I have helped a lot of clients get out of debt over the
years. No matter what the circumstances are some clients
succeed and others fail miserably. I have tried to put
together a rules list so to speak to help others before
they start down their debt elimination plan. Follow these
rules and you will have a great chance to get rid of your
debt. Throw these rules away and most likely you will end
up with the 75% of people who fail at getting out of debt!
First and foremost set up a budget before embarking on debt
elimination. Do not start a plan without knowing whether or
not you will be able to afford it. Sit down and plan out
housing expenses, auto expenses, food and any other
variables that may cost you money. Most people mistakenly
allocate the money to a debt elimination plan first and try
to plan the other expenses around it. Nothing is more
important than your families survival! When push comes to
shove and you have to decide between survival and debt
elimination, survival wins, so don't get into that position.
Secondly, you will not avoid your creditors like a plague.
You will actually call them to work out your plan. Your
creditors will not just disappear from the earth if you
ignore them. Out of sight out of mind philosophy doesn't
work here. You owe them money and they are going to come
after that money. Why not go to them and avoid the problems
of them coming after you. The best way to get a creditor to
attack you and your finances is to try and hide. I realize
that you are fearful of what may happen therefore the
natural tendency is to do nothing. You will feel like it is
better to do nothing than to do something wrong. In this
case communication is really the key. By telling your
creditor what is going on and that you are asking for their
help, they will realize you are trying to pay the debt.
Once they feel you are trying your best to repay them, they
will do anything to help to get their money back. Asking
for help usually brings out the best in people.
The next step goes hand in hand with the previous one. When
you say you are going to do something, DO IT! Your
integrity is all you have working for you at this stage of
the game. If you have made concessions with your creditor
and you fail to do your side, the creditor will not trust
you again. Think how many times the creditor has been lied
too, do you want to be associated with those people? The
reason we budgeted as the first step was to put you into a
position to be able to keep your word, not go back on it
just to temporarily appease them. If your income isn't
stable don't set up a repayment plan. If you are uncertain
of your being able to commit to a plan, don't. Communicate
these reasons to the creditor so you have a chance to work
something flexible out.
Finally, don't do a plan unless it takes less then five
years to complete. Depending on the amount of the debt
three years may be the maximum here. With chapter 13
bankruptcy you can take 5 years to pay back the debts. I
see no reason to go over the time allotment for the worst
case scenario. Any debt elimination plan should be planned
for three years so that you can see progress and it is not
a perilous process. Adhering to this rule means you need to
know how long any plan is going to take, so ask your
creditors for something in writing.
I hope this helps in organizing you to get out of debt. One
of the largest problems in the country is the current debt
load we are facing. The fastest way to financial
independence and great credit, is to first get out of debt.
My hope is that everyone gets out of debt and builds
financial freedom.
----------------------------------------------------
David Forer is a financial veteran of 15 years. To tap into
his knowledge about credit repair, debt management, and
budgeting go to his blog at
http://www.creditrepairdoneeasy.com and receive a free ten
page report.
No comments:
Post a Comment