The Secret to Becoming Debt Free

credit card debt

You’re in debt. Creditors are blowing up your phone and you dread checking the mail because you’re tired of seeing the red stamped “Past Due” letters. Most of us have been there. I know I have, but I quickly decided this was no way I wanted to live my life. I decided to take control, found my way into the financial industry and learned the secrets of debt collectors, Consumer Credit Counseling agencies, and debt settlement/debt negotiation companies. Over the course of two to three years, I dwindled down $20k and since then, I’ve been happily living debt free.

Here are 4 concepts to consider before enrolling in a third party debt program:

1. Consumer Credit Counseling takes a LONG time

If you go to a consultation with a CCCS, ask the counselor for your projected estimation of program completion. Depending on what creditors you owe and how much you owe each of them, it could easily take 5, 10, or 15 years. CCCS takes an estimation of how much you will pay the creditors monthly (often based on pre-arrangements made with these creditors) and collects this amount monthly and distributes the funds as agreed upon. The problem with this is that it does not always freeze interest on the accounts, allowing your balance to sky-rocket over time, as well as most payments being credited towards your interest and not your principle balance. If you must go the CCCS route, ensure that your payments will go towards your balance and that your interest rates will be frozen, or better still – reduced. Also, be aware that most of the CCCS programs require a monthly ‘donation’ or ‘processing fee’, which goes towards the CCCS company and not towards your debt. You could save yourself that money over the years in the program by working with your creditors on an individual basis and negotiating out a reasonable monthly payment, reduced interest, etc.  (see below for more information on this)

2. Many Debt Settlement/Debt Negotiation Companies Do NOT Have Your Best Interest in Mind 

It’s true. These companies are strictly about their profit, and I can say this because I worked for two different debt settlement companies. Sure, negotiation takes a degree of skill but it’s something most anyone could do with some guidance (see below for more information on this). Debt settlement companies help you reduce your debt, which is perfectly legal, but it does come at a cost that is often not made very clear to the debtors/clients. The first unforeseen cost, is that even though you are enrolled in a debt settlement program, it does NOT protect you against litigation, or being pursued legally by one of your creditors. Many of my clients were caught off guard, or failed to be made fully aware during the initiation of their contract despite it being in a small clause, and it broke my heart. You must understand when you enroll with these companies you still have a good chance of being sued for the debt you owe and it could ultimately force you to file bankruptcy. If you desire to avoid bankruptcy at all costs, then it is in your best interest to avoid a company that offers debt settlement that does not have an attorney working on their behalf that can represent you if you are sued. In addition, if you fall too far delinquent on a credit card (a requirement of debt settlement) with a creditor you also happen to have your checking and/or savings account through, don’t be surprised if that bank freezes your accounts for an indefinite amount of time. The bank has that right. Many of my clients were caught of guard by this — I do not believe this is something debt settlement companies disclose.

3. Debt Collectors Just Want to Collect

I was a debt collector (one of the top 10 in that company!), and here’s a commonly over-looked thought – debt collectors just want to collect.  To clarify, I’m not talking about a law office debt collection department, I’m referring to third party collectors. Stop avoiding them and start working with them (and there’s ways to do this, see below for more information). Find out what bill they are trying to collect on, the amount they claim is owed, and how long they plan to have this bill in their collection portfolio (the collector may or may not know this last part). Ask the collector if they are collecting as a third party and if the debt is still owned by the original creditor or if the collection agency has purchased the debt. This information makes a difference. If the agency owns the debt, you have a LOT more leverage to negotiate low, whereas if the company is collecting on contract for the original creditor, the collector is bound by guidelines that are not as flexible, such as reducing the balance significantly or agreeing to extended installment payments. Whatever you do agree upon with the collector though, make sure you get the agreement in writing prior to issuing out payment or providing ACH (Automatic Clearing House) information, even if they claim they will ‘post date’ the  withdrawal of funds. Paper trails are important.

4. You Can Reduce Your Debt & Remain in Control 

I understand it may be scary. Plenty of my clients were scared at the concept of even seeking out help for their debt, let alone trying to go it alone. After I learned the secrets and tricks of the trade, I devised plans, saved money at every possible opportunity, and negotiated firmly and repeatedly until I was able to get my agreement letters to the terms, issued payments accordingly, and received my zero balance (pay off) letter.

While my e-book does not give answers to every scenario, it should be enough to get you going. It’s much better to spend $5 and educate yourself than make a blind decision about the fate of your credit and finances. Buy it, share it, discuss it, and I hope you implement some of the suggestions so that you, too, can live a financially free life.

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About Crissa
Hi! I'm Crissa, a Capricorn with an Aries north node, an avid dreamer & dream analyzer. As an empath and lightworker, I believe that love conquers hate, and that your present actions dictate your future experiences. You CAN design your desired lifestyle, and I'm here to show you how. :)
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