As we all know, there isn’t a one size fits all debt solution. Every situation is different. However, the goal and destination is always the same. That goal is to lower your monthly obligations to an affordable level. One way to immediately lower your monthly obligations is Chapter 7 bankruptcy. However, if you are faced with the prospect of filing Chapter 13 bankruptcy, or if you want to avoid bankruptcy and you’re considering debt settlement, you don’t always have to settle all of your debts in order to solve your problem. If you can settle enough of them and create a comfortably affordable end result, by making payment plans on your remaining accounts, that may be the best solution.
Now, due to the way you may be conditioned by traditional debt settlement advertising, you may be raising your eyebrows a bit and questioning why. I’ll explain…
Back when I was in collections, I was the 1999 Collect America Collector of the Year. I was 23 years old. Please know, that I’m not trying to boast, but simply validate a point. They had approximately 30 offices at the time, and roughly 600 collectors. I believe there are two reasons why I collected more money than anyone else.
One was my perspective, I didn’t view myself as a bill collector, I saw myself as a problem solver. And, because of this, I made it my priority to learn as much as I could about every possible financial vehicle available to consumers.
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I learned the intricacies of mortgages, 401k’s, IRA’s, life insurance, and annuities. I learned the potential ways to access and structure them so they were pro-consumer. Such as borrowing from a 401k or IRA, rather than cashing out. I also focused on what options consumers had at the creditor level and I became aware of re-ages, hardship plans, and revolving to installment conversions. With all this knowledge, problem solving wasn’t just a perspective anymore. I could actually do it.
The second reason was my approach. It has never changed. It probably sounds odd at first, but my consumer interaction today, compared to back when I was in collections, is 100% the same. Please keep in my mind, I wasn’t the huffy-puffy type. I was charming, accommodating, and professional. I wanted their experience with me to be comparable to the service provided by 5 star hotels. My first objective was to make them feel comfortable and allow them the time to realize that this wasn’t going to be a typical collection call. I then made them aware of my goal, which wasn’t to just look at the debt I was collecting, but to try and figure out a solution to their entire financial problem.
That solution doesn’t always require you to settle all of your debt. Ideally, everyone wants to settle all of one’s debt, but if you lack the resources to do so, you should review what your resources will potentially do for you.
If you have the immediate ability to settle half of your debt, it doesn’t always make sense to subject yourself to the potential consequences of traditional debt settlement to settle the other half. Think about this, if you could immediately settle half of your debt and the end result is a comfortably affordable monthly budget, why continue to drag your credit through the mud, possibly subject yourself to lawsuits, and go through the stress, when you could just make payment plans on the remaining accounts?
So, when you’re considering your solution, remember, if you lack the resources to immediately settle all of your delinquent debt, you should review what your resources will potentially do for you. If you can settle X amount of your debt and comfortably afford payment plans on the rest, often times you will be better off in the long run.
See you next week for part 5 of this series.
Debt Relief A La Carte, Inc