Show Effort in Repayment
If you have things in collections, try to check with the original lender. Sometimes, they'll allow you to make payments and apply them to your balance, even though this won't bring the debt out of collections. However, it will reflect on the amount in collections. If you do this, save any documentation, cashed checks, etc. and ask if they'll send you an updated bill. Also, write down the date, time, and name of the person you talked to for each debt record. That way, if it does come to court, you have documentation to show the judge that you're doing all that you can. This may sway things a bit more in your favor, since you are making a reasonable effort to pay the debt. Instead of a garnishment or bank-freeze, they may instead rule that you repay via a more reasonable payment plan.
Jess F. in Boston, MA
You Can Do This!
I know this is a scary time, but it can be done. My husband and I are working on what used to be $50,000 of debt. We started chopping away at it at two years ago. We are currently at $32,000. For us, listening to Dave Ramsey's talk show is what got us motivated. He has several books out and he's on hundreds of radio stations throughout the US. He teaches that you need to get fed up and so sick of debt that you basically scream, "That's it, I've had it, never again!" Once you get to the point where you refuse to buy one more thing on credit, you start to win.
Write everything down on paper and call it a budget. Don't use any of the money that comes in unless it is on that paper. You may rewrite the budget every month because every month may be different. By writing it down you're telling the money where to go. Think of it as a financial diet.
He talks about the "Debt Snowball." This is where you list your debts smallest to largest and pay the minimum on all but the smallest. The smallest you attack with a vengeance as if your life depended on it. When that one is paid off, go to the next and so on.
He talks about getting a second job like delivering pizzas, which my husband is doing. It's about sacrificing now, so you don't have to live the rest of your life in debt or as Dave Ramsey would say, "Living like no one else, so you can live like no one else." Dave is a multi-millionaire twice. He made his millions when he was in his twenties, lost it all, and made it again the second time living these principles. He is a man of high integrity and I have listened to him give out hundreds of free books, Financial Peace classes, and even books that weren't written by him to callers. Check him out. He'll also be able to tell you how to talk with your creditors and what may be the best course of action for you.
Lisa in Pittsburgh, PA
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