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So your in debt and want to get out....

Date: Tue, 04/03/2007 - 12:10

Submitted by LCW
on Tue, 04/03/2007 - 12:10

Posts: 1151 Credits: [Donate]

Total Replies: 7


I am re-posting here a response I made to another thread in the pub, but I think the topic is good, and there are many people in this community who could share their experiences and help those who are just beginning to deal honestly with their debt and don't know where to begin.

I could post this in any number of forums, but I think in order to get the most input on it, this if the best forum. I would like the community to elaborate on this thought. I invite others to also constructively share their expereiences ( both positive and negative) on the various options available to consumers in dealing with their debts.

Quote:
There is no quick and easy solution if you have substantial debt. Whether you decide to weather the storms and deal with creditors and their agents your self, or you go through a consolidator or counselor (who some of your creditors may refuse to deal with any way ), the fact of the matter is the solution is not easy, and it certainly won't happen overnight. But then most of us didn't just get in debt over night either.

Bankruptcy as an option? Sure, it's always an option, but (speaking from experience) it's no better or quicker a solution than anything else. Yes, it may stop the calls cold, but once it is dismissed, it will be used against you over and over. My bankruptcy will drop off my credit report in a few months, and to this day it is STILL used against me.

Are people that turn to BK losers? NO! a little uninformed maybe. Desperate or panicked? Definitely. If your are considering BK as an option, PLEASE be sure to research it thoroughly. Talk to those of us who have done it. DON'T listen to your lawyer when they tell you "it's no big deal, you'll get CC offers within a few months", yeah you get the offers, but when you fill out the application and send it back you also get denied (except for high interest, excessive fee "rebuild your credit" cards that use up your whole credit line to pay their fees that you then make payments on).


A little bit of individual responsibility and adequate knowledge about credit is the key factor. Everyone will agree that decisions are made focusing on the credit for the future. If it's started in the wrong way, it will end up going wrong. Research and knowledge about credit repair can save from losing direction. No decision is bad if it helps in clearing off the debts. debt consolidation, settlement or filing bankruptcy has its own consequences. One has to make the right choice what fits the best in their situation and wipe off the debts.


lrhall41

Submitted by mcranberra on Tue, 04/03/2007 - 15:13

( Posts: 524 | Credits: )


Filing for bankruptcy is sort of like having bariatric surgery. Unless a person's mind is made up to change their lifestyle, doing either one will only yield short term results.

If a person truly wants to have a healthy credit future after discharging (the minute you walk out of court), the last thing that should be on their mind are credit cards and rebuilding credit. The most important thing should be establishing a budget, living by that budget and saving money so that living paycheck to paycheck becomes a thing of the past. It is also a good time to evaluate employment, skill sets and seek educational opportunities that may improve marketability. I know it is easier said than done, but it is part of the lifestyle change.

High interest rates and high fees are the price one pays for bankruptcy. Credit can be re-established by buying a car, paying on time and if without penalty, more than the note. Pay it off, buy another one and the interest rate will be lower. A person that feels the need to have a credit card should make a smart choice when selecting "one" of these cards. I say one, because one is enough to prove responsibility during the 7 or 10 year bankruptcy period. Lifestyle change = living without "needing or wanting" credit cards.

I don't say the things above without understanding that life has its ups and downs. That even with the best intentions of saving and staying within a budget that a medical or family emergency won't come up and wipe you out again. The point I am trying to make, and I guess it can be said with any debt solution, is to learn to manage your money, learn to live without "wanting or needing" credit cards and don't focus on "why me" when things go bad. When things go bad, come back to this forum, visit a money management site, reflect, try to come up with a new plan that doesn't involve borrowing and implement it.

Advice from a person that has been there and done that... 8)


lrhall41

Submitted by atxmbb on Mon, 04/16/2007 - 08:03

( Posts: 15 | Credits: )


Good idea LCW! It took quite a while to get out of debt-still have LVNV hanging over my head-but am out other than that. The way I did it was a little different than some advise. I started with my lowest detb, and made changes and sacrificed to pay it off first. Then I took that payment and added it to my payment with the next lowest-and on and on. The reason I did it this way, as opposed to working on the ones with the highest interest was, I needed to see that I was making progress, and by paying off the little ones, and adding their payment to the next, it seemed I could see a light in my life. By the time I got to my larger debts, I had money from the other ones to add to their payment, plus,I made their payment larger. Did it take awhile-yep-but It took a while to get in this mess. Did I have to do without some of the things I wanted-yep-but I kept my eyes on the fact I could have them when I was out of debt. But I agree that unless you figure out what got you in this mess, you'll do it again. Trust me, I did!! So with old age comes some wisdom, and taking responsibility, and looking at my wants and needs to see what was more important. I agree,too, that sometimes bankruptcy is the only answer, and one should not feel like a failure for having to do that.I had alot of medical emergencies with my son, but I also realized I made alot of choices,financially, that really were for wants, not needs!!..Karen


lrhall41

Submitted by Bossy4455 on Mon, 04/16/2007 - 14:54

( Posts: 5854 | Credits: )


Quote:

The best way to get out of debt? Don't borrow money.

Go see Dave Ramsey on the net and find a station near you that his radio program airs on. Give him two weeks of serious listening and it will change your life.


Dave Ramsey does have that affect on people. I listen to Dave often (thank goodness for XM, because no stations in our area carry him), and have made many changes in how I do things.

Am I still in debt? Yeah, but I'M climbing out of it bit by bit every day. Soon we will be on top of it, and pushing that first debt snowball over the top of the hill. But most importantly I'm not taking on any new debts. My wife and I have been talking a lot about this over the past few months and we have firmly decided we will no longer take on new debt obligations with two future exceptions: (1)To buy a new house (we sold our house recently to reduce debt and free up cash flow for re-building savings and paying off debts) (2) to replace a car, and then only if absolutely necessary. The first choice will be pay cash, but I don't know if my beater that Dave would undoubtedly be proud of will make it much longer, and the repair bills would ultimately end up being a "stupid tax".


lrhall41

Submitted by LCW on Sat, 12/08/2007 - 12:04

( Posts: 1151 | Credits: )


I highly recommend Dave Ramsey too! We started Financial Peace University online when Dave offered it free to Veterans on veterans day and it has changed our lives. We are still in debt, but digging out. It didn't take us overnight to get into debt and its not going to be overnight getting out. happy to say we are now living below our means, paying off debt, and have a baby emergency fund in place!


lrhall41

Submitted by on Wed, 01/30/2008 - 08:02

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