Key points
- If debt troubles have pushed you to the edeege of sanity,
STOP... and take a deep breath. It may seem like the end of the world,
but we can assure you that it's not.
- It's in everyone's best interest -- both yours and the
people to whom you owe money -- to get you out of crisis mode and into
a repayment plan that you can handle. Nobody wins if you spiral
down to bankruptcy.
- The laws are actually on your side, although you'll have to get organized to take advantage of them.
- A good credit counseling service can turn your life
around, but please choose carefully. For some reason debt problems draw
a lot scam artists.
Are you being hounded by debt collectors or intimidated by lenders?
If so, we have some good news and some bad news. The good news is that
you are well protected by federal laws; the bad news is that it will
take a disciplined effort on your part to take advantage of these laws.
So, before we get into specifics, here are three general strategies that will help anyone battling a debt problem.
- Start a record of every conversation you have, from here on out,
with lenders, credit bureaus, bill collectors, etc., by phone or in
person. We provide some space in the workbook for you to do this. Be
aggressive on the phone. Get names and write them down, along with
dates and key discussion topics, including any agreements reached or
promises made.
- Save all related mail, including postmarked envelopes. When
it's your turn to send something important, go to the post office and
ask for a registered or certified letter and request a receipt that
proves it was received.
- Be courteous and diplomatic, but make it clear to everyone
involved that you know your rights, are keeping careful records, and
won't be intimidated.
Yippee! Sounds like fun, eh? OK, we know these tasks are a drag. But
if you can force yourself to do them, you'll be armed with the facts
for each new round of battle against your creditors, and you'll gain a
comforting sense of control over the whole process.
Now for some specifics...
Start at the Source
Always start by contacting the businesses to which you owe money.
Yes, we realize that this is about as much fun as giving a speech in
your underwear, but it's generally to your advantage. When push comes
to shove, most businesses would rather not bring in a costly bill
collector. Faced with this option, most would rather work out a
repayment plan that you can handle.
Know Your Rights
- By law, debt collectors cannot contact you before 8 a.m. or after 9
p.m., and cannot otherwise harass you, your family or friends, or tell
lies.
- If a debt collector threatens you with jail time, it's guaranteed to be a lie. Debtors are never jailed in this country, and nobody can even garnish your wages without a legal proceeding.
- You can prevent workplace calls or visits from a debt collector by requesting that you not be bothered there. Put it in writing!
- Since debt collectors can be sued for failing to follow these
(and other) rules, you can sometimes turn the intimidation tables on
them by mentioning that you are familiar with the law.
- For more help in dealing with troublesome debt collectors, contact the Federal Trade Commission at 1-877-FTC-HELP, or online at http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm
Choose Your Friends Carefully
A good credit counseling organization can make all the difference.
These offer everything from expert advice and a sympathetic ear to
hands-on budgeting help. Many will even step in -- between you and
those you owe -- to negotiate repayment plans that you can handle.
Many of these counseling services are non-profit organizations that
offer services free of charge or for just a small fee to those who can
afford it. A good place to start is the National Foundation for Credit
Counseling (NFCC), a national network of Neighborhood Financial Care
Centers (NFCC). Call them at 800-388-2227 to find out if there is a
center in your area.
Unfortunately, for every such worthy organization, there are dozens
of rip-off artists preying on vulnerable debtors. Anyone who promises
to "quickly wipe your record clean" for a small fee, or similar magic
tricks, is probably a thief. Be especially wary of pressure sales
tactics. Most reputable counselors will wait for you to come to them.
Summary
Take advantage of the law and credit counseling to get back on firm
ground.These actions won't erase your debts. Chances are
you'll owe just as much money. But at least you'll be in a position
where you can think clearly and start laying the foundation for putting
debt behind you forever.
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