does not decide on new account openings.

If you’ve been a bad boy and bounced a check then that information will go into a database and be used against you when you try to open an account at a new bank. Seems to make sense? But incorrect information in ChexSystems can also block you from opening a bank account.

You can get a copy of your ChexSystems file on you and you can request it by visiting ConsumerDebit.com. You can order one report for free each year.

You can see a sample ChexSystem report online.
National Consumer Telecom & Utilities Exchange
If you screw up on paying your phone bill, electric bill, gas or water bills, you may be reported to NCTUE.

It is just like a regular credit reporting company but for telecommunications and utilities and in this case the data is managed and housed by Equifax.
LexisNexis Banko
The Banko service from LexisNexis provides daily reporting on bankruptcy cases, deceased people, eviction information and judgment and tax lien information.

If you are involved in debt collection, fraud prevention or new account authorizations, a convenient solution has been designed to accurately track this information. BankoÂ® offers bankruptcy and deceased databases, which can be used to keep your portfolio of accounts complete and up-to-date.

Banko’s national bankruptcy database contains complete information on all bankruptcy filings, discharges, dismissals and conversions in the United States. Banko gathers complete bankruptcy information from all Federal Bankruptcy Districts on a daily basis. This information is then imported into one, easy-to-use bankruptcy database, saving you time and bankruptcy court on-line fees.

The Banko database has up-to-date information on all bankruptcy filings, discharges, dismissals and conversions nationwide. Each bankruptcy filed is tracked on a case-by-case basis in order to collect all filings, 341 dates, discharges, dismissals and conversions. Bankruptcy information is collected from all 50 states, plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands.

The Bank service is important to be aware of if you find public record or court information on your credit report that you don’t recognize. The erroneous information could have originated through this court reporting service.
ChoicePoint
ChoicePoint maintains and provides information to “advance the efforts of law enforcement, public safety, healthcare, child support enforcement, entitlement and other public agencies.” That’s always a comforting statement.

ChoicePoint provides data reporting in the following industries:

Automobiles – Screen out high risk customers and identify the person who is buying a car to avoid violation of the USA PATRIOT Act or OFAC (Office of Foreign Assets Control) regulations. By the way, if you want to read the names or groups or individuals that should not be allowed in the United States, click here.

Banking – Bank Secrecy Act (BSA) compliance. A number of banks have been caught in money laundering, BSA or non-compliance issues that lead to massive fines. These banks include Union bank of California, American Express, Bank of America, Beach Bank, Foster Bank, Israel Discount Bank, Western Union, Liberty Bank of New York, BankAtlantic, Oppenheimer, ABN AMRO Bank, Bank of New York, Arab Bank, Gulf Bank, JPMorgan Chase, Riggs Bank, AmSouth, and more. Read details here.

Commercial Banking – Electronic fingerprint transmission, professional license verification, identity authentication, courthouse searches, mortgage fraud search.

Corporate Security – Identity verification, PFAS, BSA, USA Patriot Act screening, watch list screening (24 lists and growing), media searches.

Gaming and Casinos – Identity services, money laundering avoidance.

Healthcare – Employment screening and identity protection services.

Insurance – Auto liability reporting, claims history, driver history, insurance scoring services.

Legal – Courthouse research, litigation support, employment screening

Mortgage – Fraud prevention, mortgage industry data exchange (MARI) through MIDEX a service that contains public disciplinary actions and sanctions data, mortgage fraud alert system (MFAS),

Multifamily – Resident screening and collection services for property owners including notifying property owners of new convictions of residents and identification of sex offenders.

Nonprofit – Watch for infiltration by identity theft, terrorism and money laundering, volunteer screening.

Retail – Drug testing, employment screening, vendor screening.

Retail Banking – DEBTOR Discovery, a tool used to find people and assets, find private telephone numbers, relatives and business associates of delinquent account holders.
MIB – Insurance Repository
MIB Group, once known as the Medical information Bureau, is a network of about 470 insurance companies in the US and Canada that share information about policyholders and applicants to prevent someone from leaving out critical information that might impact a new life insurance, health insurance, disability, critical illness or long-term care policy.

You can obtain a copy of your insurance report from MIB by following the instructions on their site here.

Consumers have long had a right to obtain information from MIB about the contents of their MIB “consumer file.” We call this “Disclosure” and we now provide one free report annually for those consumers using the “streamlined” process that was developed in response to FACTA (Fair and Accurate Credit Transactions Act).

In addition to one free copy of their MIB records annually, consumers also have the right to question the accuracy of the information in their MIB files and to seek correction of it in accordance with the procedures set forth in FCRA. When a consumer disputes the accuracy of any item in his or her file, we contact our member company that reported information (a “furnisher”) about the consumer and the member company conducts an investigation (sometimes referred to as a “reinvestigation”) to determine whether the disputed information was accurate and complete, as required by FCRA (Fair Credit Reporting Act). Of course, the goal of the investigation is to help ensure that consumer reports are accurate. Out of all the free Disclosures that we provide, we find that only one percent (1%) of these consumer files are amended as a result of a consumerâ€™s election to dispute its accuracy. We have even fewer cases in which a consumer elects to exercise his or her right to record a “statement of dispute” in his or her consumer file. Once filed, the statement of dispute will be provided to any MIB member that subsequently requests the consumerâ€™s MIB file.

The information contained in the MIB database is highly sensitive because it contains information of underwriting significance (medical and avocation information) about North American consumers who have applied for life and health insurance with MIB member companies.

MIB also offers a really cool service called the Policy Locater Service. For a fee they will search their massive database and see if you are eligible for life insurance benefits that you might know about from someone that died.

When I discovered this service I immediately emailed it to a friend of mine. My best friend died with his unsigned insurance application on his desk and left his wife with nothing. Maybe there was a policy out there we didn’t know about. It’s worth the fee to check.
First Advantage SafeRent
Yet another place data about you is kept is you have rented a property in an apartment complex.

First Advantage SafeRent is a consumer reporting agency that provides information to the multi-family housing industry and to employers. Housing providers may obtain your consumer report to assist them in making leasing and employment decisions. Employers may obtain your consumer report to assist them in making employment decisions.

SafeRent even produces your renter credit score, called RegistryScorex that is supposed to predict your ability and willingness to pay rent.

Instructions about how to obtain a copy of your SafeRent report can be found online here.
TeleCheck
If you’ve written checks you’re probably in the Telecheck database. Telecheck provides merchants with services to help them avoid getting stung with bad checks. However, the service also stings consumers.

Two examples come to mind. The first was someone who had a name similar to another person, the other person. Cindy went to write a check at her local market and it came back denied. TeleCheck had clearly made an error but blocked Cindy from writing checks until she spent time and money to fix the error.

The other person was me. Before CompUSA went out of business I would drop in to buy computer stuff. If I wrote more than two checks in three days it was flagged as suspicious activity and my check would be rejected.

Here is what someone else said about their TeleCheck experience.

“A few weeks ago my wife and I where in Walmart talking with friends. They where in the check out next to us. We gave the clerk our check. He put in the TeleCheck reader and he said your check not good. Our friends heard this and six people in line heard it.

The manager came over and it when down hill from there. We paid with a debit card and left.

Now, we have had accounts with the same bank for 15 years with not a problem of any kind. Our checking account carries a $10,000 balance on a regular bases.

We found that my wife’s drivers license number was tied to some account in a credit union that we never heard of because some in Telecheck hit the wrong numbers on someone who had some bad checks in that CU.

This embarrassment is indescribable. Now we will not use a check in any place that has TeleCheck for fear of the same thing happening again. This causes us a problem because we are to old to be carring large amount of cash with us. Also the friends I told you of are cold to us now.

We have a letter from Teleckeck saying evrything is all right now but not one word of apology.”

More information about TeleCheck contacts can be found here.

@GetOutOfDebtGuy

The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey.

Steve Rhode — Mon, 10 Aug 2009 11:14:44 +0000

From How to Get Out of Debt

I’m finally sitting back at my desk, at home, after my week long tour of the Northeast U.S., talking to people about the economy, money, credit, and debt. My travels took me from NC through VA, WV, PA, NY, VT, NH, MA, CT, MD.

I traveled through some of the hardest hit counties in the Mid-Atlantic from these difficult economic times and one message rung true in each corner of this part of the country.

If you go back and listen to my interviews I recorded during the trip you will hear one overwhelming message thread through the advice given by people from all different walks and stations of life.

The advice is so simple and if I had followed it when I lived through my money problems and bankruptcy it would have greatly helped me to recover from those difficult days. The secret, and the message is hope. Hope of brighter days and hope that things will improve is the secret that helped many to find the strength to make across the dark and desperate times.

Almost as if a sign from a higher power, as I was sitting in the passenger seat, headed down the highway on the final legs and contemplating what I had learned from this trip, the truck above passed me by with the message you see on it’s back window. The exact message of hope that many had shared with me, “Things are getting better…just hang in there.”

Now this magic and free hope is not a wish that your life as you know it will be unaffected by your money troubles. It is instead an acceptance of your current reality and then an enthusiastic embrace that while tomorrow may be difficult, the days that follow will be better and take you one step closer to a better life.

Everyone I talked to has lived through painful times in their life and yet their advice for you was that hope carried them through. Hope provides energy to make it through today and tomorrow and it positively encourages you to power yourself forward to the better times that will come.

The loudest second bit of advice to share was not to suffer in silence. That it is important to reach out to friends and family and to lean on them for emotional support. The time honored tradition of community provides a scaffolding to prop you up when you are struggling. This community isn’t going to bail you out or make the problems disappear. But a community can help you buoy hope and carry you over the tough times and to shore where you can gain your footing.

What was also encouraging was that the two most powerful emotional and supporting messages of hope and community and both tools that are totally free and available to you this very instant. You don’t need to buy anything to start applying hope to your situation right now.

But I will admit, it is enormously difficult to flip a switch from feeling hopeless to hopeful. Not everyone can do that in an instant. But if you can remember to hope it can become second nature.

Hope is the knowledge that while today might really suck, better days are ahead. With hope you can live through your darkest days with some excitement because you will know that as bad as today is, a day is coming for you when life will be the exact opposite.

Evoking hope does not have to be a complicated process. It is activated when you can look at your current situation and know that things will get better, you just need to hang in there.

So the message of hope is one that I will try to weave into my help and support that I give to people. And it is a message that I will try to fiercely hang on to the next time I face a hurdle in my life.

@GetOutOfDebtGuy

How to Get Out of Debt With the Get Out of Debt Guy » secret

Robert Says “Please help. I never knew financial burdens can cause so much stress.”

The Answer:

The Answer:

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