Tips to deal with creditors and financial troubles.
Paying bills can feel like THE most stressful thing on the planet, especially when you are caught between providing shelter and food for you and your family or paying that pesky bill collector who won’t quite calling. You might even be wondering “What part of ‘I don’t have any money did they not get?’” I wish none of us ever had to be pressured between paying bills and basic living needs, but it happens. If you are one of the many who are in this position, please know that you are not a bad person and don’t beat yourself up about it. You are human and while you need to take responsibility for your actions and learn from your mistakes, it doesn’t mean that you need to kill yourself emotionally to do it.
There is no question here that our health, family, shelter, food, and water come first. If there is anything left over, that it is to be spread out amongst the debt collectors and/or remaining bills as best as possible. Once that is done, dealing with the debt collectors is next.
While I don't specialize in financial advice, I have been through a foreclosure and financial troubles myself (before I ever learned to invest in real estate) due to a divorce. Here is some great resources and tips that helped me through tough time;
Learn that debt comes in two different forms - secured and unsecured. Educate yourself on the differences and the consequences if you can pay each one.
The best place I know of to do your research is http://www.fair-debt-collection.com/. There are laws to protect you from unruly creditors, debts do roll off your credit report in 7 years and there are statutes of limitations that say you don’t legally have to repay the debt after so many years. Researching State & Federal Statutes is key and should be weighed against your individual situation so you can decide if you can live with the possible consequences of your decision.
To get peace and quiet from the harassment during the “collection” phase, I sent everyone who calls you a “do not call” letter in accordance with the Fair Debt Collection Practices Act, [15 USC 1692c] Section 805(c): CEASING COMMUNICATION:. Again, you can find a draft of a “do not call” letter for debt collectors here
http://www.fair-debt-collection.com/Disputing_Collections/stop-calling-letter.html for FREE. They will still attempt to collect via letters, but it is much easier emotionally to deal with.
Know that you have options beyond what people like me are able to say to you. Look for those options, think outside the box. I used to give a lot more advice on this subject, but I had an SEO guy and a university told me I would get sued if I told you my truth the way that I was telling it. That alone should encourage you to investigate. Start at
http://www.fair-debt-collection.com/ first, it will enlighten you, and it's FREE.
Are you forced to quite paying your bills like I was? Here is was I discovered during my troubles;
If you stop paying, the bill collectors will start to call. For some of you, the bill collectors may have already started calling. Here is what you might expect for the future; the day that you stop making your payments on any kind of debt, a timer starts ticking. In all states, there is what is known as a statute of limitations for different kinds of debts. For example, in Wyoming if you write a back check (a dishonor of draft) and 3 years goes by without you paying it back, then state law (statute) says you don’t have to ever pay it back and no debt collector can make you pay after that time frame. To check your state’s statute of limitations to enforce a debt, do an Internet search as state statutes are listed publicly.
Most people wonder things like, can I go to jail if I don’t ever pay – I found the answer to be no. The majority of the time, the debt gets “charged off” on your credit report and then a bill collector will call you, pretty heavily at first, and threaten you with everything they can think of in order to scare you into paying. Don’t let them scare you, do some research and know your rights. Their collection attempts will lessen over time and mine gave up after a while. The only way that you could be forced to pay is through the court. If your lender wins a judgment in court, then they can garnish your wages or take your assets. I found that only a very small percentage of debt collectors do this, depending on the type of debt owed. You will get notice that you are being sued ahead of time and there is always that window of opportunity to stop the process by settling out of court (and yes, they settle for less than the amount owed).
Overall, any debt that you owe will roll off your credit report after 7 years of no payments or activity on the account according to the federal statute of limitations. Bankruptcies and foreclosures can stay on your credit report for 10 years. If you make one payment or say you will make a payment, it can reset the statute of limitations “clock” back to the beginning. Judgements are different and take longer to roll off.
I would like to sum it up by saying that every financial situation is different and every debt is different and therefore, my experiences may not fit what you may experience. There is a lot of help out there; however, I didn’t use financial planners, consolidators, or negotiators as I didn’t find them very helpful. You can decide that for yourself. I have to say that none of this is legal advice, if you need it, seek an attorney.
You will always be afraid of creditors until you understand your rights and how to deal with them. Do what you can and put the effort forth to get yourself past that fear, otherwise, it will always hold you back and plague you. I think you will find that there isn’t so much to be afraid of after all.