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Image by l0ckergn0me via FlickrDebt — it’s a four letter word and one more foul than most.
Like many Americans, I’m in debt.
Not as deeply as I once was, but deeper than I want to be. Getting out is hard work! It takes grit and determination and self control as much as any diet ever needed. Our society has become one of instant gratification and that alone has fueled the crisis we find ourselves in today.
Where my parents scrimped and saved before they bought the new car or television, now we borrow, charge and make payments-same-as-cash. I know beyond a shadow of a doubt that I can and SHOULD have waited to buy fill-in-the-blank. But I didn’t. I charged it to my credit card and blithely went on my merry way.
When I found myself without a job and payments on credit cards far exceeding anything I could hope to pull in until I secured another, debt consolidation seemed to be an answer to a prayer. They would handle my creditors, get my payments and interest rate reduced and make it where I would have my debt paid off in two to five years instead of the nearly 30 it looked like it was going to take. Who would have ever thought how much debt consolidation hurt?
In my case, it hurt my credit, my ability to find a job and that hurt continues to this day even though my foray into debt consolidation was 8 years ago.
I thought that all those ads on the radio and t.v. meant the company was reputable, sound and truly in it to help people. Instead I found they were liars, cheats and crooks and are only just now being prosecuted for their crimes.
If you are tempted to seek out help from a debt consolidation company, be sure to take care in choosing one. While they are not all cheats, crooks and liars, there is profit in it for them and don’t be fooled into thinking there isn’t. You should check them out with the Better Business Bureau in both your state and the state they do business from.
But also, you should check out how to handle your debt responsibly. There are ways to make arrangements with your creditors to do the exact same things a debt consolidation company will attempt to do on your behalf. Just by taking the initiative and making those arrangements, you can save yourself quite a bit of grief.
Bankruptcy laws have changed drastically in the last five years, so it’s not as easy to file bankruptcy and where you once could file for it without an attorney, now you MUST have one to represent you. Even the Chapter 13 bankruptcy is more difficult to obtain as the qualifications for it are stiffer. You must also receive credit COUNSELING before you can file and this is NOT the same thing as the debt consolidation companies offer. Rather this counseling must come from an agency approved by the United States Trustee’s office. (For a list of approved agencies, go to the Trustee’s website at www.usdoj.gov/ust and click “Credit Counseling and Debtor Education.”) These agencies are allowed to charge a fee for their services, but they must provide counseling for free or at reduced rates if you cannot afford to pay.
Before you either seek out a debt consolidation firm or bankruptcy lawyer, it would be a good idea to go through counseling first.
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Tags: Bankruptcy, Better Business Bureau, Chapter 13 Title 11 United States Code, Credit card, Debt consolidation, Financial Services, United States, United States Trustee Program
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August 11th, 2008 at 2:57 am
Very good read! Need out of debt myself.
Hi there!
Got something for you on my blog if you want it.
http://onthebricks.blogspot.com/2008/08/someone-nice-to-award-me-once-again.html
August 11th, 2008 at 10:28 am
My wife and I have been working through dave ramsey’s course for the past month now, and we’ve paid off $12,000 worth of debt so far. granted, we have a bit to go, but the nice thing about Dave’s course is it helps make lifestyle changes that will keep you out of this situation again.
Payday lenders, Debt Consolidation, and the other “get out of debt quick” schemes tend to always do more harm than good….